Comments on: Changing My 401k Asset Allocation http://www.moolanomy.com/229/changing-my-401k-asset-allocation/ Personal Finance. Investing. Wealth Building. Mon, 22 Mar 2010 01:29:36 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Richard http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-24703 Richard Fri, 20 Nov 2009 05:58:26 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-24703 It is best to have equal amounts in percentage because you never know which fund will do better. There is no need for bonds funds because they provide little value. Stick with 25% in Large Cap, Small Cap, Medium Cap and International. Go with money market 100% when the stock market is at a one year low. It is best to have equal amounts in percentage because you never know which fund will do better. There is no need for bonds funds because they provide little value.

Stick with 25% in Large Cap, Small Cap, Medium Cap and International.

Go with money market 100% when the stock market is at a one year low.

]]> By: Pinyo http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-20570 Pinyo Mon, 30 Mar 2009 12:50:17 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-20570 @OSR - So far so good. But I did add more to my international equities and bonds allocation since I wrote this. @OSR – So far so good. But I did add more to my international equities and bonds allocation since I wrote this.

]]> By: OSR http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-20551 OSR Sun, 29 Mar 2009 03:15:23 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-20551 How'd all that work out for you? How’d all that work out for you?

]]> By: Steve http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-5804 Steve Sat, 16 Feb 2008 14:26:46 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-5804 Pinyo - good article. You should be able to find the funds you are investing in through Morningstar. What are the names of the funds? Type them into Google and it should point you to the Morningstar page for that fund. That's what I did. Pinyo – good article. You should be able to find the funds you are investing in through Morningstar. What are the names of the funds? Type them into Google and it should point you to the Morningstar page for that fund. That’s what I did.

]]> By: Everything Finance http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-1169 Everything Finance Wed, 17 Oct 2007 13:20:19 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-1169 <strong># 5 Edition: Carnival of Everything Finance...</strong> # 5 Edition: Carnival of Everything Finance Welcome to the October 15, 2007 edition of carnival of everything finance. We had over 80 really good articles submitted for this edition. Editor favorites have "*" on them. Earning Money... # 5 Edition: Carnival of Everything Finance…

# 5 Edition: Carnival of Everything Finance

Welcome to the October 15, 2007 edition of carnival of everything finance.

We had over 80 really good articles submitted for this edition.
Editor favorites have “*” on them.

Earning Money…

]]> By: The Dough Roller Roundup (Attending 15 Year College Reunion edition) | The Dough Roller http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-1062 The Dough Roller Roundup (Attending 15 Year College Reunion edition) | The Dough Roller Fri, 12 Oct 2007 20:12:23 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-1062 [...] Changing My 401k Asset Allocation @ Moolanomy [...] [...] Changing My 401k Asset Allocation @ Moolanomy [...]

]]> By: Pinyo http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-1055 Pinyo Fri, 12 Oct 2007 14:56:53 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-1055 @kev - thanks for sharing, good to know I am not alone. @Dave - thanks for pointing out the Morningstar tool. I am not sure if this is even possible since none of my 401k funds are public and has no ticker symbol. The only information is what little they provided my 401k site. @Jon - good caution about generalization and assumptions -- I should be more careful. I did go back and it seems CAGR for the S&P 500 between 1966 (89.23) and 1988 (258.89) is about 5%; assuming dividends add another 3% and that's about 8% total -- not too bad. However, the author point was that you could achieved a better result risk-free using CDs. Great points about having money to buy low and the whole trick is the rebalancing portion ("Re-allocation"). @kev – thanks for sharing, good to know I am not alone.

@Dave – thanks for pointing out the Morningstar tool. I am not sure if this is even possible since none of my 401k funds are public and has no ticker symbol. The only information is what little they provided my 401k site.

@Jon – good caution about generalization and assumptions — I should be more careful. I did go back and it seems CAGR for the S&P 500 between 1966 (89.23) and 1988 (258.89) is about 5%; assuming dividends add another 3% and that’s about 8% total — not too bad. However, the author point was that you could achieved a better result risk-free using CDs.

Great points about having money to buy low and the whole trick is the rebalancing portion (“Re-allocation”).

]]> By: Jon http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-1054 Jon Fri, 12 Oct 2007 14:27:20 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-1054 “For the 23 year period 1966-88, the U.S. large-cap growth stocks…underperformed totally riskless one-month bank certificates of deposit.” Keep in mind that quotes like these generally assume that you invested $X in 1966, let it sit there, and then took it out in 1988. That just doesn't happen in reality. If you make regular, yearly contributions, you'd have to look at 1966-1988, 1967-1988, 1968-1988, etc. <a href="http://finance.yahoo.com/charts#chart1:symbol=^gspc;range=my;indicator=volume;charttype=line;crosshair=on;logscale=on;source=undefined">This chart</a> will show you that from 1974-1988, the return was like 300%! That said, in any account where you can't add and remove money freely and there is a yearly cap on contributions(like a 401k or Roth IRA), it's critical to have some portion in bonds or cash. The reason is simple.. when the market crashes (it always does eventually), you're *supposed* to buy buy buy. Doesn't everybody dream of going back in time and investing $100 or so during the Great Depression? Well, it's nice to have 20% of your holdings in bonds or a money market so that when stocks fall a lot, you can sell some bonds and quickly buy stocks while they're low. After all, the most important aspect of asset allocation is asset RE-allocation! That's where most of the benefit come from. “For the 23 year period 1966-88, the U.S. large-cap growth stocks…underperformed totally riskless one-month bank certificates of deposit.”

Keep in mind that quotes like these generally assume that you invested $X in 1966, let it sit there, and then took it out in 1988. That just doesn’t happen in reality. If you make regular, yearly contributions, you’d have to look at 1966-1988, 1967-1988, 1968-1988, etc. This chart will show you that from 1974-1988, the return was like 300%!

That said, in any account where you can’t add and remove money freely and there is a yearly cap on contributions(like a 401k or Roth IRA), it’s critical to have some portion in bonds or cash.

The reason is simple.. when the market crashes (it always does eventually), you’re *supposed* to buy buy buy. Doesn’t everybody dream of going back in time and investing $100 or so during the Great Depression? Well, it’s nice to have 20% of your holdings in bonds or a money market so that when stocks fall a lot, you can sell some bonds and quickly buy stocks while they’re low.

After all, the most important aspect of asset allocation is asset RE-allocation! That’s where most of the benefit come from.

]]> By: Dave http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-1036 Dave Thu, 11 Oct 2007 07:48:00 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-1036 Morningstar has a great feature. Give them your portfolio & x-ray it to see what you have. It has an asset allocation tool too. You also need to examine your international holding (are they international large cap, small cap, emerging market, etc.) Some of the morningstar features are for paying members but you can try a two week free trial. Good luck re-balancing! Morningstar has a great feature. Give them your portfolio & x-ray it to see what you have. It has an asset allocation tool too. You also need to examine your international holding (are they international large cap, small cap, emerging market, etc.) Some of the morningstar features are for paying members but you can try a two week free trial. Good luck re-balancing!

]]> By: kev http://www.moolanomy.com/229/changing-my-401k-asset-allocation/comment-page-1/#comment-1035 kev Thu, 11 Oct 2007 05:31:52 +0000 http://www.moolanomy.com/229/changing-my-401k-asset-allocation/#comment-1035 That's pretty much dead on with my asset mix for my 401k plan (except my plan does not offer REITs). I have 10% in bonds/cash and 25% in international/emerging markets. I'm a few years younger than you, but I still prefer the 90/10 stocks-bonds ratio. It suits me. That’s pretty much dead on with my asset mix for my 401k plan (except my plan does not offer REITs). I have 10% in bonds/cash and 25% in international/emerging markets. I’m a few years younger than you, but I still prefer the 90/10 stocks-bonds ratio. It suits me.

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