Author Topic: please help me re-allocate my 401K  (Read 1983 times)

michaelbsf

  • 5 O'Clock Shadow
  • *
  • Posts: 7
  • Location: Chicago, IL
please help me re-allocate my 401K
« on: June 21, 2013, 09:41:24 AM »
Hi there!

I am very new this.. please help me balance my 401K portfolio

I had everything invested in bonds and cash up to this moment and my return ration was 2.4% for the last 1.5 years.  Now, I want to re-allocate my portfolio in more aggressive way... I am Ok with some risks because I have only around 10K in there..  not quite sure how to do this in a correct way... I have studied performance for the last 2 year of a dozen of funds.. So I am thinking of the following portfolio in Transacmerica:


Name     1 mo.   3 mos.   YTD   1 yr.   3 yrs.   5 yrs.   10 yrs.   Since* Inception   Expense Ratio

20% Large Cap
1. SSgA S&P 500 Index Ret Opt   2.26   7.99   14.97   26.22   15.87   4.57   6.71   N/A   0.90

20% Mid Cap
2. SSgA S&P Mid Cap Index Ret Opt   2.19   7.59   16.35   28.94   16.59   6.91   10.25   N/A   0.79

20% Specialty
3. Vanguard REIT Index Ret Opt   -5.99   3.10   8.16   16.61   16.06   5.34   10.61   N/A   0.83

20% Bond Long Term
4. Loomis Sayles Bond Ret Opt   -1.51   1.77   3.32   14.31   10.97   9.41   7.79   N/A   1.25

20% Large/Mid Value Equity
5. American Funds Washington Mutual Investors Ret Opt   2.11   8.94   15.28   26.34   17.17   5.10   6.99   N/A   0.93

What do you think?

What factors do I use to make a decision besides return for the previous years?

Thank you
« Last Edit: June 21, 2013, 09:43:05 AM by michaelbsf »

matchewed

  • Magnum Stache
  • ******
  • Posts: 4313
  • Location: CT
Re: please help me re-allocate my 401K
« Reply #1 on: June 21, 2013, 11:17:39 AM »
Some of your questions (such as the question regarding how to evaluate a fund) drill towards a need for some more financial education. Understand that based on your possible age you can afford more or less risk (generally the younger you are the more risk you can tolerate). Given that if you are young I'd look to invest in a total market if available. If that is unavailable the S&P 500 fund is fairly aggressive

Seeing the expense ratios in your potential funds you may also want to consider just providing to match unless there are alternatives.

If I were in your shoes I'd -
1) Invest all in the S&P 500 for your 401k.

2) Educate yourself on financial matters. Understand what you're doing and why.

3) Determine what is your plan and revisit your allocation.

WetBandit

  • 5 O'Clock Shadow
  • *
  • Posts: 22
Re: please help me re-allocate my 401K
« Reply #2 on: June 22, 2013, 12:54:43 PM »
Good point Match,

As I just went through what this investor is going through, how do I allocate my 401k and my ROTH?

Most of the expertise that I received was invest in the S&P / Large Value (Since they follow each other closely). At a young age, such as myself, we can afford to be aggressive for 20-25 years out. The market will be and down, dont look at it. Set your allocation to 100% S&P500 and look at it in 20 years, youll be impressed. Over time, the market always goes up!...buy on the dips or downtimes and dont sit on cash trying to time the market (that was a problem of mine before talking to others here).

When you can set and forget you will be pleasantly surprised how much better life feels :)

I want to add something.... why are your expense ratios so damn high?!?!

michaelbsf

  • 5 O'Clock Shadow
  • *
  • Posts: 7
  • Location: Chicago, IL
Re: please help me re-allocate my 401K
« Reply #3 on: June 25, 2013, 12:00:00 PM »
Thank you for your answers!

Which of them are S&P / Large Value? see attached list of options that I have in Transacmerica

Can you recommend any particular of them?

Regarding high Expense Ratio, if you check this list - most of them have Expense Ratio close to 1, so my choice looks just average...