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Hey Fools,

First-time poster here! I am a 30-yr old, fairly new-to-the game-but-willing-to-take-risks-because-I'm-young investor. I have a question about a 401(k) allocation suggestion that I found on this site.

I have about $25k in my 401(k) fund right now, and I'm looking to stray away from the age-based "2040" target portfolios through SEI investments and Fidelity, mostly because I'm picking up some pretty bad vibes around here about them (due to higher expense loads, not aggressive enough, etc.). That, and I've been pretty disappointed with their returns in the last 1.5 years, given the market's rebound.

In a very good Retirement article on The Fool's website, I saw the following chart on some advised allocation percentages for an "aggressive" retirement fund:

Large-cap US stocks: 40%
Small-cap US stocks: 20%
Foreign stocks: 20%
REITs: 5%
Bonds: 15%

I actually have two questions about this:

1) Where does a mid-cap index fund fit into this picture? Does their risk/return lean more to the large- or small-cap side? How can I fit a mid-cap into this allocation structure? I have Perkins Mid-Cap Value (JMCVX) available to me, and I like the looks of it - I just don't know where it fits here.

2) There are a few foreign stocks to pick from, some more risky than others. Emerging Markets being the riskiest. What do you think this specific asset allocation had in mind for "Foreign stocks" - something risky or conservative?


I've also been using mainly alphas and expense ratios when considering funds - I'm willing to pay for a higher alpha, but if all things look equal, I'm taking the fund with the lower expense ratio. This is why the Perkins Mid-Cap looked so attractive. High alphas at a reasonable expense.

Any feedback on my two questions would be greatly appreciated!



Let's make some money,
Carl
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