How many funds should I have in my 401(k)? Is there an optimal number that balances both diversity and manageability? When considering this crucial aspect of retirement planning, one must contemplate the trade-offs between risk and potential returns. Is it wiser to have an expansive selection of funds, perhaps to capture a wider array of investment opportunities, or should one focus on a more concentrated portfolio that may offer simplicity and ease of management? As I ponder this, I wonder if a specific threshold exists—perhaps three, five, or even ten funds? Furthermore, could the choice of funds impact my overall financial trajectory during retirement? Are actively managed funds more favorable compared to index funds in this respect? Delving deeper into this inquiry, one might ask if market conditions or individual risk tolerance should further influence the decision on the number of funds I should possess within my 401(k).’