Am I doing this right?

[Anonymous]

I just rebalanced my 401K investments and I have no clue if I am doing it right or not. I have no guidance except what I've read on the investment company website, so I figure I'll go ahead and ask a bunch of strangers from the internet
I am 35 years old and my portfolio is as follows
Domestic Stock 61%
Foreign Stock 18%
Bonds 15%
Short Term 5%
Unknown 0%
Other 1%

I feel like I have too much in foreign stock, and I have no idea if the amount I have in bonds is a good or bad thing. According to website this is "aggressive growth". At the age of 35, should I still be doing "aggressive growth", or should I try and switch things around to follow a "growth" mix. Also, according to the analysis my "stock style" is "medium growth", rather than the "large blend" which is what the Dow Jones is. Should I be aiming more for "large blend"? I understand that these terms indicate the types of stocks included, but I don't understand the implications, like if one is higher risk than the other.

Thanks for any advice. I try and read about this stuff, but I really have a difficult time wrapping my head around all the terminology.

[Anonymous]

The rule of thumb was 100 less your age for stocks. However, many see this as too conservative now, and suggest something like 115-your age for the % you should have in stocks. This would suggest something like 80% stocks, 20% bonds, which is broadly where you are, so I think that is fine.

There are different schools of thought on what percentage to have in foreign stocks. The two extremes would 0% foreign, on the basis that large US stocks give you sufficient foreign exposure, and 70 % foreign, on the basis that that matches global stock market capitalization. Most people would lean towards the former, and 15-30% foreign stocks would be typical. Again, I think your percentage is fine.

Much more important than fiddling with your asset allocation is the amount you save, and the fees you pay. With a 401 you may not have much control over the latter.

[Anonymous]

Iwould suggest that ou cut back foreign stocks to 5% of your portfolio, 10% if you relly love foreign. You should also decrease bonds to less than 10%. I am your age and have 3% in bonds.

[Anonymous]

Historically speaking, 20% in bonds is the sweet spot for optimum gains. Any less than that and total return actually suffers a bit. Rebalancing once or twice a year back to an 80/20 ratio helps you increase the number of stock shares you own when the Dow goes down and the Bond market goes up.

Peronally, I'm

30% Bonds
35% Total Stock Market
15% International
15% Small Cap
5% REITs

It's a bit of a slice and dice approach, but I'm happy with it. I know international is volatile, but over time it should do well. I keep that puppy in my Roth. Everything else is in the 401k.

[Anonymous]

Always keep some powder dry! Three percent in bonds is far too little, unless you're twenty years old and know you won't be looking at your account for ten years. If you're responsible enough to go in and rebalance once or twice a year when your allocations have drifted due to market conditions(say, a 5-6% spread), then you'd be nuts not to have 20-30% in bonds available to do this with.

Another thing not to overlook is fees. Over time, funds with high fees and loads (yes, these still pop up in 401ks, unfortunately) will really eat into your returns. You're usually best off in the broadest, cheapest funds your plan offers.

Not to bang the drum, but www.bogleheads.org is really a marvelous resource for people trying to learn about investing without falling into the pitfalls that come along with it. Read their wiki, ask a few questions. You'll be amazed at what you can learn and do on your own.

[Anonymous]

Anonymous wrote:Iwould suggest that ou cut back foreign stocks to 5% of your portfolio, 10% if you relly love foreign. You should also decrease bonds to less than 10%. I am your age and have 3% in bonds.

This is bad and unsubstantiated advice.

[Anonymous]

A good thread on how much to put in international:

http://www.bogleheads.org/forum/viewtopic.php?f=1&t=116100&newpost=1690633