Feeling Mutual
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Avoid 20XX ret funds and portfolios, they usually have doubled up on the fees because they are funds which invest in other funds.
Check the fees, remember if a fund charges only 1%, and grows 10% per year, they are taking 10% of your growth. If the portfolio fund has a 1% fee and it invests in other funds, and the other funds have a 1% fee, that could be 20% of your growth.
I would try the large cap fund and index equity find out what index and you can follow it on the news.
A long term bond fund would be nice but all they have is an intermediate.
The small-cap and mid-cap would be considered small stock and mid stock respectively. |
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kerry77
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There's really not enough information to give you a complete answer. Your 401K should be well-diversified so that all your money isn't one asset class. If I didn't have a lot of investment knowledge, I would start by investing in a well-managed, diversified mutual fund. Without knowing the ticker symbol, I don't know for sure, but my guess is that the Large Cap Growth Equity Fund is probably a mutual fund that purchases the stock of large, publicly traded companies with a mindset for strong growth. The Large Cap Value Equity Fund probably purchases stock in companies that are a good value.
It's good that you're starting to invest now -- better to start young so your money has longer to grow! Make sure if your employer will match your contributions to a certain percentage that you are contributing at least that amount to your 401k. If you don't you're basically throwing free money away.
Good luck - hope this info helps! |
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Ricky J.
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Hi brenda. Being that you're 30 you're going to have to be agressive with your investment. First contribute 10% of your earnings. next you want to put half of that into a high risk fund and the rest into a low risk fund. Then just let it ride. |
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Jason P
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While I can't answer the question of WHAT to invest in, I hope I can help YOU decide what is best for you.
There are several important factors that go into creating an asset allocation in your 401k account.
1. Your risk tolerance (are you willing to risk it all for big returns? would you prefer to not lose anything, with the understanding that you will essentially be getting a return slightly above inflation?)
2. Time horizon (how long before you retire...you say you're 30, time horizon is about 35 years then I would estimate, this means, all else equal, you can be a bit more aggressive as you have more time to make up any losses that might occur in the next 35 years, to go after some larger returns)
3. Company match? This is a 401k specific item, and one I firmly believe in. My retirement contributions are structured as follows, I put in the maximum amount my company will match first, then contribute to a Roth IRA, then put the excess in my 401k. For example, say your match is 50% of the first 6% contributed, or 3% (fairly standard). Then I would prioritize putting 6% into the 401k, as you are receiving a 50% return right away via the company match.
As far as the choices you have they are somewhat mutually exclusive. I would group them as follows and if I owned a fund from group A, I would NOT own any funds in B or C.
Group A
Stabe Asset Return Fund
Intermediate Bond Fund
Balanced Fund
Larg-Cap Grouth Equity Fund
Larg-Cap Value Equity Fund
Index Equity Fund
Mid-Cap value Equity Fund
Small-Cap Equity Fund
International Equity Fund
Lifetime Income Retirement Date Fund
Group B
2010 Ret. Date Fund
2020 Ret Date Fund
2030 Ret. Date Fund
2040 Ret. Date Fund
Group C
Structured Portfolio-Cons
Structured Portfolio- Mod
Structured Portfolio- Aggr
Essentially, Group A allows you to customize your 401k more than B or C. If you aren't willing to research each of the funds in group A (I would estimate this amounts to about 5-10 hours of work per year), then I would suggest B or C. Choosing group B is simple, just pick the time period closest to when you will retire...if its in between, choose a blend.
Group C is similar to B, except it relies upon you to allocate the $$ based on your risk tolerance. The "Cons" portfolio is going to be mainly shorter to intermediate term bonds, and a smallish allocation to larger (i.e. less risky) stocks. ""Mod" will give you roughly a 60/40 stock/bond mix. "Aggr" is more likely an 80/20 stock/ bond, or possibly even higher stock allocation.
In summary, I can't tell you which avenue to take, it all depends on your willingness to work on it. To start, and certainly to give you time to feel more comfortable making more complicated choices, I would recommend putting 100% in the 2040 retirement fund. While the fees here are a bit higher than option A, the ability to not need to worry about it is well worth it for some people.
Best of luck to you, and congratulations on getting involved on saving for your retirement!! |
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besthusbandever
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you have a couple of hours of research here....I would do 25% large cap growth, 25% mid cap value...25% international equity and 25% small cap equity
anyting with the 2010 number are bond funds, you don't want any bond funds, just spread it out over the stock funds and let it alone and you wil be fine |
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digdowndeepnseattle
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Brenda,
Put 100% of your money in the Structured Portfolio - Mod and then do the following..
Over the next year you need to read, read, read, read...read everything you can about 401(k)'s, investing, mutual funds, and the specific funds in your plan. Set these funds up in yahoo. It will track them for you!
The Moderate Portfolio will provide you with a decent return while you educate yourself. Your retirement is important and it's something that you need to learn about so that you don't take bad advice from people. It's really not that hard to understand, just hard if you don't spend any time at it.
The other thing that will happen over the course of the year is that your balance will have grown to a level where you can reasonably begin to diversify. While the returns may be the same if you diversify now...it's psychologically difficult to expect a small balance to ever grow into something.
Keep plugging away, you'll get there! |
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Timothy G
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Lots of good answers here already. I'd just add that since the vast majority of mutual fund managers fail to outperform the S&P500 index over the long haul, investing in this index directly may be a good "core" holding for your 401K. I'd add an International Equity Fund to that for some diversification apart from the U.S.
I've read that structured products (recommended by several others) often come with high fees. I'd examine the fees and expenses carefully since over a lifetime of investing, they can really add up. Some of these products also cap your potential upside in exchange for some downside protection. If you're investing for the next 30-years or more, a down year now and then shouldn't matter. But, since market returns tend to come in spurts, foregoing a few big up years may cost you tens of thousands of potential retirement dollars. These structured products fell from favor during low interest rate times, but have recently begun to be marketed more aggressively.
One of the biggest mistakes young investors make is being too conservative. Over long periods of time, the stock market has always gone up. While there's no guarantee that will hold in the future, in general, when investing, time is your friend. |
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Mandy S
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I would suggest just doing the "Structured Portfolio - Mod"
Most people who contribute to their 401K accounts don't pay much attention to which individual funds it's being invested into.
The final three options are basically common templates. The first is for the VERY cautious investor, the second is for the moderate one, and the third is for the high gambler.
Most people fall into the second catagory.
Talk to your HR rep if you have questions. You're investing in the company, but the payoff is your retirement. You have the right to get your questions answered. |
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