MJ2001SE
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Cash: $ 0.50
Posts: 2
Joined: 08 Aug 2007
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| 401K Allocation help.... |
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Say you were 30 years old and your 401K offered these funds. How would you allocate?
EQUITY FUND
MULTIMANAGER AGGRESSIVE EQUITY
MULTIMANAGER CORE BOND
MULTIMANAGER HIGH YIELD
MULTIMANAGER HEALTH CARE
MULTIMANAGER INTERNATIONAL EQUITY
MULTIMANAGER LARGE CAP CORE
MULTIMANAGER LARGE CAP GROWTH
MULTIMANAGER MID CAP GROWTH
MULTIMANAGER MIDCAP VALUE
MULTIMANAGER TECHNOLOGY
MULTIMANAGER LARGECAO VALUE
DODGE & COX BALANCED
EQ/ALNCBERNSTEIN VALUE
EQ/BOSTON ADVISOR EQUITY INCOME
EQ/MONTAG CDW GROWTH
AXA MOD-PLUS ALLOCATION
US LARGE CAP STOCK
MSI US REAL ESTATE A
SPARTIN EXTND MKT INDEX
SPARTAN INTERNATIONAL INDEX
MID CAP GROWTH
AXA AGGRESSIVE ALLOCATION
AXA CONSERVATIVE ALLOCATION
AXA FIXED INCOME FUND
AXA MODERATE ALLOCATION
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Wed Aug 22, 2007 4:23 pm |
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efflandt
Senior Member
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Joined: 25 Apr 2005
Location: Elgin, IL USA
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Since no one has chimed in yet, I will throw out my 2 cents worth. Asset allocation can be a puzzling thing because nobody really knows what will happen in the future, so all you have to go on is history.
Many people suggest putting a certain percentage of bonds, but I found out many years ago that bond "funds" may not be as conservative as you think. They never have a real good return, and can go negative at times (sometimes for long times). So at age 55, I have nothing at all in bonds. The only cash or fixed income allocation in my 401k is in a fund that has steadily averaged 11% for the past 10 years, and actually jumped up during the recent stock market correction (over 10% year to date).
However, I also have some cash in my IRA and Roth earning ~5% between stock opportunities, besides some strong stocks, dividend paying stocks, 2 mutual funds, and sometimes a mix of ETF's.
The most stable long term equity fund in my 401k has been mid-cap blend. It lagged a bit the past couple of years, but held up stronger than large cap in the 2000 to 2001 time period, and has been stronger than large and small cap this year.
My greatest recent and long term gains (which also have the most volitility) have been widely diversified small cap int'l and large int'l growth.
Basically I look for funds with the best combination of short and long term gain out to 10 years and try to stick with funds with at least a 9 to 10% 10 year average. I am currently in 5 of our 30 choices. I have had plenty of time to sort out my selections, so I rarely make any major moves. I mostly balance by adjusting my contributions.
So take a weekend and study your choices. Pick a selection in different sectors that do best, but give more weight to long term average. And don't get discouraged if things pull back sometime during the year. Feeding contributions in during those dips (dollar cost averaging) will gain coming out of them.
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Sat Aug 25, 2007 1:22 am |
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coaster
Senior Advisor
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Joined: 11 Oct 2005
Location: Wisconsin
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Efflandt, I wish you'd chime in more often. Your comments are always worth more than two cents. 
MJ, there's only one fund in that list I recognize (Dodge & Cox Balanced) and nobody has time to look up every fund they're not familiar with. I suspect those funds for the most part aren't retail funds; i.e. they're sold to employer's plans. I tried looking one up on Morningstar, but either they don't have the info, or the name you listed isn't the name it goes by.
Nevertheless, for each of those funds there should be a prospectus and an annual report. That should give you a good idea of where the fund lies in the risk curve, and what kind of performance it's had on one, five and ten-year periods. Find one of those websites that offers an asset allocation based on your risk tolerance and your investment goals and then divide up your plan choices accordingly.
~Tim~
Eye Candy : Why Whimsy
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Sat Aug 25, 2007 3:58 am |
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eaf
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Joined: 24 Aug 2007
Location: Alaska
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It would probably be a good idea to steer clear of bond funds for awhile, since the subprime jitters are going to hit everywhere, and a lot of that toxic waste crap is hiding out in investment-grade bond funds.
My allocation goes something along the lines of this:
30% US stocks, mixed Large/Small/Value/Growth
15% Specialty Fund (Gold/REIT/Technology/whatever floats your boat)
30% Intl (Asian/Dev Markets/Euro)
25% Cash or money market or bonds -- right now, probably cash
Although I have to admit I'm a little heavier in cash/money markets than that, and I even have a chunk of money in Hi Yield Junk bonds (this is admittedly not a good idea, but I haven't gotten around to moving it out yet). Money in bonds is probably not a good idea, like I said. I tend to keep money in cash or "safe" gov't securities -- I am a pessimist when it comes to the markets, so I always have at least some money stashed away, waiting for an opportunity to invest. I've never been a whole hog kind of guy.
There are hundreds of ways to allocate your money. Good luck.
-eaf
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Sun Aug 26, 2007 9:55 am |
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Fern1
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I would study the Morningstar rankings and other data for each of these funds first, then put perhaps 85% of my contribution into stocks divvied up among small, mid and large cap domestic and maybe 15-20% international, with the remainder in a balanced fund. I would also make myself aware of the various annual charges and in the case of a tie, go with the lower annual charge.
You've very young so you can afford to be aggressive.
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Wed Aug 29, 2007 2:54 pm |
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