Help with 401k allocating

[Trigga]

Hello im 37 years old just opened a 401k plan with my employer . I have no other stocks/bonds or funds. I have the list of the stocks in my 401k that i can invest in not sure if people on this site even replys to this type of post but im gonna give it a try . The following is the list places to invest in .

Alger Capital Appreciation A		ACAAX	$22.01
American Funds Amcap R3		RAFCX	$27.69
American Funds Balanced R3		RLBCX	$24.71
American Funds Capital World Growth & Income R3		RWICX	$46.82
American Funds Fundamental Investors R3		RFNCX	$52.84
American Funds Growth Fund Of America R3		RGACX	$44.71
American Funds Investment Company Of America R3		RICCX	$37.17
American Funds New Perspective R3		RNPCX	$37.91
Blackrock Equity Dividend A		MDDVX	$24.82
Blackrock Global Allocation A		MDLOX	$20.13
Blackrock Global Small Cap A		MDGCX	$24.51
Blackrock Money Market Inv		PINXX	$1.00
Blackrock Pacific A		MDPCX	$17.41
Eaton Vance Floating Rate Advantage A		EAFAX	$10.73
Goldman Sachs Small Cap Value A		GSSMX	$52.30
Invesco Van Kampen Comstock A		ACSTX	$25.26
Ivy Asset Strategy A		WASAX	$24.90
Jp Morgan Government Bond A		OGGAX	$10.90
Jp Morgan U S Equity A		JUEAX	$14.89
Loomis Sayles Investment Grade Bond A		LIGRX	$11.29
Mfs New Discovery R3		MNDHX	$24.82
Mfs Research International R3		MRSHX	$17.15
Oppenheimer Developing Market A		ODMAX	$32.42
Oppenheimer International Growth A		OIGAX	$37.70
Perkins Mid Cap Value A		JDPAX	$20.21
Pimco All Asset All Authority A		PAUAX	$8.63
Pimco Real Estate Real Return Strategy D		PETDX	$7.21
Pimco Real Return A		PRTNX	$10.81
Pioneer Strategic Income A		PSRAX	$10.54
Prudential Jennison Natural Resources A		PGNAX	$33.45
Prudential Mid-Cap Value A		SPRAX	$20.97
T. Rowe Price Retirement 2025 R		RRTNX	$15.95
T. Rowe Price Retirement 2030 R		RRTCX	$23.42
T. Rowe Price Retirement 2035 R		RRTPX	$17.04
T. Rowe Price Retirement 2040 R		RRTDX	$24.54
T. Rowe Price Retirement 2045 R		RRTRX	$16.40
T. Rowe Price Retirement 2050 R		RRTFX	$13.73
Thornburg Limited Term Income R3		THIRX	$13.34
Vanguard Dividend Growth Inv		VDIGX	$23.10
Wells Fargo Advantage Asset Allocation A		EAAFX	$13.60

Thanks !

[Anonymous]

I think there are better places to ask on the Internet but if you do (same reason why I don't think its wise to ask online) even if you have nothing other than this 401k you're about to invest in you would have to give more personal info as well let us know what your goals are, risk comfort, what you have in savings, your martial status, any debts (eg mortgage or student loans or medical bills) etc

Before we can even begin to try and make suitable recommendations

Your work place should have resources for you--for instance if you don't work in an investment company or big bank they most likely use a company like fidelity to service their 401k. Your company pays them a good chunk of money to hold and service it; probably would also allow you to speak to a financial adviser there for free since 401ks at current employer isn't rolloverable

[youdontkillmoney]

All investing starts with the person, I like to look at (2) your age because the younger you are from retirement the more time you have to grow and recoup any losses as well as swings in the markets and (2) your risk tolerance, because if you invest in something high risk and you don't like it, you will reallocate and vice versa, in something low risk, it may be too slow/stable for you, so you'll reallocate again.

Take me, I am 41, I have time to ride out market fluctuations and can handle the risk because I don't need access to the retirement money and understand volatitlity. So I allocate as follows: 30% large cap funds, 20% mid cap funds, and the remaining 50% in 10% increments, in international funds and small cap funds. The international and small cap funds are considered riskier. 

[kuku4koco]

Anything with Vanguard is probably a safe bet... (they are about the most honest company out there and won't kill you in fees!!)  Whoever you have assist you, make sure they are a Fiduciary, that means they will have your best interest at hand and not their own, unlike a 'broker' or 'financial advisor'.  Definitely do your research on the companies, don't just go by what someone tells you about them (including me!).  If you're young, you're on the right track to invest... most people don't think to, until it's too late.  Best Wishes!

[tacpoly]

Make sure you look at the total FEES charged by each fund.  Most people focus on large/mid/small cap and risk, but one of the biggest damage to savings are the fees charged by the funds.  There is absolutely no reason why you should be paying more than 1% (and it really should be much lower). 

[Anonymous]

I have worked for a 401(k) provider for seven years. Ask your employer if a financial advisor is attached to your plan. Many plans have them. If yours does, this person is being compensated either from the trails that the investment companies pay out or another means. Make them earn their pay.

[youdontkillmoney]

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@youdontkillmoney wrote:

All investing starts with the person, I like to look at (2) your age because the younger you are from retirement the more time you have to grow and recoup any losses as well as swings in the markets and (2) your risk tolerance, because if you invest in something high risk and you don't like it, you will reallocate and vice versa, in something low risk, it may be too slow/stable for you, so you'll reallocate again.

Take me, I am 41, I have time to ride out market fluctuations and can handle the risk because I don't need access to the retirement money and understand volatitlity. So I allocate as follows: 30% large cap funds, 20% mid cap funds, and the remaining 50% in 10% increments, in international funds and small cap funds. The international and small cap funds are considered riskier. 

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^^^^^^^^

Take yesterday's market drop of 530 points, am I panicking, no. I'm not retiring until 20 years out, so I'll ride it out. In my personal stock account, sure I'm donw, but I got good quality companies, am I panicking no, because I am not on margin (borrowing from brokerage), but using my own cash so no pressure to sell when down. So you have to know yourself, your ability to handle risk in these instances.

[youdontkillmoney]

Take today's 1,000 , yes, 1,000 point Dow drop in the stock market, ... you have to know yourself as investing starts with You, are you okay with the fluctuations, do you need the invested funds right away, or wil you need it in 20 years and you believe America's best years are ahead ... then even with wild fluctuations, leave it in there....wait. If you are not confortable with it, invest in CD's you will still get your principal and interest. They have 1 month, 6 month, 1 year, 5 years CDs etc

Given the stock amrket nowadays, you'd also do better keeping the money under the mattress or bank in the short run.

[Open123]

For 401Ks, you should gear the choices toward growth.  With a long term horizon (20 years), don't worry about volatility (drops).

I recommend the following:

1. S&P 500 Index - best option, if your plan offers it.

2. If not, then chose 30% LC Growth, 30% LC Value, 20% Small/Midcap Gwth, and 20% Int'l (Europe - Spain, Italy and Germany, if allowed to sector diversify).

3. Choose the funds with the lowest costs.

That's it.  Maximize it with equal montly contributions to maximize the matching.  Sit back, wait 20 years, and watch it balloon.

Good luck!

[Open123]

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@youdontkillmoney wrote:

Given the stock amrket nowadays, you'd also do better keeping the money under the mattress or bank in the short run.

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Right, good to have some cash in the short run.  

However, barring an unforeseen systemic weakness in the US, it'll be a pretty good time to buy certain stocks in a few weeks.  No one can predict short term bottoms or tops, but one should always sell some into strength, and do some buying on weakness.  If we fall big from China again next week, I'd start using some cash to begin buying certain stocks with limited currency risk, global exposure, and reasonable valuation metrics.  Or, if you're more aggressive, take a look at the semis that were sold off from fears slowing iPhone growth in China.

If the market recovers (no one really knows), it'll be in late Sept/Oct.