Rebalanced my 401K!

[cashstasherat23]

For the first time ever, I rebalanced my 401K! Last year, when I was just joining the workforce, I was completely overwhelmed by the 401K system, but knew that I needed to contribute to it somewhat. My dad heavily pushed for a 401K, so I just let him pick my investments, as I thought he knew much more than I did.

After being on the forum for a few months, it occurred to me that I had no idea about 401K fees, or that those were something that were even charged for having a 401K. I quickly delved deep into my 401K account, and what I found was painful! The investments I had all had fees ranging from .81% at the lowest to a high of 1.40%! I let them hang tight for a while, but finally took the plunge and rebalanced my own portfolio, and even changed it to include a still not great, but much more palatable .41% rate for a LargeCap 500, the closest thing I have to a Vanguard VSTAX.

I'm still learning about the nuances of this, but my account is now returning a solid 4% rate, and I only have one investment at a 1% fee now, instead of all of them! Excited to keep learning more, but proud of my first foray into handling my investments myself!

[rocketman48097]

Congratulations, you are moving in the right direction.  May I recommend allocating 100% to the VSTAX?

The reason is, all funds mirror the SP500 anyway, and you don't need to be diversified anymore than owning 500 stocks, so why not go all in?  I have been doing this for years and my returns have been exceptional. 

[cashstasherat23]

Congratulations, you are moving in the right direction.  May I recommend allocating 100% to the VSTAX?

The reason is, all funds mirror the SP500 anyway, and you don't need to be diversified anymore than owning 500 stocks, so why not go all in?  I have been doing this for years and my returns have been exceptional.

That's an interesting idea. It did cross my mind, but I wasn't sure if that was the best way to go as it seems quite risky. Also it's not the VSTAX specifically, but a LargeCap500 index through Principal Global Investors. However, as I am pretty young, I'd be willing to take the risk on it and hope for those big returns!

[Exflyboy]

Take another look at your 401 and find the lowest fees you can. I suspect there is a total stock market fund (thats large cap, mid cap and small cap combined) that should have very low fees indeed.

As you have 20 plus years in the the workforce you don't want to worry about risk at this point.. Heck I just retired and have 90% in Stock ETF's!!! (ok thats a bit high  but at your age you want to be 100% in stocks and keep buying the most you can through up and down markets).

if 0.41% is the best you can do then take it of course, but its a rip off... Write to your plan administrator and ask them to add a Vanguard VTSAX fund and state the fees should be 0.07%.

Good luck

[cashstasherat23]

Take another look at your 401 and find the lowest fees you can. I suspect there is a total stock market fund (thats large cap, mid cap and small cap combined) that should have very low fees indeed.

As you have 20 plus years in the the workforce you don't want to worry about risk at this point.. Heck I just retired and have 90% in Stock ETF's!!! (ok thats a bit high  but at your age you want to be 100% in stocks and keep buying the most you can through up and down markets).

if 0.41% is the best you can do then take it of course, but its a rip off... Write to your plan administrator and ask them to add a Vanguard VTSAX fund and state the fees should be 0.07%.

Good luck

20 years?! I hope not...the goal is to be out by I am 35!

Unfortunately .41% is the lowest that they have! Didn't know that you could request funds, but I certainly will look into that.