any financial experts in the house ?

[2005SUBMARINER]

hello rwg members ..

need a lil guidance on where to allocate my 401k contributions . heres how its divided .

short-term fixed income 0%

fixed income 0%

balance / asset allocation 100% ( thats where i have everything going into )

large us equity 0%

small / mid us equity 0%

international equity 0%

so far with my existing choice iv seen nothing but - return , im not an expert in this realm but i know i am investing wrong .

can anyone who might know more about the 401k market can point me in the correct direction ?

thanx in advanced ed.

p.s. or its just the economy ?

[fakemaster]

Nothing BUT return or did you mean NO return?

[ironmarshal]

I think he meant negative return.

In order to answer the question first I need an idea of how long you intend to wait until retiring.

[2005SUBMARINER]

I think he meant negative return.

In order to answer the question first I need an idea of how long you intend to wait until retiring.

HEY sorry for the late reply man . im 40 & will retire in 20 years .. thanx again man ..

[Jawo]

Equities is always a good category to invest in. It is med-high risk but can give a return around 8-10%. The USD is quite unstable these days but historically the USD will bounce back. Equities might not be a bad move. I invested in Canadian Equities in a sizable amount and have seen a sizeable return. The growth of precious metals too is on the rise. I also invested heavily into the precious metal stocks 5 years ago and have also seen a sizeable return. I usually don't invest in asset allocation so I cannot comment on its potential. 20 years away is still a fair amount of time for your stock to recover.

[2005SUBMARINER]

thanx man appreciacte the feed back !

[USMC8404]

I am 40 with a 20 year horizon to full retirement as well. This is how my investments are divided:

large us equity 50%

small / mid us equity 20%

international equity 30%

I invest 15% of my gross income this way and have for the past 6 or 7 years. In spite of the recent down turn in the market and high energy prices my balance sheet remains in the black and is growing. If you have paid off all of your debt, and established a 3-6 month of expenses into an emergency fund then start investing 15% of your gross as I have shown you above.

But remember the first consideration to building wealth is to pay off all of your debt! It does no good to pile money into any investment with 10-15% projected return if you are paying your creditors 15-23%. The borrower is always slave to the lender!

Good luck, hope this helps.

Cheers...

[perry563]

Stocks will eb and flow with the entire economy. If you are 40 you have nothing to worry about even if your 401k investment decreases dramaticly in value. Actually think of it as an opportunity as you now can buy "cheap" which will mean more $ once things bounce back...as they always eventually do. So if your down now that is to be expected since the entire market is way down. At your age I would invest aggessively with a combination of large cap, small and international equities. You can invest as much as around 16000 annually (depending on your plan) and I would try to maximize this as best you can.

Pay off all major credit card debt and build for yourself a 6-12 month cushion in the bank just in case you lose your job. Also ...dont check you 401k balance all the time. It will fluxate day to day and week to week etc but whats important is that it rise over the long haul and that is to be expected.

[Trevor52]

Better than I deserve.

You must be a Dave Ramsey fan.

[

quote name='USMC8404' date='Jul 15 2008, 04:24 AM' post='488207']

I am 40 with a 20 year horizon to full retirement as well. This is how my investments are divided:

large us equity 50%

small / mid us equity 20%

international equity 30%

I invest 15% of my gross income this way and have for the past 6 or 7 years. In spite of the recent down turn in the market and high energy prices my balance sheet remains in the black and is growing. If you have paid off all of your debt, and established a 3-6 month of expenses into an emergency fund then start investing 15% of your gross as I have shown you above.

But remember the first consideration to building wealth is to pay off all of your debt! It does no good to pile money into any investment with 10-15% projected return if you are paying your creditors 15-23%. The borrower is always slave to the lender!

Good luck, hope this helps.

Cheers...

[USMC8404]

@Trevor52: You bet I am! Great advise I think.

[2005SUBMARINER]

THANX guys i realy appreciate all your advice !

[Shundi]

I agree with Trevor...and I'd add stay away from financials right now unless you enjoy day trading (although FNM FRE are most likely guaranteed to have major help from the US government...what with 5.2 trillion (half) of US mortgages in their portfolio...might be a great long term buy in the next few days as it tanks...I've been shorting it and I'll start buying soon...but that's my play day trading, not 401k)

[lanikai]

I am a certified expert on spending.. ask my accountant.. he'll vouch for me..