Choosing 401k Funds

[chemgeek]

I know this gets asked around here a lot, but I'm trying to educate myself about this as best as possible. We're 27/28 and comfortable with a more aggressive investing approach for the time being. We had my husband's Ascensus 401k set on auto but now want to be more proactive on managing it, since this will be the first year we max it out. Here's what we're invested in at the moment, with about 80k invested total. I've attached a document that has ALL of the possible choices. It has gross expense ratios listed as opposed to net, which is confusing the matter. We also have a Roth IRA through Sharebuilder/Capital1 that is currently all S&P500 ($1000 invested) and we're planning on opening a tIRA this year too. 

Fund
% Allocation   Net Expense Ratios
         
MFS Lifetime 2045 R4 (LTMUX)
30.07%   .81%   
MFS Lifetime 2055 R4 (LFIUX)
29.87%   .81%      
Vanguard S & P 500 ETF (VOO)
6.13%   .05%      
Dodge & Cox Income Fund (DODIX)
6.13%   .43%      
Snow Capital Opportunity Fund Inst (SNOIX)
5.88%   1.33%      
Brown Advisory Growth Equity Fund Inv (BIAGX)
5.85%   .93%      
Delaware Emerging Markets Instl (DEMIX)
5.06%   1.46%      
Vanguard Total Bond Market ETF (BND)
5.02%   .08%      
Perritt Micro Cap Opportunities Fund (PRCGX)
4.90%   1.24%      
Vanguard Prime Money Market Inv (VMMXX)
0.99%   .16%      
Vanguard ShortVa-Term Bond Index Admiral (VBIRX)
0.10%   .10%

TL;DR: How many different funds do people usually choose? Do you base your choices on net expense ratio or gross? I've read through the Jim Collins stock series and found that helpful, but am still nervous to start really tailoring things.

Any tips would be greatly appreciated!

[wtjbatman]

You want to use those Vanguard funds in your 401k to construct a portfolio that meets your desired asset allocation, aka what percentage in stocks and what percentage in bonds. You didn't say what you feel comfortable with (besides "more aggressive), so it's hard to give specific advice. But if I was you, I would do something like...

50% - Vanguard S&P 500
20% - Vanguard Small Cap
10% - Vanguard Developed Markets
20% - Vanguard Total Bond Market

Again, that's just sort of a general, heavy U.S. equities but otherwise market weighted portfolio. In the end the actual AA likely won't matter as much as long as you find something you are comfortable with even if the market were to tank. The higher the percentage of equities, the more your portfolio value can drop. If you will ride out those storms, then it's ok to be riskier (more stocks and less bonds).

I strongly encourage you to do more research on developing a personal AA. I recommend starting here: http://www.bogleheads.org/wiki/Asset_allocation

[Singularity]

You want to use those Vanguard funds in your 401k to construct a portfolio that meets your desired asset allocation, aka what percentage in stocks and what percentage in bonds. You didn't say what you feel comfortable with (besides "more aggressive), so it's hard to give specific advice. But if I was you, I would do something like...

50% - Vanguard S&P 500
20% - Vanguard Small Cap
10% - Vanguard Developed Markets
20% - Vanguard Total Bond Market

Again, that's just sort of a general, heavy U.S. equities but otherwise market weighted portfolio. In the end the actual AA likely won't matter as much as long as you find something you are comfortable with even if the market were to tank. The higher the percentage of equities, the more your portfolio value can drop. If you will ride out those storms, then it's ok to be riskier (more stocks and less bonds).

I strongly encourage you to do more research on developing a personal AA. I recommend starting here: http://www.bogleheads.org/wiki/Asset_allocation

I Agree Very Solid General Recommendations.  This also cuts your total Expenses from 0.84% to just 0.069% which is a 10x Improvement!
You also have broad diversification with the S&P 500 including 500 Large Companies many you use products from.  In total you are diversified over several thousand companies with this simple portfolio. 

Vanguard S&P 500  (VOO)                         50%   0.05
Vanguard Small Cap (VB)                               20%   0.095
Vanguard International Developed (VEA)       10%   0.09
Vanguard Total Bond Market (BND)               20%   0.08
   Average   0.069% Expense


I also highly recommend putting together an Investment plan.  How about opening additional Roth IRA accounts to save more? 

Investment Planning https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6211
How to ask Portfolio Questions https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212