You usually have some say in how the money in your 401(k) retirement account is invested, even if your employer manages the 401(k) account. If you're the sole decision-maker, the following tips on how to invest your funds are even more important:

  • Come up with a plan. Know what you're doing and why: Don't invest blindly, hoping that it'll all come out well in the end.

  • Establish realistic expectations, and then pick funds that have the potential to meet your goals. Learn from others, but build the portfolio that's right for you.

  • Remember that higher risk doesn't guarantee a higher return.

  • Avoid funds that have dramatic up-and-down swings, particularly if you're nearing retirement.

  • Invest in a mix of asset types, because no one knows which investments will be hot at any point in time.

  • Find a professional to help you choose the best investments.