The Motley Fool Discussion Boards

Previous Page

Financial Planning / Foolish 401(k)s

URL:  http://boards.fool.com/fidelity-balanced-31-if-you-really-want-to-be-18147863.aspx

Subject:  Re: Armchair advisors: Review my 401k Date:  11/13/2002  6:34 PM
Author:  FuskieFool Number:  15542 of 25242

Fidelity Balanced - 31%

If you really want to be agressive, consider dropping or reducing this. Personally, I do not linke balanced funds because I think they have an identity crisis. Their growth tends to be consistent because either bonds or stocks usually take the lead. But they don't perform an any direction well since one often cancels out the other.

First of all, I would reduce your bond component to 10-20%. At your age, some might even suggest 100% stocks, but I am not one of them. Find your comfort zone and settle in.

Second, growth and income funds sometimes have that same schitzoid complex - what is their purpose, to grow share price or earn dividend income? The last few years have not shown much growth potential, but the market may be turning around (or not). On the other hand, reinvested dividends increase your base tax free and can help you accumulate more shares now that will take advantage of better growth later.

Personally, I like Fidelity's Low PR Stock fund. I have divided into small, medium and large cap (primarily small and large), and in the last year it seems that small cap has outperformed large cap, but that could always change.

The best recommendation I can give is to use Fidelity's on-line tools (they are very good) to establish your retirement goals and develop an investment strategy. Then use the Foolish material here to learn how to evaluate mutual funds, research the funds Fidelity offers, and make the best choices for you.

My Fidelity 401K has lost value, but not nearly as bad as my Roth and taxable investments so I must have done something right there.
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us