Author Topic: Total noob question re: deferred comp allocation  (Read 3888 times)

Stachetastic

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Total noob question re: deferred comp allocation
« on: October 06, 2014, 08:00:24 AM »
I have contributed to deferred comp for 10 years or so, but am now looking to ramp things up. I've always just allocated to FPA capital and lifepath 2045, at the suggestion of the rep when I first signed up. My husband has done the same. Now that I look further, I see several vanguard options. Are these what I should be considering? How do I know the difference? Thanks for your insight and patience!

dandarc

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Re: Total noob question re: deferred comp allocation
« Reply #1 on: October 06, 2014, 08:05:10 AM »
Need more info - which funds, specifically are you considering?  What are the expense ratios (these are often different within a retirement plan than on the retail investor side)?  Any other fees to consider?  That's just base information - then you've gotta consider your risk tolerance and such.

dandarc

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Re: Total noob question re: deferred comp allocation
« Reply #2 on: October 06, 2014, 08:15:55 AM »
Also - how is your allocation currently split between the two funds?

I ask because that FPA Capital fund appears to be a small/mid-cap fund - and not a very highly diversified one.  That's fine as long as you're aware of it and are OK with being in a risky position.  Say it is a 50/50 split.  Your 2045 fund will likely have some overlap of the small and mid-cap ranges, so you might be like 55-60% in small/mid-cap stocks.  If that's your investment plan - more power to you.  If you haven't really thought about this allocation, and just took the rep's advice more or less blindly, you'll want to do some research to be sure you're OK with the position.

Stachetastic

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Re: Total noob question re: deferred comp allocation
« Reply #3 on: October 06, 2014, 08:29:00 AM »
It is currently a 50/50 split between the two. I'm looking to be more on the conservative side of investing, but I don't even know that much for sure. I see vanguard capital opportunity, institutional index, international growth, small cap index, total bond market index, and total international stock index. Ian currently wading through the expense ratio info, which I had never even considered. Thanks!

GGNoob

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Re: Total noob question re: deferred comp allocation
« Reply #4 on: October 06, 2014, 08:33:46 AM »
Feel free to post all available funds with a list that includes expense ratio and ticker if available.


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Stachetastic

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Re: Total noob question re: deferred comp allocation
« Reply #5 on: October 06, 2014, 12:20:00 PM »
I've copied and pasted it here from the deferred comp website, but the format is all wonky. The expense ratio is listed on the end of each line. Thanks again for your patience in walking me through this!


Investment Option

 
Current
 Price As Of
 10/03/14

YTD
 1/01/14-
 9/30/14
 
1 Yr.
 10/01/13-
 9/30/14
 
3 Yr.
 10/01/11-
 9/30/14
 
5 Yr.
 10/01/09-
 9/30/14
 
10 Yr.
 10/01/04-
 9/30/14
 
Since
 Adoption
 
Adoption
 Date 
 
Expense
 Ratio 

 
 
 International Stocks
TEMPLETON FOREIGN  7.87000000  -1.10  5.81  15.63  7.47  7.53  N/A  N/A  .94
 
VANGUARD INTERNATIONAL GROWTH  70.65000000  -2.65  4.49  15.14  8.49  8.11  N/A  N/A  .35
 
VANGUARD TOTAL INTERNATIONAL STOCK INDEX  107.50000000  .06  4.94  12.42  5.87  6.78  N/A  11/29/10  .10
 
 
 Small-Cap Stocks
FPA CAPITAL  43.07000000  1.45  6.78  15.75  12.63  8.34  N/A  N/A  .83
 
HARTFORD SMALL COMPANY  21.98000000  -.05  9.19  22.28  16.13  10.60  N/A  N/A  .72
 
VANGUARD SMALL CAP INDEX  152.99000000  .64  9.54  23.59  16.29  9.88  N/A  12/17/10  .06
 
 
 Mid-Cap Stocks
VANGUARD CAPITAL OPPORTUNITY  117.86000000  11.41  19.94  27.78  16.42  11.01  N/A  N/A  .41
 
 
 Large-Cap Stocks
DODGE & COX STOCK  178.47000000  8.00  20.77  27.22  16.07  8.17  N/A  N/A  .52
 
FIDELITY CONTRAFUND  100.94000000  6.24  17.41  21.51  15.74  10.28  N/A  N/A  .67
 
FIDELITY GROWTH COMPANY  127.54000000  7.15  15.73  23.48  17.88  11.60  N/A  N/A  .83
 
OHIO DC LARGE CAP GROWTH  66.24968900  3.59  N/A  N/A  N/A  N/A  3.59  08/01/14  .46
 
VANGUARD INSTITUTIONAL INDEX  180.44000000  8.33  19.72  22.99  15.70  8.14  N/A  N/A  .02
 
 
 Asset Allocation Funds
LIFEPATH 2020  1.52814640  4.01  7.66  10.27  8.35  N/A  5.69  01/02/08  .20
 
LIFEPATH 2025  1.57393030  4.07  8.33  11.64  9.00  N/A  5.66  01/02/08  .20
 
LIFEPATH 2030  1.61410447  4.13  8.90  12.78  9.56  N/A  5.91  01/02/08  .20
 
LIFEPATH 2035  1.65109559  4.18  9.38  13.86  10.04  N/A  5.70  01/02/08  .20
 
LIFEPATH 2040  1.68613367  4.23  9.92  14.85  10.45  N/A  6.01  01/02/08  .20
 
LIFEPATH 2045  1.71655398  4.30  10.40  15.70  10.88  N/A  5.63  01/02/08  .21
 
LIFEPATH 2050  1.74745683  4.28  10.72  16.53  11.23  N/A  3.68  01/02/08  .21
 
LIFEPATH 2055  1.10793629  4.27  11.00  17.26  N/A  N/A  12.54  01/03/11  .21
 
LIFEPATH RETIREMENT  1.43777514  3.87  6.52  7.79  7.10  N/A  5.64  01/02/08  .20
 
 
 Bonds
PIMCO TOTAL RETURN  10.91000000  3.14  3.04  4.31  4.81  5.73  N/A  N/A  .71
 
VANGUARD TOTAL BOND MARKET INDEX  10.82000000  4.10  3.91  2.33  4.05  4.64  N/A  N/A  .07
 
   
 Fixed Account/Cash
 
 STABLE VALUE OPTION  2.82723817  1.60  2.14  2.46  2.86  3.80  N/A 
N/A
 
.42
 
 
 
Current Quarter Yield1
 
Previous Quarter Yield2
 
 
   2.30  2.30   
 


GGNoob

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Re: Total noob question re: deferred comp allocation
« Reply #6 on: October 06, 2014, 12:28:11 PM »
You've got some great funds available to you. I would build a 3 fund portfolio of:

VANGUARD INSTITUTIONAL INDEX
VANGUARD TOTAL INTERNATIONAL STOCK INDEX
VANGUARD TOTAL BOND MARKET INDEX

You'll just need to decide on the correct allocation for your risk tolerance. Maybe something like:

56% VANGUARD INSTITUTIONAL INDEX
24% VANGUARD TOTAL INTERNATIONAL STOCK INDEX
20% VANGUARD TOTAL BOND MARKET INDEX

That puts your stock allocation at 70% US and 30% international, then 20% of total allocation in US bonds.

dandarc

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Re: Total noob question re: deferred comp allocation
« Reply #7 on: October 06, 2014, 12:43:10 PM »
I was about to post pretty much exactly what Logan T just said.

If you want something 'easy' those target date funds aren't bad either.

Stachetastic

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Re: Total noob question re: deferred comp allocation
« Reply #8 on: October 06, 2014, 07:01:49 PM »
Thank you both for taking the time to advise! This information all seems so overwhelming at the moment, but you've given me some confidence. 

TomTX

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Re: Total noob question re: deferred comp allocation
« Reply #9 on: October 08, 2014, 11:44:48 AM »
Seems a reasonable plan with the 3 Vanguards though I personally don't bother with international. If you want more conservative,  bump the bonds up to 30%

Also, how much is the total? I generally suggest at least $50, 000 before splitting into multiple funds.