The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: RabStache 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?

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:
LargeCap  72.44%
MidCap  19.13 %
SmallCap  8.43 %
Your current allocation of the S&P 500 fund and Russel 2000 money looks like:
LargeCap  56.25 % (.45 / .8)
MidCap  4.58 % (.1046 * .35 / .8)
SmallCap  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.

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%

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?

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%