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Author: bawden Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76075  
Subject: 401(k) Rollover Date: 9/16/2003 12:42 AM
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I recently left a job and need to decide what to do with my 401(k) assets. They are currently in S&P Index Funds with Dreyfus. I need to roll over the 401(k) into an IRA. Due to the investing time table, all are at loss but back on the rise. Because of this, I suspect that it is best to keep my assets in the funds they are already invested in rather than selling and rolling over into other index funds. Does this sound right?
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Author: jesserivera67 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37204 of 76075
Subject: Re: 401(k) Rollover Date: 9/16/2003 1:06 AM
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I think it kind of depends on what some of your goals are, how you have your current funds allocated, and then strike a balance with all of that based on your risk tolerance.

Not sure what your portfolio looks like, and the Dreyfus S&P 500 has an expense ratio of .2% which is always nice. It's a large blend fund so I think it can work as a core part of your portfolio but I think you're going to need to diversify a bit more. How long before you retire? Is the 401(k) your main investment to date? Do you have an IRA?

For your rollover, I'm a Vanguard advocate but I think TIAA-CREF also offers some great choices...T.Rowe Price is not too bad either I don't think. Seems like you're on the right track with Index funds now just need to spread them around a bit.





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Author: bawden Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37205 of 76075
Subject: Re: 401(k) Rollover Date: 9/16/2003 10:40 AM
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Thank you for your thoughts. Right now, I am 27 and 3 years into the working world . . . So I have a while until retirement. My 401(k) includes those 3 years and has a balance of $28K. It is primarily in Dreyfus Basic S&P 500 Stock Index Fund, with some in Dreyfus MidCap Index Fund and a very small amount ($2K) in Vanguard Windsor II Fund. I didn't diversify because my 401(k) had only these no load/low fee options.

At my new job with my SEP IRA, I can choose where to invest and likely will open a Vanguard account and diversify a bit more.

What I am trying to figure out is whether I should liquidate the Dreyfus Funds and put them into Vanguard or just keep them as-is but move them to Scottrade or something. I can choose diversity with my new SEP IRA funds and just leave the Dreyfus where they are.

Any insights are appreciated.

Finally, any thoughts on whether to stay with index funds versus index stocks (QQQ, SPDR, etc.).

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Author: yttire Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37206 of 76075
Subject: Re: 401(k) Rollover Date: 9/16/2003 11:02 AM
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You are doing well. I would think seriously about getting the down payment for a house together and purchase one- this would be a good diversification.

I think that index stocks may be to help avoid capital gains even more than index funds, because index funds need to rebalance or something.. not sure.. if this is the case it matters little to you since your funds are in tax deferred.

I would move the funds out of your old employers accounts so you don't have to keep in touch with them, although the choice of where they end up could well be the same mutual funds. I would be curious if Scottrade allows you to buy access to any mutual fund without fees.

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Author: jesserivera67 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37209 of 76075
Subject: Re: 401(k) Rollover Date: 9/16/2003 11:30 AM
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Well for one thing...you're doing very well so congrats on that. Well if you have those funds you have a mix of Large Blend, Large Value and a Midcap Blend I think. Missing some small cap so you might want to start there.

As for moving your funds to Scottrade that's really up to you. If your funds are in a 401(k) I'm assuming what you mean by liquidating your assets is to move them to another IRA somewhere and not cash out since you'll be hit with penalties.

If you leave your Dreyfus funds as is (in your old 401k) you can't add to that investment so rolling them over would be my first recommendation.

If you go with Scottrade you could always reinvest in those funds but my recommendation is to go with Vanguard as they have every category you'll need so diversifying is pretty simple.

At age 27, if you can manage some risk, I would recommend 100% equity portfolio with a mixture of Large Caps and Small caps both in growth and value funds. Definitely get some International in there with the same preferences.

As far as the ETF investing (i.e. QQQ, SPDR, etc.) they're not bad choices either but one of the main advantages to them is you can trade them like stock as you know. Me being a buy and hold guy would say go ahead and go for it but stick to buy and hold strategies. Constant trading leads to fees which will impact performance of your portfolio.



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Author: PolymerMom Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 37217 of 76075
Subject: Re: 401(k) Rollover Date: 9/17/2003 9:54 PM
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Another point to consider: The old 401k plan may change fund offerings somewhere down the road. I've seen that happen at least three times in the past 5 years. Sometimes its due to a merger or acquisition. Othertimes the company may just find a "better" deal. The new funds weren't always an improvement.

jesserivera67 has a very good point on international diversification!

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