Sofia is smart and straightforward. When she doesn’t understand something, she always asks questions. But when a financial advisor visited her workplace to explain her company’s 401(k), Sofia felt flustered.

The advisor showed the employees their investment options; rolling off terms like equities, fixed income, target allocation and market risk. These terms might make sense– if you’re a regular reader of the Wall Street Journal. But most people don’t curl up in bed with investment business pages.

Fortunately, you don’t have to. It’s easy to pick funds for a 401(k). First, scan the investment options. If target retirement funds (also known as target date funds) are among the funds offered, your job is half done. A target retirement fund is a complete portfolio wrapped up in a single fund. It usually contains U.S. and international stocks, also known as equities, and bonds, which are sometimes referred to as fixed income. Investing in such a fund is like putting your eggs in different baskets. Diversification offers safety.

Most target retirement funds have a date in their name. For example, Vanguard’s Target Retirement 2030 fund is well suited for most people who plan to retire close to 2030. About 71 percent of the fund is allocated stocks and about 29 percent is invested in bonds.

Younger investors can afford to take higher market risk. Market risk refers to the degree to which a portfolio might drop when the stock market falls. For example, a young investor planning to retire around 2050 might choose Vanguard’s Target Retirement 2050 fund. About 88 percent of the fund is allocated to stocks. That means its market risk is higher than Vanguard’s Target Retirement 2030 fund, which has 71 percent allocated to stocks. Stocks beat bonds over long time periods, but stocks are more volatile. Most young investors can afford to take higher market risk. If stocks drop heavily, younger investors have more time for their portfolios to recover.

Fortunately, Vanguard isn’t the only firm that offers target retirement funds. Fidelity has several, as do fund companies like T. Rowe Price, Schwab, TIAA and American Funds. Most investors in target date funds perform well over time.

While other investors often sweat over which funds to pick, target date fund investors don’t have to decide. That might sound lazy. But it’s appealing for several reasons.

First, most investors pick individual mutual funds based on past performance. But yesterday’s winners don’t always win. For example, Stan Wawrinka won the 2016 U.S. Open tennis championships. He beat the great Novak Djokovic in the final. If you had bet money that either man would win in 2017, you would have been disappointed. Both men were injured. Rafael Nadal raised the trophy.

Picking mutual funds is a lot like that. According to Morningstar, the typical investor in actively managed funds underperformed their fund’s posted return by an average of 0.79 percent per year over the ten-year period ending December 31, 2016. They usually bought funds that had experienced a winning streak. They often sold funds after they had slumped. But the funds they bought often did poorly (after they had bought them) and the funds they sold often performed well (after they had sold them). Such tail chasing ensured that investors paid a higher-than average price for their funds. That’s why they underperformed the posted returns of the funds they bought by an average of 0.79 percent per year.

You might look at a fund’s long-term track record and bet your future on that. But that would be like betting money on Roger Federer to keep winning tennis tournaments. Even a long-term track record doesn’t reveal the future.

Most target retirement fund investors succeed because they don’t chase the past. According to Morningstar’s 2017 Target Date Landscape Report, target retirement fund investors beat the posted performance of their funds by an average of 1.4 percent per year during the decade ending December 31, 2016. Target date fund investors usually dollar-cost average (investing a constant sum) every month. They don’t jump around, chasing yesterday’s winning fund. As a result, when their fund unit prices drop, their regular monthly contributions buy a greater number of units. When their fund unit prices rise, their money buys fewer units. As a result, they pay a lower-than average price.

Target date funds also maintain a relatively stable target allocation. In other words, if the target retirement fund contains 60 percent stocks and 40 percent bonds, the fund company rebalances the holdings to maintain that allocation. If stocks fall hard, the fund holdings get rebalanced. The fund managers would usually sell bonds and buy the lower-priced stocks to maintain the target allocation.

What’s more, target retirement funds slowly increase their bond allocations as investors age, reducing risk in the process.

Most investors in individual actively managed funds do the opposite. They pay a higher than average price because they chase past performers. They also fail to rebalance after the market tanks.

If a company 401(k) doesn’t include target retirement funds, investors can build a portfolio with individual funds. Such investors, for example, might choose a U.S. stock market fund, an international stock fund and a bond market fund.

Most index funds (but not all!) charge lower fees than actively managed funds. As a result, index funds perform better over time. Smart investors ignore historical fund performance and build portfolios with low-cost index funds. I’ve listed some portfolio models below, using index funds with Fidelity, T. Rowe Price, Schwab and TIAA.

If your 401(k) offerings don’t include target date funds or index funds, it’s time to make some noise. Fidelity’s own employees once sued Fidelity because their 401(k) didn’t include a full selection of index funds. Fidelity had to pay damages. This emphasizes the importance of low-cost investing. Diversification and rebalancing are just as important to reduce risk and maintain a target allocation.

Building Portfolio with Individual Funds

Fidelity Portfolios

Fund Name Fund Code Expense Ratio Conservative Cautious Balanced Assertive Aggressive
Fidelity Total Market Index Fund Investors Class FSTMX 0.10% 15% 25% 30% 40% 50%
Fidelity International Index Fund-Investors Class FSIIX 0.20% 15% 20% 30% 35% 50%
Fidelity Total Bond Index FBIDX 0.20% 70% 55% 40% 25% 0%

T. Rowe Price Portfolios

Fund Name Fund Code Expense Ratio Conservative Cautious Balanced Assertive Aggressive
Total Equity Market Index POMIX 0.33% 15% 25% 30% 40% 50%
International Equity Index PIEQX 0.49% 15% 20% 30% 35% 50%
U.S. Bond Enhanced Index PBDIX 0.30% 70% 55% 40% 25% 0%

Schwab Portfolios

Fund Name Fund Code Expense Ratio Conservative Cautious Balanced Assertive Aggressive
Schwab Total Stock Market Index SWTSX 0.09% 15% 25% 30% 40% 50%
Schwab International Index Fund SWISX 0.19% 15% 20% 30% 35% 50%
*Schwab Intermediate Term U.S. Treasury ETF SCHR 0.09% 70% 55% 40% 25% 0%

TIAA-CREF Portfolios

Fund Name Fund Code Expense Ratio Conservative Cautious Balanced Assertive Aggressive
TIAA-CREF Equity Index Fund TINRX 0.35% 15% 25% 30% 40% 50%
TIAA-CREF International Equity Index TIERX 0.82% 15% 20% 30% 35% 50%
TIAA-CREF Bond Index Fund TBILX 0.46% 70% 55% 40% 25% 0%

Andrew Hallam is a Digital Nomad. He’s the author of the bestseller, Millionaire Teacher and The Global Expatriate's Guide to Investing: From Millionaire Teacher to Millionaire Expat.