xboxundone
Senior Member
Cash: $ 67.83
Posts: 796
Joined: 19 Sep 2004
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| 401K investing help |
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I am re looking at my 401k it is through fidelity I atleast contribute my companies match (6%) as i don't want to pass up the free money (right now i am contributing 10%.) I am just a little dissapointed in my returns and want to see what yalls input on my 401k and maybe some thing i should change to get a better return, I am getting between 1 and 5% return month to month.... I am figuring i should be able to do better.... my personal rate of return YTD is 3.7%, this is not a bad return.... maybe my hopes are to high in todays market  Here is my current deduction % layout any suggestions?
Investment Option Current
%
Stock Investments
LARGE CAP
FIDELITY CONTRAFUND 15%
SPARTAN US EQ INDEX 5%
INTERNATIONAL
MSI INTL EQUITY A 10%
SPARTAN INTL INDEX 10%
Blended Fund Investments*
FID FREEDOM 2040 10%
TRP CAP APPRECIATION 10%
UBS DIVERSIFIED 15%
Bond Investments
STABLE VALUE
FID MGD INC PORT 10%
INCOME
FIDELITY GOVT INCOME 5%
PIMCO TOT RETRN INST 5%
TRP HIGH YIELD 5%
Total 100%
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Tue Nov 02, 2004 4:40 pm |
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BlankenshipFP
Money Talk Advisor
Cash: $ 79.56
Posts: 390
Joined: 05 Oct 2004
Location: Illinois
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Before a complete review, I need to know your age, and your anticipated retirement timeframe. I also would like to know what your feelings are with respect to risk. By that, I mean - are you comfortable with your current level of risk in this portfolio? Are you inclined to increase or decrease your exposure to risk? Do you watch your account on a daily, weekly, monthly, or quarterly basis?
At first glance, it appears that you are well diversified, and your return is about what I would expect - given that the ytd return for the total market has been approximately 3.8%.
A quick review with a proxy of three Vanguard funds to represent a benchmark - VBMFX (total bond mkt) at 25%, VGTSX (total intl mkt) at 20%, and VTSMX (total stock mkt) at 55% - show a ytd return of approximately 5.17%. This difference may possibly be due to the A share expenses (with the MSI Fund), as well as having the allocation into the money market fund (Stable Value), which would obviously underperform the equities and bonds. Also, since you are currently contributing, dollar-cost-averaging would tend to drive down your return.
I can give you some more specific advice when I know a little more about your specific situation. You don't need to give your exact age, just a range (20's, 30's, etc.).
'til later -
Jim Blankenship, CFP®, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Wed Nov 03, 2004 4:08 am |
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xboxundone
Senior Member
Cash: $ 67.83
Posts: 796
Joined: 19 Sep 2004
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thanks for the reply. I am currently 25 I want to retire as soon as possible but in reality i would like to retire in my 50's. I am willing to take on a little more risk as i am 25, I think part of my average return might be due to contributing into the bonds/mmkt as i did that at first as when i first got in on 401K all stocks were tanking........so at the time it was great everyone i was talking with was loosing bigtime but i was getting a gain of about 2% If you need more information let me know.
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Wed Nov 03, 2004 12:12 pm |
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BlankenshipFP
Money Talk Advisor
Cash: $ 79.56
Posts: 390
Joined: 05 Oct 2004
Location: Illinois
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Given your age, I would definitely consider reallocating to something like a 90-10 split (equity to debt) ratio. I like your choice of the Pimco fund as a hedge against equities tanking, but there is little need to have a 25% allocation in fixed/stable value instruments at your age.
I have not completely analyzed your allocation in equities (I'm away from my office for a few days), so I can't comment on how that allocation is set up for now. Ideally, you should have diversification across capitalization as well as value vs. growth, meaning you should have small, mid, and large cap growth and value exposure, with a weighting toward small and mid cap growth (for highest potential gains). You might also want to reduce your international exposure and diversify it where possible. All of these suggestions are totally a matter of taste - there are dozens of ways to slice and dice things.
After I've returned to the office, I should be able to give you a better take on your current allocation by style.
'til then -
Jim Blankenship, CFP®, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Wed Nov 03, 2004 4:04 pm |
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xboxundone
Senior Member
Cash: $ 67.83
Posts: 796
Joined: 19 Sep 2004
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quote:
Originally posted by BlankenshipFP
Given your age, I would definitely consider reallocating to something like a 90-10 split (equity to debt) ratio. I like your choice of the Pimco fund as a hedge against equities tanking, but there is little need to have a 25% allocation in fixed/stable value instruments at your age.
I have not completely analyzed your allocation in equities (I'm away from my office for a few days), so I can't comment on how that allocation is set up for now. Ideally, you should have diversification across capitalization as well as value vs. growth, meaning you should have small, mid, and large cap growth and value exposure, with a weighting toward small and mid cap growth (for highest potential gains). You might also want to reduce your international exposure and diversify it where possible. All of these suggestions are totally a matter of taste - there are dozens of ways to slice and dice things.
After I've returned to the office, I should be able to give you a better take on your current allocation by style.
'til then -
Thanks again for your input. I would love to talk with you more concerning my 401K maybe even on a more specific details in dealing with the current fund allocation. As i have around 13K in the plan currently in various areas that may or may not be represented in the breakdown i showed above as that is my current additions are brokendown in that manner. What i might do is since i do have a good stake in stable values now is not contribute any to them to help shift more to 90-10 as you stated.
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Wed Nov 03, 2004 5:35 pm |
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