Investing Style Quiz | Thrivent Mutual Funds (2024)

FAQs

What should my 401k investment style be? ›

Investors who have decades to save should take more risk early on and gradually dial it down as retirement approaches. As a rule of thumb, you can subtract your age from 110 or 100 to find the percentage of your portfolio that should be invested in equities; the rest should be in bonds.

Investment style is the method and philosophy followed by an investor or money manager in selecting investments for a portfolio. Investment style is based on several factors and typically tends to be based on parameters such as risk preference, growth vs. value orientation, and/or market cap.

The concept of the "safest investment" can vary depending on individual perspectives and economic contexts, but generally, cash and government bonds, particularly U.S. Treasury securities, are often considered among the safest investment options available. This is because there is minimal risk of loss.

The common rule of asset allocation by age is that you should hold a percentage of stocks that is equal to 100 minus your age. So if you're 40, you should hold 60% of your portfolio in stocks. Since life expectancy is growing, changing that rule to 110 minus your age or 120 minus your age may be more appropriate.

Many financial advisors recommend a 60/40 asset allocation between stocks and fixed income to take advantage of growth while keeping up your defenses.

Mutual fund style boxes provide a representation, typically in a 3x3 grid format, for quickly gauging the fundamental characteristics of a mutual fund's investment strategy. The style box categorizes funds based on market capitalization (large-cap, midcap, small-cap) and investment style (value, blend, growth).

A core holding is just what it sounds like: It's the central part of your portfolio. The core requires investments that will be reliable year in and year out. They're the solid foundation for the rest of a portfolio. To reach your investment goals, your portfolio needs a solid, reliable core. The rest is often frills.

The major investment styles can be broken down into three dimensions: active vs. passive management, growth vs. value investing, and small cap vs. large cap companies.

Diversify. This is perhaps the only way to counter your mutual fund loss at the moment. If your portfolio is exposed only to equity, then add some liquid funds to the mix. They will not only balance out your losses due to equity but will also allow you to raise money for short term goals.

What is 70 30 investment style? ›

This investment strategy seeks total return through exposure to a diversified portfolio of primarily equity, and to a lesser extent, fixed income asset classes with a target allocation of 70% equities and 30% fixed income.

Liquid funds are also among the safest categories in the mutual fund parlance. These funds can only invest in debt and money market securities with maturities of up to 90 days. This reduces the interest rate risk and credit risk that these funds can take.

If you need a lot of money for retirement or want to live an opulent lifestyle, you should invest more aggressively. If your needs are lower, you can afford to be less aggressive. Ability to save. If you have a strong ability to save money, then you can afford to take less risk and still meet your financial goals.

Now, most financial advisors recommend that you have between five and six times your annual income in a 401(k) account or other retirement savings account by age 50. With continued growth over the rest of your working career, this amount should generally let you have enough in savings to retire comfortably by age 65.