401(k) or brokerage?

To inform, to amuse, and to help you make money

Q

Is investing in individual stocks through a brokerage account better than investing through a 401(k) account?

— A.A., Salisbury, Maryland

A

Either can work well. You’ll have more control and the possibility of faster growth with individual stocks, but that can also be a riskier strategy, since one or more stocks might severely disappoint you.

With a 401(k) account, your investment choices will typically be far more limited; you may have to choose from a small group of mutual funds, for example. But 401(k)s offer tax breaks, and if your employer matches part of your contribution to your account, that’s free money.

You can actually do both — use your 401(k) and also invest in some individual stocks. But if you’re not going to research and keep up with those individual stocks, just stick with a low-fee, broad-market index fund or two — which you can probably also invest in through your 401(k).

Whichever route(s) you take, start saving and investing as soon as you can to give your money lots of time to grow. You can learn much more about retirement and investing via our “Rule Your Retirement” service at Fool. com/services.

Q

How often should I review stocks I hold in my portfolio?

—E.m.,dallas

A

Ideally, follow those companies at least every three months, when they issue their quarterly and annual reports. Read the reports and their accompanying press releases and financial statements — all of which are typically found on the companies’ websites. Check for any articles about the companies at Google News and at Fool.com. You can check on big, established companies less often, but the more you know about all your holdings, the smarter the decisions you can make about your portfolio. shares of an S&P 500 index fund near that low, say at 700, and hung on, you’d have done quite well, as the index was recently at 3,974 — reflecting a gain of over 450%. If you’d bought into the index a year later, when it was at 1,140, your gain would be under 250%.

It’s not a bad idea to keep a little cash on hand for occasional market crashes, to snap up low-priced shares of stocks you’d love to own.