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Posted: 2/21/2006 7:24:05 AM EDT
[Last Edit: 2/21/2006 7:25:24 AM EDT by Aerospace_Engineer]
Hi,

I am 25 years old and have been with my current employer for one year.
I have a 401k with a 75% company match.
I have the maximum percentage of my salary that receives the company match contributed to my 401k.
Currently, I have 100% of my 401k invested in the "Wells Fargo Stable Value Fund". This is the default fund.
I have the option to change my investment elections, by increments of 1%, to the following funds (in no particular order):

1) Wells Fargo Stable Value Fund
2) PIMCO Total Return Bond Fund
3) SSgA Bond Market Index Fund
4) SSgA S&P 500 Flagship Fund
5) SSgA S&P Mid Cap 400 Index
6) SSgA Russell 2000 Index Fund
7) Victory Diversified Stock Fund
8) Lazard Mid Cap Fund
9) Harbor Small Cap Value Fund
10) Vanguard Intl Stock Index
11) Dodge & Cox International


Do you have any advice or suggestions about which funds I should shift my elections to, in order to maximize my investment return and growth?

Thanks in advance!
Link Posted: 2/21/2006 7:38:51 AM EDT
You are young you can be risky.
a. put the maximum in you can. tax deferred for 40 years is very powerful. Change your deduction to 12% or more.
b. go international, the dollar has no place to go but down. I would put a good sized chunk (and i have in mine)
c. go small. small stocks are deifnatley riskier, but also might have bigger returns,a nd you have many many years to recover.

So i would go
30% Dodge and Cox International
30% Lazard Mid Cap (I like mid-caps)
30% harbor small cap value
10% Diversified stock fund (jsut for some stability)
Link Posted: 2/21/2006 12:10:18 PM EDT
[Last Edit: 2/21/2006 12:23:54 PM EDT by scuba_ed]
I would avoid the "SSgA*" type funds...far too conservative.

Previous reply for allocation seems reasonable.

Have you maxed your 401-k to the employer match or maximun allowed by the IRS? If not, I would do so. Maximize your IRA, and you are likely yet able to take advantage of a Roth; do so...as a younger aerospace engineer, you won't be able to do so when you get to be an older aerospace engineer!

Best,

Ed
Link Posted: 2/21/2006 12:10:50 PM EDT
[Last Edit: 2/21/2006 12:11:34 PM EDT by scuba_ed]
.
Link Posted: 2/21/2006 2:48:04 PM EDT
What Scuba Ed said!
Link Posted: 2/21/2006 5:54:46 PM EDT
Since you're pretty young I suggest investing "aggressively" (but seek the advice of a pro of course).

Although it's not an exact science, the generally accepted strategy for tax-advantaged retirement accounts is 1) fund your 401k up to the employer's match; 2) fund your Roth IRA; 3) fund your 401k up to the max.

Take a hard look at the future of the Social Security system. And take a hard look at how our elected officials react to voter demands. Soon, a huge portion of voters will be beneficiaries of SS. It's pretty unlikely they will vote for people who want to decrease their benefits when SS goes bust. Taxes will go up, so that's why I advocate the Roth (which grows tax free using post-income-tax dollars) as opposed to the 401k (which grows tax-deferred using pre-income-tax-dollars).

Good luck.
Link Posted: 2/24/2006 10:46:43 PM EDT
MCHFX - mathews china fund
ODVCX - oppenheimer developing mkts C
MINDX - mathews india fund

im up almost 20% on mathews china after owning it for about 3 months
Link Posted: 2/28/2006 4:28:01 PM EDT

Originally Posted By scuba_ed:
I would avoid the "SSgA*" type funds...far too conservative.

Previous reply for allocation seems reasonable.

Have you maxed your 401-k to the employer match or maximun allowed by the IRS? If not, I would do so. Maximize your IRA, and you are likely yet able to take advantage of a Roth; do so...as a younger aerospace engineer, you won't be able to do so when you get to be an older aerospace engineer!

Best,

Ed



+1

Make it a self directed Roth. Insert high yielding stocks such as NFI. (I keep repeating myself)
I own >1000 shares so far. Do the research. www.nfi-info.net, www.thesanitycheck.com and read up on mortgage reits. You will not be disappointed.

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