reallocating my 401k choices?

Question

I am reallocating my 401k choices. what should the percent be for the following types of investments?

International - (Stock)
Stock - (Growth)
Stock - (Growth/Income)
Fixed Income

I was thinking:

15% - International - (Stock)
50% - Stock - (Growth)
25% - Stock - (Growth/Income)
10% - Fixed Income

Answer 1

The basic premise of your question is one of divesting your investment over a wide range of types of investments. Hogwash.

Maybe you can invest in Hong Kong or China, but you're taking on more unknowns than you know. And if you haven't checked lately, most stock markets follow the Dow. Most economies follow the U.S. Most stocks follow the Dow. The economy of the U.S. follows the Dow. All ships rise and fall on the tide.

You can invest and divest into different industries, but if the economy is going into recession, the Dow is going down and most stocks are going down, no matter how much you divest.

If you really want to divest, buy ETF;s on the Dow.

If you have a strong stomach for $100 price fluctuations in a day (that's $10,000 on 100 shares), you can buy something like Google.

But first, what is your definition of Long-Term? If you had bought anywhere around the 2000 high in the stock market, you would still be waiting to get even after six years, and wouldn't mind waiting another seven years to make a profit if you are truly a "long-term" investor.

The "Buy-and-Hold" strategy really doesn't hold water if you consider it depends on when you "buy." You might go 25 years without a profit, if history is any guide. But if that is your deal, then go for it.

Otherwise, you have to consider that the Dow has again failed at that all-time historical high set in Jan 2000 at 11,721. Looks like a Double Top to me, but some people say we could double that again. Logically, this is one of the scariest markets I've ever seen in two decades of watching it; just pick something that is stable, anything. Doesn't exist, does it. Anything could send this market over the edge to the great void. But hey, it might double too, who knows.

For most people, the name of the game is capital preservation. You don't invest when the market gets too risky or too frothy or is nearing a market top or an old market top, or when the market is overpriced, or unstable, and all of these things are true today. There really is a time when cash is King. That 1.5% CD is going to look pretty good when everyone else is cryin' in their beer about losses. Or the market could just go sideways to work off the excesses, but either way, you're safe if you're out. Wanna throw the dice, go to Vegas.

If you wish to research the “Buy and Hold Strategy” further, or perhaps trade yourself, I recommend two book titles. One is called "Which Is Better, Buy-and-Hold or Market Timing?" The other is "Do You Have What It Takes to Be a Market Timer?" They will give you plenty to think about.

Answer 2

Like was said before, it depends on age and risk tolerance. Withstanding of market deviations (the stock market losses recently), and assuming you want to be fully invested, I recommend the following:

age <30:
20% International
40% Growth
30% Growth/Income
10% Fixed Income

age 30 15% International
30% Growth
35% Growth/Income
20% Fixed Income

age >55:
10% International
20% Growth
30% Growth/Income
40% Fixed Income

Answer 3

It depends on your age and your risk tolerance. If you are young with many years to go until retirement, your allocation looks pretty good. The only suggestion I would make is increasing the international to 25-30% and reducing domestic growth. If you are closer to retirement, consider a heavier portion of fixed income. Whatever you do, you're taking a great step in enrolling in the program.

Answer 4

The allocation completely should depend on your age, objectives and tolerance for risk.

The above allocation seems relatively well-balanced. If your time horizon (the time that you can put this money to work) is about 10 years, you should do fine. If your time horizon is shorter, increasing the percentage of fixed income may be safer and less volatile.

Answer 5

In addition to increasing the allocation to International, you may also diversify your domestic stock among large cap, mid cap, and small cap. Perhaps 1/3 in each.

Answer 6

May be you are little late, but better late then ever. Withdraw from International, keep 100% cash or money market for next few months, then try your luck with gold.

Read uscommoditiestrader.com

Answer 7

First would have to know how old you are and how long it will be before you would need the money.

Answer 8

who cares your lame