Gusto Investments offers 6 managed portfolios with pre-selected funds designed for different ages and risk tolerances. If you prefer more control, you can build a custom portfolio instead. This lets you choose individual investments from the fund menu and set the allocation percentage for each in your Gusto 401(k) or Gusto IRA. This article covers what to consider before you start and how to set up a custom portfolio.
Building a custom portfolio is a personal decision. Here are some major factors to keep in mind as you plan.
Important: Building a custom portfolio means you are responsible for selecting and managing your own investments. Do your research before getting started, and consider consulting a qualified financial adviser about your situation.
The amount of time left until you retire is your time horizon. This may be one of the most important factors in deciding how to allocate your investments. Volatility — the change in an investment’s value over time — is generally a bigger risk in the short term than in the long term.
For example, if you are retiring in 30 years, short-term market swings may have less impact on your portfolio than if you plan to retire within the next few years. With a longer time horizon, your portfolio may have time to recover from market downturns.
Risk tolerance is about how your emotions affect your investment decisions. Knowing your comfort level can help you avoid common mistakes, like reacting to short-term volatility.
Riskier portfolios tend to see higher returns when times are good, but more severe losses during downturns. If you are risk-averse, it may be a good idea to sacrifice some long-term returns by investing in less volatile assets.
Rather than concentrating your investments in one area, you may want to diversify your portfolio. This means investing across a wide range of asset classes and markets.
The goal of diversification is to reduce risk and volatility by offsetting losses in one asset class with gains in another. Rebalancing means making regular adjustments to make sure you continue to hit your target allocation over time. Both diversification and rebalancing are important tools in managing investment risk.
When choosing specific investments, consider the expense ratio — the fee a mutual fund or other investment provider charges for managing investments in the fund. Expense ratios are usually charged as a percentage of assets. The higher the expense ratio, the more the investments will cost you over time.
Choose the path that matches how you signed in.
Sign in to Gusto and go to Benefits. Under Savings, find 401(k) and select View, then select Manage 401(k).
To update the portfolio, select Change portfolio, then choose Get started.
Sign in directly at the Gusto Retirement sign-in page.
Select Portfolio to view the portfolio breakdown.
To update the portfolio, select Change portfolio, then choose Build a custom portfolio.
You will see the full investment menu, categorized by type (for example, real estate, government bonds, equity, and more). You can select any fund name to see a description, performance information, and a link to the fund's full profile.¹
Enter your desired allocation percentage for each fund you want to include.
Once your total allocation equals 100% and you are satisfied with your selections, select This portfolio suits my objectives.
Pro tip: You can reallocate your custom portfolio or switch to one of Gusto Investments' managed portfolios at any time.
¹ Investment advisory services for Gusto's 401(k) (when 3(38) fiduciary services are appointed) and SEP IRA/IRA products are offered by Gusto Investment Services, LLC, an SEC-registered investment adviser. References to “Gusto,” “we,” or “our” in this article specifically refer to Gusto Investment Services, LLC. For more information regarding fees and services, see Gusto's ADV 2A Brochure and Form CRS.
The information above is provided for educational purposes only and should not be construed as personal investment advice or a guarantee of performance. Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. All investments involve risk, including the potential for loss of principal. Performance is shown net of fees and reflects the reinvestment of interest and dividends. You are advised to consult a qualified financial adviser before relying on the information provided herein.