Today is a very monumental episode of the One Minute Retirement Tip - Episode 200! I can’t believe it’s already been 200 episodes, but that’s what happens when you do these daily. My goal with these tips is to bring my ideas and experience with helping clients navigate to a successful retirement to each one of you. Thank you to all of you who are listening today and here with me for this milestone episode.

Some of you have also emailed me and left me reviews, and your feedback let’s me know that these tips are helping you on your own path to retirement, which fuels me in continuing to crank out these daily tips!

So before I jump in to today’s tip, I have a request: Would you take a minute to leave an honest review for the One Minute Retirement Tip in Amazon? Amazon uses reviews as social proof that this flash briefing is useful, so it’s the best way for you to spread the word if you’re getting any value from these tips on retirement. Thanks in advance if you leave a review. I do a little happy dance every time I read a new review.

Ok, so yesterday, I talked about when you may want to customize your 401k investment lineup. Today, I want to go a little deeper in helping you think about how to go about doing that, because many people make one, huge mistake when customizing their investment lineup…

You chase performance. You get that one page printout of all the investment offerings in your plan, look at the performance numbers, then pick the best performing fund of the lot.

Bad idea. If you’re going to customize your investment lineup, you can’t pick the funds of the best performing of the bunch - that will lead you far off track.

The place to start is deciding on your ideal mix of stocks and bonds. Let’s say that you want to be 60% in the stock market and 40% in bonds. Great. Once you’ve built the foundation, now we can start working on the siding, and putting the roof on. That’s where we start filling in other categories - like large cap stocks, international, small cap, etc.

When you are trying to pick the best funds for you, performance is that last place you’ll want to screen for when picking the right fund. Start with your asset allocation and then fill in the funds that fit those asset classes from there, only looking at performance when you’re comparing two like-kind funds.

If what I just said is Greek to you, that’s a clear sign that you should probably just stick with the target date funds if those are offered in your plan. And that’s ok. That’s what I talked about in Tuesday’s episode, and that’s why target-date funds are usually the better choice unless you have a strong desire to customize your own investment strategy.

That’s it for today. Thanks for listening!

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, 401k, 401k plan, Roth 401k, 401k investing, 401k investment strategy, smart 401k investing