Your employer’s 403(b) plan will most likely offer you a variety of investment choices. Asking the right questions will help you decide on your best investment strategy.

Have I learned all that I can about each investment? For mutual funds and the investment options within a variable annuity, good sources of information are the prospectus, financial magazines, or your plan administrator. For annuities, rating services such as Moody’s, A.M. Best and Standard & Poor’s can provide the information you will need to assess the insurance company’s financial health.

How has this investment performed in the past? While past performance is never a guarantee of future performance, it will help to give you an idea of how the different types of investments have performed over time in up and down markets.

How long do I have before I’ll need the money? If you can leave money in a 403(b) fund for 10 to 15 years or more, you may be able to ride out the ups and downs usually experienced with stock investments. Over time, stocks (as reflected in stock market indices) have generally outperformed other options.

How should I "mix and match" my investments? Most financial professionals recommend that you allocate your assets to a variety of investments. Put some of your money in conservative investments with stable rates of return and distribute other assets in investments with greater potential for gains and higher risk. Your ideal "mix" will depend on your circumstances, goals, and tolerance for risk.

Am I a conservative, moderate or aggressive investor? Even conservative investments may lose earning power if their growth does not outpace inflation. On the other hand, the winner-take-all attitude of very aggressive investors holds the potential for great loss as well as great gain. To help determine where your tolerance for risk lies, review the statements at right.

• Conservative or Low-Risk Investor:
  – I don’t want to risk any of my principal.
  – I want a guaranteed rate of interest on my investment.
  – I am near retirement.
• Moderate or Medium-Risk Investor:
  – I can live with some ups and downs.
  – I would like a combination of high-risk investments and 
     low-risk investments.
  – I have some time for my money to grow.
• Aggressive or High-Risk Investor:
  – I have an iron stomach and can handle market swings.
  – I want the highest possible long-term rate of return,
     even if I risk losing principal.
  – I have at least 10 – 15 years for my investments to grow.

Whatever your investment philosophy, you should never put money in an investment you don’t understand. And, remember to reconsider your investment portfolio periodically. Review it when you experience changes in your life, such as when you get married, divorced, or have a child. It is especially important to examine your investments as you approach retirement age.