The best advice I can offer is to learn as much as possible as possible about the financial markets. I know that's not the answer you are looking for immediately, but you'll be much better served over the long haul.
Diversification, on the surface, is a great concept. But you can be diversified if you own large capitalzation growth stocks and small cap value stocks. But if both are out of favor in the market, what good is diversification? And you're diversified if you own stocks and commodities. But, over the last five years, the losses in commodities probably lost you more than you made in the stock markets.
A successful investor over the long term knows his/her goals and the products or market segments that will help them meet those goals. Knowledge will also protect your funds from those that want them more than they want you to become an accomplished investor.
That's my advice for the long term. And long term is the best outlook for investing.
23 years old and you have a 401(k)? SWEET future millionarie.....my advice is to allocate all of your money 50/50 to small cap growth and small cap value stocks.
Seriously....the only diversification you need is equity exposure, and at 23, you have 40+ years of growth ahead of you. Don't even think of timing the market right now, just dollar cost average in each month, and load up.
Why 50/50 small cap growth/value? Because theses are the most aggressive (typically) allocations in your 401(k) plan, and if you have 40 years to grow, then you have time on your side. Let it work for you:
$10,000/year for 40 yr at 12% annual returns (not out of the question with this allocation) is over $8 million dollars at age 63. The only question is are you disciplined enough to stay the course?
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