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Company 401K
Posted on 6/9/16 at 8:53 pm
Posted on 6/9/16 at 8:53 pm
I'm 28....Novice investor....looking for advice. My company matches 4% and then contributes 3% of my total compensation at the end of the year.
The retirement plan is through Vanguard. I currently have my entire balance, around 25k, in a target retirement 2055 fund. Should I diversify into other funds? 500 fund, small cap index fund, bond fund all look to have a good 10 year history.
Thanks for the advice.
The retirement plan is through Vanguard. I currently have my entire balance, around 25k, in a target retirement 2055 fund. Should I diversify into other funds? 500 fund, small cap index fund, bond fund all look to have a good 10 year history.
Thanks for the advice.
3
Posted on 6/9/16 at 9:06 pm to Geaux17
The target funds pretty much diversify for you based on your projected retirement age
They are pretty much set it and forget it
Feel free to put some money in other funds if you want to but you don't have to
They are pretty much set it and forget it
Feel free to put some money in other funds if you want to but you don't have to
Posted on 6/10/16 at 6:08 am to Geaux17
As far as targeted funds go, it's good and well diversified. Just know that you are only about half invested in the US stock market (VTSMX). The rest is in international stocks and to a lesser extent US and International bonds. If you want to invest only in the US stock market, then vanguard total stock market fund, VTSMX, is hard to beat. VTSMX has outperformed the targeted fund over the last 5 years.
Posted on 6/10/16 at 7:27 am to Geaux17
No. That fund is fully diversified. Anything you do will likely make your portfolio less diverse.
Posted on 6/10/16 at 8:21 am to Joshjrn
Thanks for the responses
Posted on 6/10/16 at 9:02 am to CajunTiger92
How is VFINX versus VTSMX? I think I currently only have access to VFINX at my company.
Posted on 6/15/16 at 4:30 am to Epic Cajun
Similar performance, VTSMX is better in the long run by a few points. VFINX tracks the SP500.
Posted on 6/15/16 at 9:28 am to CajunTiger92
When you are under 35-40 those projected retirement plans are great. I would personally never go to under 70-75% stocks until you Have enough money in there to retire on basically just bonds.
The stock market has never taken longer than 5 years and really 3 years to fully recover from a major recession/ drop. As long as you don't pull out and change your allocations during a recession you are fine. So I'd leave it in targeted date fund and then maybe add some domestic large cap funds on the side as you get older.
The stock market has never taken longer than 5 years and really 3 years to fully recover from a major recession/ drop. As long as you don't pull out and change your allocations during a recession you are fine. So I'd leave it in targeted date fund and then maybe add some domestic large cap funds on the side as you get older.
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