Joe decides that he will contribute $5,000 a year to his 401(k) plan when he starts saving for retirement. What is the best action Joe can take to ensure that his money will grow the most before he retires?

Question

anonymous · Answer

I think he should look for accounts that pay the highest interest rate and have the highest rates of compounding.  Its an odd question because there is a great deal of uncertainty in investing, but generally you want to look for the highest rate of return with least risk.  Though there is usually a trade off between the two.  Thats why a diversified portfolio is the usually recommended option.