Author Topic: 401k Elections  (Read 2398 times)

RabStache

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401k Elections
« on: January 29, 2014, 10:36:23 AM »
I had a quick question regarding my 401k elections.  I'm 24 so basically just starting out.  I've attached a picture of my current election choice.  My question was: Should I remove the split between the S&P500 and Russell 2000 and just put it all into the Russell 3000?  Is there a difference between the two strategies?

What would be your recommendations overall?


dandarc

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Re: 401k Elections
« Reply #1 on: January 29, 2014, 03:06:37 PM »
There is a big difference between the two strategies - Investing in the Russel 3000 would be much more conservative than your current allocation.

The Russel 3000 is market cap weighted.  This means that you get much more of the large cap stocks than your current allocation.  The Russel 3000 currently (this will fluctuate depending on market forces) looks about like this:

Large-Cap - 72.44%
Mid-Cap - 19.13 %
Small-Cap - 8.43 %

Your current allocation of the S&P 500 fund and Russel 2000 money looks like:
Large-Cap - 56.25 % (.45 / .8)
Mid-Cap - 4.58 % (.1046 * .35 / .8)
Small-Cap - 39.17 % (.8955 * .35 / .8)

So if you switch to all Russel 3000, you'd be owning more Large Caps, more Mid Caps and less Small Caps.  Basically it would shift you more towards larger companies - so (theoretically) less risk and less reward which is the definition of a more conservative allocation.

b4u2

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Re: 401k Elections
« Reply #2 on: January 29, 2014, 04:14:32 PM »
Maybe this can be a generic 401k election thread? I am curious about mine. Should I diversify more? Are some of my investments duplicates?

25.63%    FID BLUE CHIP GR K            Exp .61   Mang .55
18.41%    FID MID CAP STOCK K            Exp .51   Mang .53
15.34%    VANG PRIMECAP ADM            Exp .36   Mang .34
14.86%    BARON GROWTH INST            Exp 1.06 Mang 1
13.76%    ROCKWELL COLLINS STK    Exp .02
10.84%    MSIF INTL EQUITY I                    Exp .97   Mang .8
1.16%    FID PURITAN K                            Exp .47   Mang .4
100%   
« Last Edit: January 29, 2014, 05:42:51 PM by b4u2 »

RobertBirnie

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Re: 401k Elections
« Reply #3 on: January 29, 2014, 05:17:42 PM »
For 401k my personal rule of thumb is simple simple simple. I base my main investment choices on the Fees first and then allocation second. What kind of fees do all these funds have?

RabStache

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Re: 401k Elections
« Reply #4 on: January 30, 2014, 05:13:19 AM »
The fees are as follows:

  • 45% SP500                      Exp: .04%
  • 35% Russell 2000            Exp: .09%
  • 15% International Index  Exp: .10%
  • 5% Bond Index                Exp: .0725%

Russell 3000 Exp: .0884%