First Time Investor: 401K @ 23 Years Old

**Petunia 100** · 11-26-2012, 12:08 PM

Great-West is a life insurance company, correct? That fact coupled with their "re-packaging" of other retail mutual funds screams "variable annuity" to me. If so, that is bad news for you. Packaging investments this way adds an additional layer of fees which you must pay.

Do you have ticker symbols for the investment choices in your plan?

**Petunia 100** · 11-26-2012, 12:45 PM

Originally posted by RonnieBurgundy View Post

Hello all,

And Currently, I am invested in the following:

80% - Great-West Aggressive Profile II Fund I
10% - Great-West Moderate Profile II Fund I
10% - Oppenheimer Developing Markets A

Just wondering if I should have this more spread out? If so, is there a recommendation for how exactly I should lay it out?

I appreciate any and all help on the issue.

Those first two funds are each intended to be complete portfolios. So, by owning more than one you aren't adding any diversification, but you are somewhat decreasing the risk of the aggressive portfolio by mixing it with the moderate portfolio.

The emerging markets fund may or may not be necessary, depending on what the other two portfolios hold. Or perhaps you are overweighting them on purpose? At your age, that is not an unreasonable thing to do.

There are a lot of differing opinions as to what is the "best" asset allocation plan. The truth is that pretty much any reasonable plan will serve you well if you invest regularly, re-balance, and avoid trying to time the market. You also want to pay close attention to costs, as they reduce your return.

You want to hold at minimum US stocks, foreign stocks, and US bonds. You want to be broadly diversified. Your Great-West portfolios accomplish both of these. You may wish to also hold REITS, Tips, and precious metals. Some like to "tilt" to value, or small value. Some like to overweight emerging markets (such as you are doing now).

So in short, I think your asset allocation plan is fine as is unless there are more attractively priced choices available in your 401k plan (reason for the question about ticker symbols).

And remember, you also have the option of opening your own IRA with the custodian of your choice.

**MakeAStash** · 11-26-2012, 12:54 PM

Predicting which fund will perform best is basically impossible, so simply save and diversify. Sounds like you are already doing that. You can also monitor expense ratios of the various options, and favor the lower cost ones. The higher the expense ratio, the more the fund operators are skimming off the top. Just a 0.5% difference in expense ratio over decades can add up to tens of thousands of dollars in the typical 401k.

First Time Investor: 401K @ 23 Years Old