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The Rules: Understanding Your 401(k) 26 Investment Options Now that your money is in the plan, it has to go somewhere to make more money for you. In other words, it must be invested. Investments come in all flavors, which is why we have devoted a good portion of this book to the topic. In this section, we'll limit our focus to how investments get into your plan and your options for moving money around. Investments get into your 401(k) because they were selected by the plan's fiduciaries, the people responsible for making decisions about how the plan operates. Just as the fiduciaries pick the man- ager (plan administrator), the security guard (trustee), and the umpire (record keeper), they also pick the agents (investment managers). How do the fiduciaries pick the agents? Based upon their ability to make money. The big question for fiduciaries is deciding who should manage your money. Fiduciaries really have six choices when it comes to money managers: · Institutional investment managers--They set up private accounts and create investment strat- egies just for your 401(k) plan. These investments are generally not sold to the public; they're sold just to you. · Institutional investment advisors--They set up investment strategies for protective shells such as 401(k), pension, and profit-sharing plans. These investments are not sold to the public, but your 401(k) investments money may be commingled with money from 401(k) participants at other companies. · Mutual funds companies--Your investments are commingled with funds from other 401(k) in- vestors and also include investments that may be available to the general public. Most of these firms are called investment-management companies. · Banks and trust companies--Sometimes banks sell their own investments, and sometimes they