Diversify your portfolio
It’s important to spread your risk. Do not own company stock in the 401(k) or tilt it heavily toward one particular asset class.
Instead, consider low-cost index funds or target-date funds that are allocated according to your risk tolerance.
Usually this means that when you’re young and have a long time horizon, the portfolio should be tilted more heavily toward stocks and less toward bonds and cash. Make sure the underlying stocks represent a variety of industries, sizes of companies and geographies – and are not concentrated in just one sector.