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[quote=Anonymous][quote=Anonymous]I (35F) am not a risk averse investor.

For the past few years, 100% of my 401k contributions including my employer match has gone into a fund that mimics the SP500.

Today, for the first time in two years, I looked at returns for various funds. I noticed Intl Equity, Emerging Markets Equity, and my employer - a large defense contractor - have grossly outperformed the SP500. Their 1-year rate of returns are 32%, 43%, and 42% respectively.

Obviously, I’m salty at the gains I could’ve received. I know my employer’s surge is due to the current administration.

I know no one here has a crystal ball and I shouldn’t time the market, but I would love some advice on how to reallocate my 401k. I’m thinking:

40% - Company stock
40% - Emerging Markets Equity 
10% - Intl 
10% - SP500

What are your thoughts?

[/quote]

I'd be concerned about putting so much into your company stock.

Think about it this way -- so much of your financial health depends on your current employer (i.e., paycheck) that they are by default already a huge part of your overall financial "portfolio."

If your company does well, you reap the benefit of, well, having a job; maybe getting a raise; maybe getting a bonus. You won't necessarily capture any stock market gains for your company's stock (aside from what sliver of the SP500 it represents) but you do benefit financially when your company does well.

If your company does poorly, consider the risk of losing your job while at the same time the company stock might be underperforming. While it's not necessarily correlated, there is certainly a relationship.

Therefore, I would definitely consider reducing the % you're allocating to your company's stock -- probably swap that with the SP500 (so 10% company stock, 40% SP500).

Right now, it looks like you're chasing past gains out of regret for missing out. But who knows where things will go from here.[/quote]

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