What's your 401k asset allocation?

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mentos

mentos

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I figured I would make a new topic since the investment thread is full of politics and arguing.

What's the asset allocation in your 401k? I had everything in a target date fund but the expense ratio is quite high at 0.65%.

I was thinking of putting everything into an S&P 500 index fund. Is that diversified enough or should I add small cap index and international index too? What about bonds? What percentage of each do you recommend?
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mentos said:
I figured I would make a new topic since the investment thread is full of politics and arguing.

What's the asset allocation in your 401k? I had everything in a target date fund but the expense ratio is quite high at 0.65%.

I was thinking of putting everything into an S&P 500 index fund. Is that diversified enough or should I add small cap index and international index too? What about bonds? What percentage of each do you recommend?
Click to expand...

S&P 500 + a “completion fund” aka “extended market” fund in an 80%/20% ratio, unless you can just put it in a total market fund which obviated the need for the split.

So I do this (approx):
65% US stock market (total market)
10% developed international
5% emerging market international
10% real estate (split US and ex-US)
10% small cap (I tilt to small cap)

I’m 100% stock, I’ll probably dial back when in my 40s (or maybe in the next year or so), but I’m an aggressive investor.

I keep about $10k in my “reckless investment fund” and most of my trades are options in there.


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Momus said:
All in Vanguard
32% small cap
32% S&P 500
36% international
Click to expand...

You’re missing mid caps, and my gut says you’re overloaded on international (unless that was intentional).


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100% stock with a 70/30 US/INTL. The details beyond that don't matter much. Though I do hold a lot of cash for some expected future expenses.
 
confettiflyer said:
You’re missing mid caps, and my gut says you’re overloaded on international (unless that was intentional).


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Click to expand...

My 401k has no option to invest in VTSAX. But, this is the graph for S&P 500 vs. VTSAX (Total stock market with mid caps included).

Untitled.png


This is Vanguard Target Date 2065. Anywhere between 10-40% international is not too much. It's reasonable. International already includes emerging markets. If anything I will bet my money the next decade international stocks will outperform domestic.

Untitled2.png


Yes, I heavily tilt to small caps.
 
36% large cap
38% international
12% mid cap
12% small cap
2% bonds

My expense ratios average out to 0.3%.

I recommend everyone to try out a service called Blooom. They can analyze your 401k portfolio and help you rebalance it based on potential growth and fees. The analysis is free.

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Wow I didn't realize people had so much in international.
 
I do 60% large company stock index, 20% small/mid company stock index and 20% international stock index.

I don't like target date funds because they usually have a high proportion of international stocks which have lagged the U.S. for years. Vanguard does 60% U.S. to 40% international. They also usually have 10-20% in bonds right from the beginning which I don't feel is necessary when you are actively contributing every 2 weeks and have no intentions to make withdrawals for a few decades, so you don't need the stability (but low returns) of bonds.
 
35% large, 25% mid, 20% small, 20% international. I have been buying emerging market lately.
 
Momus said:
My 401k has no option to invest in VTSAX. But, this is the graph for S&P 500 vs. VTSAX

Yes, I heavily tilt to small caps.
Click to expand...

And that’s fair, the differences aren’t significant, just checking ️

If I only did S&P500 and small cap, I’d feel funny omitting mid caps.


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It's return of capital rather on capital at this point. If you have a company match you are already making money. Any thing else is gravy don't get greedy. It's a casino not investing.
 
Did everyone learn all this retirement/investment info from googling or youtube? I'll admit I don't know too much about this kind of stuff and want to get in on it but not sure where to really start... if someone could link me a newbie guide that would be great. TIA!

EDIT: Happy 100th post!! :clap:
 
MilknCheerios said:
Did everyone learn all this retirement/investment info from googling or youtube? I'll admit I don't know too much about this kind of stuff and want to get in on it but not sure where to really start... if someone could link me a newbie guide that would be great. TIA!

EDIT: Happy 100th post!! :clap:
Click to expand...

I’m going to get flak for this, but I admit my very VERY first lessons in finance and investing came from Suze Orman back in the 00’s.

Her books are quite decent for beginners and easy to read, and I agree with a lot of her general advice.

I got more advanced reading a combination of WSJ, White Coat Investor (blog/site), Bogleheads (online forum), Money Magazine (RIP, but I think the website still exists), and Ramit Sethi (author of I Will Teach You To Be Rich, also blog/website).


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Pharmacy is a Scam said:
Not related to my 401k but I roll the dice on pharma stocks. Go big or go home baby...
Click to expand...

I’ve got options on NK and SRNE, XLRN broke my heart when it zoomed before I could buy anything. 🙁


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confettiflyer said:
I’m going to get flak for this, but I admit my very VERY first lessons in finance and investing came from Suze Orman back in the 00’s.

Her books are quite decent for beginners and easy to read, and I agree with a lot of her general advice.

I got more advanced reading a combination of WSJ, White Coat Investor (blog/site), Bogleheads (online forum), Money Magazine (RIP, but I think the website still exists), and Ramit Sethi (author of I Will Teach You To Be Rich, also blog/website).


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Click to expand...

It's like we're the same people.
I had all of Suze Orman's books in college. Did you watch her show? I loved the "Can I Afford It?" segment.
Then of course moved on to Bogleheads post college. Although that forum is sometimes a bit "out there".
 
MilknCheerios said:
Did everyone learn all this retirement/investment info from googling or youtube? I'll admit I don't know too much about this kind of stuff and want to get in on it but not sure where to really start... if someone could link me a newbie guide that would be great. TIA!

EDIT: Happy 100th post!! :clap:
Click to expand...

"The Millionaire Next Door" was my first introduction to personal finance. It may be dated now but still a good quick read. "The Bogleheads Guide to Investing" is good too. Their forum is great although they are focused long term and lean towards bonds much more than anyone here.

Also in this forum search for BMBiology's guide to building wealth, and anything written by pezdispenser.
 
This is how I rebalanced my CVS 401k, what do you guys think?

30% Core equity (large caps)
20% Mid cap index
20% Small cap index
15% International emerging markets index
15% International equity index

My current 401k is 100% S&P 500 cause the other choices suck. I'll use my Roth to balance out small caps, mid caps and international.
 
No bond funds at all as a hedge for some of you? If anything it gives you some "cash" to sweep into another position when its a good time to buy.
 
Hibiclens said:
No bond funds at all as a hedge for some of you? If anything it gives you some "cash" to sweep into another position when its a good time to buy.
Click to expand...

I think most of us have cash on the sidelines anyway.
 
I been 100% in nontaxable bonds. I am looking for high paying taxable bonds now to invest in. Any ideas?
 
Just remember...if you have a boatload of stocks in your 401 k, you will be paying a lot of taxes when you start to cash out. Social security also counts as taxable income.
 
vanguard target date retirement funds - extremely simply, pick a date you want to retire - and set it and forget it (for those Ron Popeil fans). You pay a slightly higher fee - like 0.01% - but the time it saves me is worth it.
 
Dred Pirate said:
vanguard target date retirement funds - extremely simply, pick a date you want to retire - and set it and forget it (for those Ron Popeil fans). You pay a slightly higher fee - like 0.01% - but the time it saves me is worth it.
Click to expand...

I find that they’re too conservative for my own tastes. The 2065 fund is 10% bonds...I dunno about you, but if I had 45 years until retirement, I’d be at 100% equities.

But if someone is reading this thread and going cross eyed, yes...it’s a good option.


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confettiflyer said:
I find that they’re too conservative for my own tastes. The 2065 fund is 10% bonds...I dunno about you, but if I had 45 years until retirement, I’d be at 100% equities.

But if someone is reading this thread and going cross eyed, yes...it’s a good option.


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Click to expand...
You just adjust the years accordingly. I plan to retire in 2037 but I have my money in the 2045 plan to account for this.
 
Dred Pirate said:
vanguard target date retirement funds - extremely simply, pick a date you want to retire - and set it and forget it (for those Ron Popeil fans). You pay a slightly higher fee - like 0.01% - but the time it saves me is worth it.
Click to expand...

That's what I had before. But the expense ratio is 0.25% vs 0.06% from core equity (large cap) which is why I wanted to switch. Also I felt 10% bonds is too conservative while in my 30s.
 
An ultra low cost s&p fund that is up 36% over the last year. I'm 34 and actually broke 7 figures this year. Shooting for five by the time I'm fifty.
 
redfish955 said:
An ultra low cost s&p fund that is up 36% over the last year. I'm 34 and actually broke 7 figures this year. Shooting for five by the time I'm fifty.
Click to expand...

What is your allocation?
 
Graduating with a job in a down market is a once in a lifetime opportunity.
 
I lived with my parents for five years and pocketed 40k-70k a year during that span.
 
Yeah a lot of it is timing. Anyone who entered the workforce in 2009-2010 and bought a house by 2011-2012 is pretty much set.


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confettiflyer said:
Yeah a lot of it is timing. Anyone who entered the workforce in 2009-2010 and bought a house by 2011-2012 is pretty much set.


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Click to expand...
I'd still have like 700k under normal market conditions.
 
BMBiology said:
Just remember...if you have a boatload of stocks in your 401 k, you will be paying a lot of taxes when you start to cash out. Social security also counts as taxable income.
Click to expand...

I’m a millennial. I’ll be “lucky“ to have any income from SS. I’d only be truly lucky if SS was disbanded, but that will never happen.

I invest in a ROTH 403b/IRA’s. . ..so no taxes on mine. 🙂.
 
NITRAS said:
I’m a millennial. I’ll be “lucky“ to have any income from SS. I’d only be truly lucky if SS was disbanded, but that will never happen.

I invest in a ROTH 403b/IRA’s. . ..so no taxes on mine. 🙂.
Click to expand...

You'll still get social security. Just not as much as the baby boomers.
 
I'd have to break out a calculator to figure mine out...but it's like 60% Vanguard 2055 Target, which gets me VTSAX and Vanguard total international. Then I have Vanguard small cap growth and a bit of large cap growth. My HSA is just in Schwab s&p 500. Roth is all 2055 target date.

I might be even lazier and just make it all Vanguard Target and S&P 500 at some point.
 
mentos said:
This is how I rebalanced my CVS 401k, what do you guys think?

30% Core equity (large caps)
20% Mid cap index
20% Small cap index
15% International emerging markets index
15% International equity index

My current 401k is 100% S&P 500 cause the other choices suck. I'll use my Roth to balance out small caps, mid caps and international.
Click to expand...
You can look up the performance of the respective Vanguard ETFs. Over the past 10 years, the US stock market has done around twice the return of internationals. Of course no one knows what the future holds, but I'm sticking to my bias towards US stocks.

2020-02-15.png
 
pezdispenser said:
You can look up the performance of the respective Vanguard ETFs. Over the past 10 years, the US stock market has done around twice the return of internationals. Of course no one knows what the future holds, but I'm sticking to my bias towards US stocks.

View attachment 295698
Click to expand...

I have about 20% international stocks which have been underperforming. Most large U.S caps are international companies anyways.
 
WVUPharm2007 said:
If you aren't maxing Roth, 401k, and HSA, you are missing out on a lot of taxation savings. Don't just do company max.
Click to expand...
I'm already fire but like working. I'm still single so I'm flexing a little Shelby gt 350. 3500 square foot home in a popular neighborhood. Extravagant trips, just went to the super bowl and actually had one of those expensive tickets.
 
pezdispenser said:
You can look up the performance of the respective Vanguard ETFs. Over the past 10 years, the US stock market has done around twice the return of internationals. Of course no one knows what the future holds, but I'm sticking to my bias towards US stocks.

View attachment 295698
Click to expand...

Do you think this is better?

30% Core equity (large caps)
25% Mid cap index
25% Small cap index
10% International emerging markets index
10% International equity index
 
mentos said:
Do you think this is better?

30% Core equity (large caps)
25% Mid cap index
25% Small cap index
10% International emerging markets index
10% International equity index
Click to expand...

I like this allocation very much.


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