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John Hancock 401(k) - Investment Advice
Posted on 11/18/14 at 8:41 pm
Posted on 11/18/14 at 8:41 pm
Hey guys, I will become eligible to participate in my employers 401(k) plan on January 1st. Just some background on me, I am in my mid twenties, married, no kids. I have a one year emergency fund and I am currently maxing out a roth IRA. The wife is in the state retirement system. My company will match up to 4% so I will definitely be contributing the full amount to utilize the employer match. Below are the areas I can invest in (if you need all of the actual funds I will provide them), if you could provide some guidance on percentages per risk area, it would be greatly appreciated.
Types 1 - Conservative (guaranteed interest accounts)
Type 2 - Income (PIMCO Total return fund, Vanguard ST Federal Fund etc.)
Type 3 - Growth and Income - (500 index fund, T. Row Price Equity Income Fund, Large Cap Value Fund etc.)
Type 4 - Growth - (JPMorgan Mid Cap Value Fund, Total market index fund, Blue Chip Growth Fund, Mid Cap Index Fund, Small and Mid Cap value funds etc.)
Type 5 - Aggressive Growth - (Vanguard Small Cap growth, Oppenheimer global fund, Invesco small cap growth fund, Small Cap index fund, Mid Cap Stock Fund etc.)
I also have the option of investing in a "lifestyle portfolio" which is basically a style of investment sub advised by John Hancock, for example I could choose a Conservative, Moderate, Balanced, Growth or agressive lifestyle fund and not choose any individual investments.
Types 1 - Conservative (guaranteed interest accounts)
Type 2 - Income (PIMCO Total return fund, Vanguard ST Federal Fund etc.)
Type 3 - Growth and Income - (500 index fund, T. Row Price Equity Income Fund, Large Cap Value Fund etc.)
Type 4 - Growth - (JPMorgan Mid Cap Value Fund, Total market index fund, Blue Chip Growth Fund, Mid Cap Index Fund, Small and Mid Cap value funds etc.)
Type 5 - Aggressive Growth - (Vanguard Small Cap growth, Oppenheimer global fund, Invesco small cap growth fund, Small Cap index fund, Mid Cap Stock Fund etc.)
I also have the option of investing in a "lifestyle portfolio" which is basically a style of investment sub advised by John Hancock, for example I could choose a Conservative, Moderate, Balanced, Growth or agressive lifestyle fund and not choose any individual investments.
1
Posted on 11/19/14 at 8:18 am to Jabstep
John Hancocks lifestyle portfolios are top notch. Some of the sub advisors in there such as Wellington mgt, GMO, Robeco, etc require millions as an initial investment. However you get access to those managers through John Hancock. I am a fan.
Posted on 11/19/14 at 7:41 pm to Shepherd88
Thanks, the lifestyle portfolio returns don't seem to be as high as some of the other funds available.
I am assuming the downside risk is significantly lower if I choose to invest in the lifestyle portfolios? Also any recommendations on allocating between the types (agressive, growth, balanced, moderate, conservative)?
I am assuming the downside risk is significantly lower if I choose to invest in the lifestyle portfolios? Also any recommendations on allocating between the types (agressive, growth, balanced, moderate, conservative)?
Posted on 11/20/14 at 7:05 am to Jabstep
Don't get stuck on chasing returns, you'll get burned in the long run that way. You'll get a lot of different advice on this board but my advice to you is to read as much inside this board and outside this board and form your own opinion. If you find out it's not something you want to do then talk with a professional.
To get to your question though, the lifestyle funds have more mgt, more asset allocation, and higher expenses. The returns will more than likely not beat an individual fund or an index, it's not designed to. It's designed to lower volatility and still achieve above average returns. The different allocations (aggressive,growth,moderate,balanced,etc) are simply the same as some of those target date funds. The younger you are and or the higher your risk tolerance is, the more growth or aggressive you should be.
To get to your question though, the lifestyle funds have more mgt, more asset allocation, and higher expenses. The returns will more than likely not beat an individual fund or an index, it's not designed to. It's designed to lower volatility and still achieve above average returns. The different allocations (aggressive,growth,moderate,balanced,etc) are simply the same as some of those target date funds. The younger you are and or the higher your risk tolerance is, the more growth or aggressive you should be.
This post was edited on 11/20/14 at 7:06 am
Posted on 11/20/14 at 8:26 pm to Shepherd88
Thank you. I appreciate it.
Posted on 11/20/14 at 10:51 pm to Jabstep
Type 4.
1-2 are too conservative, 4 is better than 3, aggressive underperforms growth historically.
1-2 are too conservative, 4 is better than 3, aggressive underperforms growth historically.
Posted on 11/22/14 at 10:58 am to Retrograde
It depends to what your tolerance is for risk- at your age , no kids, etc...it seems like the most aggressive option will work best for you since you have all of your other bases covered( emergency fund, Roth IRAs, )
I would just make sure your job also has disability income insurance from a long term perspective as opposed to short term.
Good question- good luck!
I would just make sure your job also has disability income insurance from a long term perspective as opposed to short term.
Good question- good luck!
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