401k Portfolio update and savings! ETC!!!

[Mistawho]

Info about me - Currently 25 and been contributing into 401k since 22.

Soo after doing research I have changed my portfolio for my 401k. Here it is

Vanguard Wellington Index Fund - VWELX - 45%
Vanguard Lifestragedy Growth - VASGX - 55%

Currently contributing 15% of my paycheck into 401k. Also recently started a ROTH IRA with T Rowe Price. Contributing $100.00 dollars a month to Target Retirement Fund 2040.

Savings account with ING Direct. Only putting 40 dollars a month into that. Trying to have a 8 - 12month emergency fund. haha.

I might lower my 401k contribution just enough to get the full company match and "try" to max out my roth.

[jIM_Ohio]

is there a question?

[Mistawho]

is there a question?

No, just giving everyone my status. Any suggestions would be greatly appreciated. hehe

[jIM_Ohio]

depends on account values relative to ages and goals.

Wellington is 40-60 stock bonds, correct? For a person retiring in 30+ years, that's a lot of bonds.

[Broken Arrow]

Hmm... Morningstar's X-ray shows that, relative to the entire portfolio, bonds are at 19.2%. However, for a 25 year old, I agree that's still a lot of bonds....

On the other hand, I have to applaud Mistawho for being so proactive in growing his nest eggs.

[jIM_Ohio]

I mixed wellington up with a different fund then... I was thining of wellesley.

[anonymous_saver]

At our age (I'm also 25) I would not have my money in bonds at all. Here is one example of what I think would be a good idea, there are of course others:

45% Domestic Large Cap Index
15% Domestic Mid Cap Index
15% Domestic Small Cap Index
25% International/Global Index

Why did you choose these funds originally? Do you have any other retirement accounts? These should also be considered in your asset allocation. Maybe you should list your options here that you can choose from for your 401(k) and we could help you out a bit (please include the tickers).

[jIM_Ohio]

At our age (I'm also 25) I would not have my money in bonds at all. Here is one example of what I think would be a good idea, there are of course others:

45% Domestic Large Cap Index
15% Domestic Mid Cap Index
15% Domestic Small Cap Index
25% International/Global Index

Why did you choose these funds originally? Do you have any other retirement accounts? These should also be considered in your asset allocation. Maybe you should list your options here that you can choose from for your 401(k) and we could help you out a bit (please include the tickers).

That allocation looks very similar to mine. I think this allocation is broad enough to apply to many people in their 20's and 30's, assuming they understand risks of being 100% in equities.

[anonymous_saver]

Yeah, I'm still personally debating my allocation myself. Right now I have it as 75% Total Stock Market Index and 25% Total International Stock Market Index while I figure things out. I think the %'s that I stated in the above post will be something similar to what I choose.

I'm pretty sure which funds I will be choosing for the Domestic part of the equation: I'm thinking of probably getting the 500 Index (VFINX), the Mid Cap Index (VIMSX), and the Small Cap Index (NAESX). I think this will be better than going with the Total Stock Market Index (VTSMX) since I can get slightly better returns in the end. Any thoughts? REIT Index? Any other?

For the International Index, I am either going to keep the Total International Stock Index (VGTSX) or switch to Vanguard FTSE All-World ex-US Index Fund (VFWIX).

Any opinions? Particularly with my %'s?

Ahhhh I could talk about this stuff all day long.

[jIM_Ohio]

Yeah, I'm still personally debating my allocation myself. Right now I have it as 75% Total Stock Market Index and 25% Total International Stock Market Index while I figure things out. I think the %'s that I stated in the above post will be something similar to what I choose.

I'm pretty sure which funds I will be choosing for the Domestic part of the equation: I'm thinking of probably getting the 500 Index (VFINX), the Mid Cap Index (VIMSX), and the Small Cap Index (NAESX). I think this will be better than going with the Total Stock Market Index (VTSMX) since I can get slightly better returns in the end. Any thoughts? REIT Index? Any other?

For the International Index, I am either going to keep the Total International Stock Index (VGTSX) or switch to Vanguard FTSE All-World ex-US Index Fund (VFWIX).

Any opinions? Particularly with my %'s?

Ahhhh I could talk about this stuff all day long.

The percentages are the same I use- literally for large-mid-small and international.

My suggestion would be to break up the international into large cap and emerging markets, or large cap and small cap international. If the international index covers both, never mind.

I think the total stock market is weighted at less than 30% small/mid cap... it's more like 10% or 15% small and mid combined, and this break down puts a 40% domestic position on mid and small (45:30= 3:2 ratio between large and mid/small caps).

If it gets more volatile than you like, add in commodities, bonds and REITs.

VTMSX style boxes

24 24 24

6 6 7

3 3 3

19% mid cap
9% small cap

28% small/mid; 72% equity 3:1 ratio of large to not large.

[Mistawho]

I was actually thinking about having this portfolio.

Vanguard Wellington(balance) - VWELX - 25%
Vanguard PrimeCAP (large growth) - VPMCX - 50%
Vanguard Emerging MKT (international) - VEIEX - 10%
Baron Growth Fund (small cap) - BGRFX - 15%

This portfolio in Morningstar Xray.

Cash %2.65
U.S. Stocks %68.86
Foreign Stocks %20.53
Bonds %7.74
Other %0.23

Valuation :

15 21 37
3 6 10
1 3 3

Interest Rate sensitivity :

0 100 0
0 0 0
0 0 0

What do you guys think?? I like it!

[jIM_Ohio]

I was actually thinking about having this portfolio.

Vanguard Wellington(balance) - VWELX - 25%
Vanguard PrimeCAP (large growth) - VPMCX - 50%
Vanguard Emerging MKT (international) - VEIEX - 10%
Baron Growth Fund (small cap) - BGRFX - 15%

This portfolio in Morningstar Xray.

Cash %2.65
U.S. Stocks %68.86
Foreign Stocks %20.53
Bonds %7.74
Other %0.23

Valuation :

15 21 37
3 6 10
1 3 3

Interest Rate sensitivity :

0 100 0
0 0 0
0 0 0

What do you guys think?? I like it!

You are missing foreign large cap in established countries. This might give some good short term returns with emerging markets, but the ride down might be less fun than the ride up.

roller coaster ride for sure.

[anonymous_saver]

Are there Index fund options in your plan?

[Mistawho]

You are missing foreign large cap in established countries. This might give some good short term returns with emerging markets, but the ride down might be less fun than the ride up.

roller coaster ride for sure.

How about this... remember i'm 25 years old. Probably won't update portfolio for along time! hehe.

Vanguard Primecap (Large Growth) - VPMCX - 45%
Vanguard Wellington (moderate allocation) - VWELX - 20%
Baron Growth Fund (small growth) - BGRFX - 15%
Vanguard International (foreign large blend) - VWIGX - 10%
Vanguard Emerging MK (Diversified emerging markets foreign) - VEIEX - 10%

Asset Allocation :

Cash %2.78
U.S. Stocks %62.03
Foreign Stocks %28.44
Bonds %6.21
Other %0.54

Valuation :

15 - 22 - 37
3 - 6 - 10
1 - 3 - 3

[jIM_Ohio]

How about this... remember i'm 25 years old. Probably won't update portfolio for along time! hehe.

Vanguard Primecap (Large Growth) - VPMCX - 45%
Vanguard Wellington (moderate allocation) - VWELX - 20%
Baron Growth Fund (small growth) - BGRFX - 15%
Vanguard International (foreign large blend) - VWIGX - 10%
Vanguard Emerging MK (Diversified emerging markets foreign) - VEIEX - 10%

Asset Allocation :

Cash %2.78
U.S. Stocks %62.03
Foreign Stocks %28.44
Bonds %6.21
Other %0.54

Valuation :

15 - 22 - 37
3 - 6 - 10
1 - 3 - 3

much better
you are overweight on large cap growth... so is total US market anyway...

Top row is 74% large cap
middle row is 19% mid cap
bottom row is 7% small cap

I might try to move 10% off top to middle and small. 20% even... if this was me. ( I want at least 15% each to mid and small caps). One issue is the moderate allocation fund has overlap with primecap (check the holdings in prospectus).

International side at 20% is solid.
My wife used to own that Baron Growth fund in her 401k, it is a solid fund too.
You have a good selection, how you slice and dice will change returns around 1-2% over time. Not a huge issue, but keep asking if you want more comments.