Greetings - I am hoping to get some help here. I am 34 years old, have been contributing to my 401k for a while, but am new to actually learning about investing. One such learning has been about diversification. I now understand the 3 fund portfolio, why we do it, etc.
But past me...well I did the best I could at the time. I am a very good saver, very frugal, but was not very educated. And so I come to you today with 200k in a 401k that's all invested in an S&P 500 fund. It's not the worst thing in the world, I realize. It's performed well. But now that I have learned about diversification...boy does it make me nervous and I want to fix this.
So I am trying to figure out...I know I need to diversify. I understand the 3 fund portfolio. But can someone explain to me literally the steps how to do it? Do I rebalance my portfolio to do it? Do it all at once? DCA? Just change my contributions moving forward to include other funds and stop contributing to the S&P 500? If someone can help me get a path forward, it would be really helpful. Getting overwhelmed and confused is how I got to this point today and I'm trying to get myself unstuck and actually do something.
Thank you very much in advance. Let me know if you need any more information.
EDIT: Adding this in because I've received many comments on this. My employer 401k is very limited. I can't "VT and chill." I am limited to several target date funds, the S&P 500, a mid cap, a small cap, a bond fund, an international fund, an emerging markets fund, and company stock. And that's really about it.