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Our 401(k) Allocation
By JLP | November 20, 2006
Here’s a look at our 401(k) allocation:
18.88% Fidelity Diversifid International Fund
16.50% Fidelity Low-Priced Stock Fund
15.86% Fidelity Large Cap Stock Fund
15.85% Fidelity US Equity Index Pool (no link)
15.78% Franklin Small-Mid Cap Growth A
11.28% Company Stock
4.24% Fidelity Equity Income II Fund
1.62% Fidelity Small Cap Stock Fund
Here’s a handy dandy little pie chart:
We just started contributing to the Fidelity Equity Income II Fund and the Fidelity Small Cap Stock Fund. Also, we can no longer add to our company stock portion so that percentage will drop over the years (unless the stock does REALLY well).
Finally, here’s a breakdown based on asset class:
71.50% Domestic Equities
24.03% International Equities
0.07% Bonds
3.97% Short-Term
0.43% Other
I’m not quite sure why we have so much in short-term. It is most likely the short-term positions inside the mutual funds. As you can see, I’m not a fan of bonds. For building wealth over the LONG RUN, bonds just won’t cut it for me. I’m not saying bonds aren’t a good choice for some people, but I would rather have equities.
Topics: 401(k), Investing, Retirement Planning | 11 Comments »
November 20th, 2006 at 12:22 pm
I’m all over the place with mine, but here’s how it pans out:
AMER CENT STRAT AGGR ADV FUND 5.00%
AMER CENT REAL ESTATE ADV FUND 7.00%
ALGER MID CAP GROWTH INST FUND 3.00%
BLACKROCK AURORA PORTFOLIO 10.00%
AMER FUNDS WASH MUT INV FUND 3.00%
AMER FUNDS EUROPACIF GRTH FUND 18.00%
AMER FUNDS GROWTH FUND OF AMER 5.00%
CALVERT INCOME FUND 3.00%
OPPENHEIMER INTL BOND FUND 7.00%
DAVIS OPPORTUNITY FUND 1.00%
J P MORGAN MID-CAP VALUE FUND 4.00%
MET SERIES STOCK INDEX PORT II 25.00%
OPPEN DEVELOPING MARKETS FUND 8.00%
BLACKROCK HEALTH SCI OPP PORT 1.00%
Total 100%
November 20th, 2006 at 1:58 pm
I have all of mine in an S&P 500 index fund. I know it isn’t a “balanced allocation”, but the rest of my portfolio balances it out – and the other funds in my 401K have high fees.
November 20th, 2006 at 3:23 pm
Why not just stay with the Index Funds? Don’t they usually outproduce these other ones over the long haul?
I’m about 80% S&P 500 index. The other 20% is to play with
- Bryan
http://www.BryanCFleming.com
November 20th, 2006 at 3:45 pm
I’m sort of playing with mine too. I only put 4% of my salary in it because that’s all I get a match on.
November 20th, 2006 at 6:55 pm
You are overweighted domestic for my taste. It’s a big world. Also, what is the particular benefit of a fund based on the price of an individual share? Surely market cap is the more relevant criterion. If there is some theory that the share price correlates with return, I would love to learn more about it.
November 20th, 2006 at 7:04 pm
I should say correlates with return or has a diversifying benefit. But the biggest company in the world and the smallest company in the world could both have a $20 stock price or a $485 stock price. It all depends on how many shares are outstanding. I have never heard of a benefit to owning stocks “priced at or below $35 per share”.
November 20th, 2006 at 7:08 pm
Rob,
I don’t know but the fund has performed wonderfully for us. In fact, it is one of the best-performing funds in the group.
I’m actually putting a higher percentage in international and the allocation should look a lot different in another year.
November 20th, 2006 at 7:08 pm
50% in the Morgan Stanley Capital International Index
50% in the Dow Jones Wilshire 4500 Index
Over the past 12 months, on the International fund I have a 27.5% return and on the small cap fund I have a 16.9% 12 month return.
Why people invest in actively managed funds is beyond me… I pay five basis points in fees!
Since I am 25, I have everything in high beta funds for the long term, but I am looking wearily at the inverted yield curve and the possibility of a recession.
November 20th, 2006 at 8:01 pm
Does your 401(k) offer index funds?
November 20th, 2006 at 8:57 pm
At one point in time I tried real hard to come up with a “good” asset allocation and follow through with keeping it balanced properly.
But ultimately I realized that my arbitrary allocation was not derived from any rigorous analysis, it was just what made intuitive sense to me. When I’d rebalance, which was every 6 months if I remembered, or every couple years if I didn’t, I’d usually have forgotten why I picked that particular allocation in the first place.
That’s when I decided to let the allocation gurus at Vanguard do the hard work for me, and dumped pretty much everything in Target Retirement funds.
I do wish that they offered different TR funds for tax deferred accounts versus taxable accounts — I’d expect the optimal asset mix and selection to vary pretty considerably for those two categories.
November 21st, 2006 at 3:21 am
I love those Target Retirement funds. I also love the idea of playing with those REITs and energy funds…