401K allocation change?

[phatposts]

Just now, jobkastalu said:

Ah portfolio Target date retirement fund dhi bro.

then dont do anything. 

if you are not a fan of target dated funds - thats fine. 

but market ki react avvadam long term lo very very bad idea

[idibezwada]

6 minutes ago, phatposts said:

then dont do anything. 

if you are not a fan of target dated funds - thats fine. 

but market ki react avvadam long term lo very very bad idea

its always a bad idea for at least desis to go for a target dated funds

[phatposts]

Just now, idibezwada said:

its always a bad idea for at least desis to go for a target dated funds

explain - why?

especially desis specifically?

[jobkastalu]

21 minutes ago, phatposts said:

then dont do anything. 

if you are not a fan of target dated funds - thats fine. 

but market ki react avvadam long term lo very very bad idea

Not reacting to market bro. Intitally didn't pay much attention and just went with whatever employer offered as default. After realizing I can be very agressive as I still have 30 years for retirement wanted to change the allocation to remove bonds and cut down on international stocks for now and also the TDF has high expense ratio compared to the new funds I am choosing.

[phatposts]

29 minutes ago, jobkastalu said:

Not reacting to market bro. Intitally didn't pay much attention and just went with whatever employer offered as default. After realizing I can be very agressive as I still have 30 years for retirement wanted to change the allocation to remove bonds and cut down on international stocks for now and also the TDF has high expense ratio compared to the new funds I am choosing.

got it. 

agree with the higher expense ratio part. 

That portfolio is already aggressive at this time. Do you really want to be more aggressive?

[idibezwada]

49 minutes ago, phatposts said:

explain - why?

especially desis specifically?

we desis typically have something which we invested or passed on from family from india....for liquidity we can use that if its an emergency...the avg return on bonds is 4-5% and a low cost index fund its around 9%....its a big difference considering the years and amount...even if the market is down by the time you retire, we still end up beating bonds if invested in index...you can try back testing it

Below is an answer from Ai if invested 100K and the returns after 30 years, the difference would be even larger if its more than 100k

 

• 100% in Index Fund: $1,745,000
• 93% in Index Fund and 7% in Bonds: $1,653,090

[idibezwada]

44 minutes ago, jobkastalu said:

Not reacting to market bro. Intitally didn't pay much attention and just went with whatever employer offered as default. After realizing I can be very agressive as I still have 30 years for retirement wanted to change the allocation to remove bonds and cut down on international stocks for now and also the TDF has high expense ratio compared to the new funds I am choosing.

its better to go with a low cost index and be 100% in stocks

[Ravi860]

16 hours ago, jobkastalu said:

Guys, I am thinking to change my 401k allocation as below to be very aggressive. Please provide your valuable feedback.

Asset Class	Current Allocation	Target Allocation
US Stocks	67%	90% (FSKAX - Fidelity® Total Market Index Fund)
International Stocks	26%	10% (FSGEX - Fidelity® Series Global ex U.S. Index Fund)
Bonds	7%	0%

100% S&P if you are in 30s. I regret i didn’t do it earlier. It’s not complicated. 

[Tellugodu]

14 hours ago, jobkastalu said:

Mid-30s. It looks like historically, international index funds have never outperformed U.S. index funds, so I thought reducing my international allocation and removing bonds exposure completely to increase US Total market fund allocation might help to get better returns.

My strategy I am following, early mid 30’s - 100% S&P growth fund. Its an S&P index but bit aggressive S&P fund. Which should be good until early 50’s, then based on market conditions, you can slowly move some /of half of allocation towards bonds/fixed income. 

[jobkastalu]

21 minutes ago, Tellugodu said:

My strategy I am following, early mid 30’s - 100% S&P growth fund. Its an S&P index but bit aggressive S&P fund. Which should be good until early 50’s, then based on market conditions, you can slowly move some /of half of allocation towards bonds/fixed income. 

Thought to go with 100% US Index (Struggled a lot to decide whether to go with just large cap rather than Total market but to have some diversification to include mid/small cap went with Total market fund which has 85-90% exposure to larger cap and remaining to mid/small cap) and added 10% Total international stocks to include developed and emerging markets as well).

[phatposts]

2 hours ago, idibezwada said:

we desis typically have something which we invested or passed on from family from india....for liquidity we can use that if its an emergency...the avg return on bonds is 4-5% and a low cost index fund its around 9%....its a big difference considering the years and amount...even if the market is down by the time you retire, we still end up beating bonds if invested in index...you can try back testing it

Below is an answer from Ai if invested 100K and the returns after 30 years, the difference would be even larger if its more than 100k

 

• 100% in Index Fund: $1,745,000
• 93% in Index Fund and 7% in Bonds: $1,653,090

avanni predictions saami. bonds act as insurance in a downward market. 

[idibezwada]

24 minutes ago, phatposts said:

avanni predictions saami. bonds act as insurance in a downward market. 

ela? please explain

[aratipandu]

5 hours ago, phatposts said:

avanni predictions saami. bonds act as insurance in a downward market. 

That used to be the traditional view anna...stock market down aythe commodities and bond market up avthay...so balance avuddhi portfolio ani...

but since 2008 recession, ee theory commodities market ki baane apply ayyindhi kani bond market ki avvala...ippudu bonds kuda down avthunnay stocks down aynappudu...especially those Bond index funds, if you look at their long term performance, they are basically junk...

retirement daggaraki occhaka individual ga treasury bonds konukkodam better instead of investing in those stupid bond index funds...ani na personal opinion.

[aratipandu]

8 hours ago, idibezwada said:

low cost index fund its around 9%....

Anna...9% perform cheste over the long term daibidi dibide assala...

naku anni aashal levu, expecting 6.5-7% over the next 20 yrs for S&p 500 and I'll be super happy if the index meets those expectations.

[idibezwada]

1 minute ago, aratipandu said:

Anna...9% perform cheste over the long term daibidi dibide assala...

naku anni aashal levu, expecting 6.5-7% over the next 20 yrs for S&p 500 and I'll be super happy if the index meets those expectations.

i hope it will be easily be 9% as its are capital lite market since last 30-40 years and it will continue going forward