When it comes to making our 401(k) investment decisions, too many of us check a few boxes on day one of a new job and head back to our cubicles intent, perhaps, on surfing the Internet while the boss ain't looking. Adding insult to investment injury, some of us might even figure that, what the heck, it's a retirement account anyway, so I can just set it aside and forget it, right?

Alas, it isn't so
For starters, it's important to perform the same kind of due diligence on the funds that appear in your company's 401(k) lineup that you would for investments in your taxable or IRA accounts. Indeed, I'd argue that it's even more important, since you'll be making regular contributions to the funds you pick with every paycheck.

What's more, because 401(k) lineups often seem to have been assembled by folks who -- however well-intentioned -- seem to know little about asset allocation and even less about mutual funds, it really is your job as a savvy investor to put the picks through their paces.

On that front, a short list of items to consider would include:

  • Expense ratios. (The typical stock fund costs roughly 1.4%.)
  • Managerial tenure. (The average stock fund manager has been on the case for just over four years.)
  • Performance -- but only during the current management team's watch. (Don't be mesmerized by star ratings. Those are based on the fund's track record, which may not belong to the team that's currently in charge.)

Put it together
Even after filtering for those criteria, though, you'll still need to make decisions about how to assemble the funds you've chosen into a portfolio.

Generally speaking, the longer your timeline and the greater your tolerance for volatility, the more equity exposure you should have. Buttoned-down types, or those for whom retirement is approaching, will typically want to err on the side of caution and allocate a bigger percentage of their personalized pie charts to fixed-income picks.

Notice, however, that I said "generally" and "typically."

One size fits one
That's because no two investors are alike. Indeed, a portfolio that features hefty exposure to growth-oriented large caps like DirecTV (NYSE:DTV), Yahoo! (NASDAQ:YHOO), eBay (NASDAQ:EBAY), and Research In Motion (NASDAQ:RIMM) -- each of which currently sports consensus earnings estimates for the next five years in excess of 20% -- might seem like a speed demon to certain investors.

More aggressive types, however, might scratch their heads at the paucity of smaller-cap growth exposure. Little fish health-care concerns MGI Pharma (NASDAQ:MOGN) and Telik (NASDAQ:TELK), they might point out, boast analyst estimates in excess of 40% over the next five years. That's also true of Virginia-based coal concern Alpha Natural Resources (NYSE:ANR).

It's all in the eye of the informed shareholder -- who, by the way, will want to rebalance his or her portfolio annually and dial down equity exposure as retirement time draws closer.

Make a start
For those reasons, Champion Funds -- the Fool newsletter service that I run point on -- provides Aggressive, Moderate, and Conservative model portfolios. I strongly encourage our community members to tweak these models to their own timelines and investing temperaments.

Beyond that, our news and analysis features (which include specific fund recommendations) can help you make the most of your IRA and taxable accounts, too -- places where you have more room to maneuver. Indeed, since we first opened for business roughly two years ago, our recommended funds have beaten the market by more than 10 percentage points.

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eBay is a Motley Fool Stock Advisor recommendation.

Shannon Zimmerman, lead analyst for Motley Fool Champion Funds, doesn't hold a financial position in any of the companies listed.The Fool is investors writing for investors, and you can read all about our disclosure policy by clicking here.