Should I adjust my 401k investment balances?

[mark_1]

Earlier this year I asked for advice on choosing my 401k Fidelity investments. With that advice I made election changes. The following are my investment with cash balances:

Investments NAV 1-Day Chg ($) Balance
FID DIVERSIFD INTL $27.61 -$0.80 $12,132.22
PIMCO TOT RETURN ADM $11.14 $0.01 $468.38
ROYCE VALUE PLUS SER $13.16 -$0.33 $598.49
SPTN TOT MKT IDX ADV $38.85 -$0.64 $73,339.75

I am wondering...

1. Should I spread the cash more equally between investments?
2. Should I consider different investment elections?

I am early 32.

[LMA]

Earlier this year I asked for advice on choosing my 401k Fidelity investments. With that advice I made election changes. The following are my investment with cash balances:

Investments NAV 1-Day Chg ($) Balance
FID DIVERSIFD INTL $27.61 -$0.80 $12,132.22
PIMCO TOT RETURN ADM $11.14 $0.01 $468.38
ROYCE VALUE PLUS SER $13.16 -$0.33 $598.49
SPTN TOT MKT IDX ADV $38.85 -$0.64 $73,339.75

I am wondering...

1. Should I spread the cash more equally between investments?
2. Should I consider different investment elections?

I am early 32.

I would not say to spread it "more evenly" because these are all very different funds. However it looks to me like you have too much in the US stock market and not enough international. If the Royce fund is about value companies in the US I would certainly take away from the Spartan and bump that one up. I would also raise the international fund. Personally I have about 30% of my totatl investments in international.

I also have about 15% in bonds which I assum is what the Pimco fund is. So yes you do need to spread some money around away from the Spartan but not equally. The percentages would depend in part on your age, risk tolerance and goals.

I don't think you need to change your investment choices. Looks like a simple but adequate diversification.

[LMA]

Oops I missed your age

I would then suggest something like 40% Spartan, 30% International, 10% Pimco and 20% Royce. IMHO...

[jpg7n16]

Earlier this year I asked for advice on choosing my 401k Fidelity investments. With that advice I made election changes. The following are my investment with cash balances:

Investments NAV 1-Day Chg ($) Balance
FID DIVERSIFD INTL $27.61 -$0.80 $12,132.22
PIMCO TOT RETURN ADM $11.14 $0.01 $468.38
ROYCE VALUE PLUS SER $13.16 -$0.33 $598.49
SPTN TOT MKT IDX ADV $38.85 -$0.64 $73,339.75

I am wondering...

1. Should I spread the cash more equally between investments?
2. Should I consider different investment elections?

I am early 32.

Well I found your other post here: http://www.savingadvice.com/forums/p...-guidance.html

And it doesn't really look like you ever made any changes. Or if you did, something went drastically wrong You have less than 1% in 2 funds - which serves no purpose really -

What exactly is your plan for managing the account?
What happened? Did you not have the time to make the changes from your other thread?
How often do you plan on keeping up with it going forward?


You mentioned the Freedom fund in the other post. What do you know about target date type funds?

You even mentioned that you know you need to start more aggressively and get more conservative as you near retirement. Are you aware that target funds do exactly that?

You also mentioned that you wanted your investment spread into more funds - do you know what funds make up the Freedom fund you were looking at? Target date funds are usually a fund-of-funds of sorts, meaning that they are made up of a variety of other mutual funds. See for yourself:

Fidelity Freedom 2040 Fund (FFFFX)

Hello -

I'm looking for advice on selecting my Fidelity 401k elections. I'm currently 32 and have approximately $77k in my 401k. I currently contribute 10% of my salary to my 401k. It seems the easy option is to put 100% of this contribution toward "Fidelity Freedom 2040," but I feel I will benefit more by splitting my contribution into other funds in addition too. At my age, I know I should have higher risk funds and then as I get older switch to less risky funds. Currently, 25% of my contribution goes toward the Fidelity Freedom 2040, then the rest is in Large Cap. I am hoping someone can provide some guidance as to what funds to select as I am somewhat clueless in this area.

A target date fund may be just what you need...

[mark_1]

I actually did make the change in selecting the 4 funds that I do have now. I do not remember the funds I had prior to my current, but they were different. After the change, I did not balance or spread my cash across these investments. Hence, the reason for this post.

I understand the point of Freedom Funds, (starts aggressive then becomes more conservative) but was guided away from the fund with the understanding that there is more potential for earnings when choosing specific funds. Clearly, I am a novice and looking for assistance and to better understand.

I would anticipate to make fund changes once or twice a year.

If I did choose to go the Freedom Fund route. Would it be wise to move all of my money into this fund or leave it in the existing funds and only contribute to freedom fund?

[mark_1]

If I did choose to go the Freedom Fund route. Would it be wise to move all of my money into this fund or leave it in the existing funds and only contribute to freedom fund?

[jpg7n16]

I actually did make the change in selecting the 4 funds that I do have now. I do not remember the funds I had prior to my current, but they were different. After the change, I did not balance or spread my cash across these investments. Hence, the reason for this post.

Then something went wrong.

Here was the advice:

I'm glad to see you started a new thread, Mark. I don't know what is up with the error on your first thread.

IMO, you should either be 100% in Fidelity Freedom 2040 or 0%. Being 75% in a large cap fund and 25% in FF 2040 throws your allocations out of whack. I see you have Spartan Total Market Index in your line-up, I would be making use of that. It doesn't get much better than a total market index fund at a rock-bottom cost.

I suggest something along the lines of:

40% Spartan Total Market Index
10% Royce Sm Value
25% Fid Diversified Intl
25% Pimco Total Return

Here is what you have:

84.7% Spartan Total Market Index
0.7% Royce Sm Value
14% Fid Diversified Intl
0.5% Pimco Total Return

What happened there?

I understand the point of Freedom Funds, (starts aggressive then becomes more conservative) but was guided away from the fund with the understanding that there is more potential for earnings when choosing specific funds. Clearly, I am a novice and looking for assistance and to better understand.

Why do you feel that way?

The highest POTENTIAL returns are in super risky investments (options can triple in value in a day - or lose 75% in a day, etc.). The more risk you take, the higher your potential returns and the higher your potential losses. Are you really only looking for the highest potential returns?

I would anticipate to make fund changes once or twice a year.

If I did choose to go the Freedom Fund route. Would it be wise to move all of my money into this fund or leave it in the existing funds and only contribute to freedom fund?

I'd recommend moving as much as you don't want to have to manage and watch.

If you want to manage and watch the whole thing, select your own funds, and do all the rebalancing yourself - then don't do any to the Freedom fund.

But if you don't want to have to worry about managing, rebalancing the account, etc. - then do 100% (all current money and all new money).

[mark_1]

I switched to the below funds a couple months ago. So all my contributions from that point forward are now split at these percentage rates:

40% Spartan Total Market Index
10% Royce Sm Value
25% Fid Diversified Intl
25% Pimco Total Return

Existing money was not rebalanced across the above funds...that is what I will do now. Or, I will dump it all into a freedom fund 2040.

I had also read that there are more fee's in a Freedom Fund. It is better to imitate one and re-balance yearly?

[jpg7n16]

Existing money was not rebalanced across the above funds...that is what I will do now. Or, I will dump it all into a freedom fund 2040.

You don't have to do a Freedom Fund. I'm just trying to help you understand what it is to see if that's what you'd want. Based on what you said before, it sounded like a good idea for you.

I would def recommend some sort of rebalancing of your current portfolio, not just future contributions.

I had also read that there are more fee's in a Freedom Fund.

I hear that a lot, but never with evidence to back it up. Target date funds (at least the main ones: Fidelity and Vanguard) do not have additional fees. They just pass through the fees of the underlying funds.

Where did you read that?

In fact, we just discussed this in another thread:

http://www.savingadvice.com/forums/investing-banking/64720-couple-questions-dollar-cost-averaging.html#post319389

It is better to imitate one and re-balance yearly?

Either you want to manage it, or you don't.

If you do, then choose your own funds. You have more control over the risk profile, but all the maintenance, fund selection, and rebalancing is up to you. If that's what you want, then great - build your own.

If you want it to be super easy and let the fund managers do all that for you, go with the Freedom Fund.


I can't really tell you how you want to manage your account That's up to you