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Financial Planning / Foolish 401(k)s


Subject:  Re: 401K portfolio distribution Date:  9/25/2013  12:15 PM
Author:  op456op Number:  25144 of 26128

I have asset classes:
Stock Investments
Blended fund investments
Bond investments
Short term investments

Do any of these correspond to the choices in step 2, or do I need to look elsewhere
for help deciding on how to best divide my contribution?


  Fidelity                          Motley Fool
Stock Investments               Stock Mutual Funds
Blended fund investments        ? basically bullets 2 & 3
(likely Target Date Funds       on TMF list
mix of bonds & equities) 
Bond investments                Bond mutual funds
Short term investments          Money market funds or stable value accounts

This assumes you only have mutual fund type investments available to you from Fidelity. 

Index funds (both stocks & bonds) are probably the best choice from a fee cost perspective 
if they're available to you. Can you elaborate on what the choices are in each 
of the Fidelity categories or are they the only four funds avaialble for you to choose from?

Personally I'm not a big fan of Target Date Funds as they generally are
more actively managed/balanced that leads to higher fees/trading costs.

If it were me I would compare the costs/fees of a target fund with the combined fees 
of the stock investments & bond investments. 

Generally, your ratio of stocks to bonds should depend on your age. The
younger you are the more stocks you should have compared to bonds.

If you go with a Target Date Fund and want a more aggressive 
mix of stocks to bonds, pick a Target Date fund 10
years beyond your Full Retirement Age (FRA).

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