[AbiT88]

Hey,
I would like to ask you, if you know what risk factors should be considred when dealing with retirement plans such as 401k in particularly

[PSUMAN99]

If you are diversified, the only type of risk you need to worry about is systematic risk (risk that affects everything such as interest rate changes). However, I think the type of risk you are talking about is risk tolerance.

You have to ask yourself, "If I lose 10% of my money in one year, what would I do or how would I feel?" If the thought of losing 10% of your money in one year scares the hell out of you, you are considered to have a low risk tolerance. If your attitude is, "I'm willing to accept short-term pullbacks to achieve higher long term gains." Then you are highly risk tolerant.

Many mutual fund companies have questionnaires you can fill out that will help you assess your risk tolerance. Just realize that you have to take on more risk to achieve higher returns. However, if you can't sleep at night because you are worried about your money, then you should cut back on your risk.

[Fr_Chuck]

You need to look at your age, and the years to retirement, some funds are based on stock and you can actually lose value, but normally spread enough that over a number of years, but often they can have a 5 to 10 year down time in cycles.

Other funds are less risky so in general they are safer but earn less interest.

If your work has the 401k and they do matching funds, this is like free money so it is almost always a great idea.