Help with 401k allocations

[ebonie3000]

I am 36 yrs old and have been contributing to my company's 401k plan since Ive been eligible. I would like to get feedback/opinions of my allocations to ensure I am investing in the best funds:

 

Investment Fund: Percentage:

SSgA Life SolutionsSM Balanced Growth Fund 10%

SSgA S&P® 500 Index Fund 50%

American Century International Growth Fund-Advisor Class 20%

SSgA Russell® 2000 Index Strategy Fund 20%

[hegemony]

no global fund??

 

my advice is to spend time consulting with a FEE based financial planner who will analyze your particular situation with your goals in mind. FEE BASED not commission based...

[ebonie3000]

excuse my ignorance but whats the difference between FEE based and commission. Do you mean in what they wukk charge me or the commission from the investments.

[54regcab]

What are the ticker symbols for each of the funds ?

[ebonie3000]

Ticker symbols are:

 

 

^GSPC

^RUT

SSLBX

TWGAX

[54regcab]

GSPC

didn't match description of fund.

RUT is a Russell 2000 index stock, it has done well and I would keep it if you like index stocks.

SSLBX seems to have a decent long term track record adn the fund manager has been there for 6 years, probably a keeper.

TWGAXis a mediocre fund, I would look for something better.

 

What other choices do you have in your plan? www.marketwatch.com and www.morningstar.com are 2 of many sites that rate funds/stocks, check them out.

Edited March 20, 2005 by 54regcab

[hegemony]

excuse my ignorance but whats the difference between FEE based and commission. Do you mean in what they wukk charge me or the commission from the investments.

<{POST_SNAPBACK}>

fee based means you pay them for advice. commissioned based planners will generally not charge you for advice but they will try to sell you funds, etc. where they get a nice commission (i.e., they are working for themselves not you). It is worth $250 or so to get relatively neutral advice rather than "free" advice from a commissioned advisor IMHO.

[54regcab]

excuse my ignorance but whats the difference between FEE based and commission. Do you mean in what they wukk charge me or the commission from the investments.

<{POST_SNAPBACK}>

fee based means you pay them for advice. commissioned based planners will generally not charge you for advice but they will try to sell you funds, etc. where they get a nice commission (i.e., they are working for themselves not you). It is worth $250 or so to get relatively neutral advice rather than "free" advice from a commissioned advisor IMHO.

<{POST_SNAPBACK}>

 

For investments outside of a 401K you are right. However most 401K planners give decent (althouhg somewhat generalized) advice for free. Their motive is to get you to feel confident enough to invest a larger chunk of your paycheck. In most cases it makes no difference to them what funds you pick. Of course if you want to spend the $250 it might be worth it if you have enough to invest.

[ebonie3000]

GSPC

didn't match description of fund.

RUT is a Russell 2000 index stock, it has done well and I would keep it if you like index stocks.

SSLBX seems to have a decent long term track record adn the fund manager has been there for 6 years, probably a keeper.

TWGAXis a mediocre fund, I would look for something better.

 

What other choices do you have in your plan? www.marketwatch.com and www.morningstar.com are 2 of many sites that rate funds/stocks, check them out.

<{POST_SNAPBACK}>

 

 

The symbol for SSgA S&P 500 Index is SVSPX. I am curious to kow about this one since Im contributing 50%.

 

My other choices are:

 

SSgA Government Money Market Fund

PIMCO Total Return Fund - Class A

Scudder High Income Plus Fund - Investment Class

SSgA Life SolutionsSM Income & Growth Fund

SSgA Life SolutionsSM Balanced Growth Fund

SSgA Life SolutionsSM Growth Fund

AllianceBernstein Growth and Income Fund - Class A

Scudder Large Cap Value Fund - Class A

SSgA S&P® 500 Index Fund

Fidelity® Advisor Growth Opportunities Fund - Class T

Oppenheimer Capital Appreciation Fund - Class A

Fidelity® Advisor Equity Growth Fund - Class T

Franklin Rising Dividends Fund - Class A

MFS® Mid Cap Growth Fund - Class A

Putnam OTC & Emerging Growth Fund - Class M

American Century International Growth Fund - Advisor Class

Janus Adviser Worldwide Fund - Class I

PIMCO NFJ Small-Cap Value Fund - Class A

SSgA Russell® 2000 Index Strategy Fund

Scudder Small Cap Growth Fund - Class A

[54regcab]

Please give ticker symbols. You can actually go to www.marketwatch.com and www.morningstar.com and get ratings on the funds. Only consider funds Morningstar 4 stars and above or Lipper rating of 2, ignore tax efficiency since the money is in a retirement account. I personally have money invested in the Putnam Total Return fund and although it's not done well the last few months I belive it's coming back.

[ebonie3000]

TICKER SYMBOLS ARE:

 

PPTAX

SSLIX

SSLBX

SSLGX

CABDX

KDCAX

SVSPX

FAGOX

OPTFX

FAEGX

FRDPX

OTCAX

POEMX

TWGAX

JWGRX

PCVAX

SSDAX

MGHVX

SSGXX

^RUT

Edited March 28, 2005 by ebonie3000

[alexlev]

In general, keeping 50% in an index fund the rest spread among the actively managed funds seems sensible. But it's difficult to give any real advice because there are some things missing from you original post. For example, we don't know what your appetite for risk is. I'm 32, but I've found that I'm pretty conservative in my investing. So I've had to force myself to take more risks. Also, it's not clear what % of your compensation is being invested in your 401k, and whether or not you have any other investments outside the 401k. All these factors will impact the sort of recommendation you might receive.

 

So in relatively general terms, here's my take on what you've told us. There are lots of things to consider when investing. But since we're talking about investing in a 401k, besides the actual performance of the fund, the thing you should be most concerned about is the expense ratio. And of course you want to try to avoid any loads if possible. I personally also have a strong value bent in my investing. So I would suggest that you look for funds that produce a nice yield.

 

Of those you listed, PCVAX, FRDPX, and KDCAX are the three domestic equity funds that immediately look interesting. MGHVX is also a decent bond fund. Unfortunately, there aren't any decent foreign funds in there, and you really should have at least one. True PCVAX and KDCAX have a little foreign investment, but it's only about 4-6% each. The SSgA Life Solutions funds (SSLIX, SSLBX, SSLGX) are decent, but each is a fund made up of other SSgA funds. This being the case, I just can't stomach the idea of paying an expense over and above the expense of each of the funds held within the Life Solutions funds. T. Rowe Price and Vanguard both have fund-of-funds options that don't double up on expenses. It really is almost like paying for the same things twice. SVSPX is a decent index fund. And index funds are a very important part of any smart investor's portfolio.

 

401k's are fantastic investment vehicles. But since your investment options within the 401k seem limited, I would suggest that you also open an IRA or even a regular taxable brokerage account with a discount broker. This will give you an opportunity to invest in a decent international fund and some better blend and growth funds. The only even remotely decent growth option I saw in your list was OPTFX.

 

Good luck.

Edited March 28, 2005 by alexlev

[ebonie3000]

thanks so much for taking the time to give your advice, much appreciated!!!