Which investment elections should I choose for my 401k?

Question

I'm a 22 year old guy that just got started with my company's 401(k) a few months ago.  Which elections should I choose, and what percentage should I put towards each?

Choices:

-Laudus International MarketMasters (Foreign Large-Cap Growth)
-Gartmore Morely Stable Value Fund (Stable Value)
-FPA Crescent Portfolio (Moderate Allocation fund)
-Vanguard 500 (Index fund)
-Sound Shore (Large-cap Value fund)
-Calamos Growth A fund (Mid-Cap Growth fund)
-PIMCO Real Return D (Gov't Bond fund)
-Victory Diversified Stock A (Large-Cap Blend/Growth fund)

I'm young, so I figure I can be more aggressive and not keep as much in cash or stable value.

I'd appreciate any help from more experience 401(k)-ers and financially educated people.  Thank you!

vegas_iwish · Accepted Answer

No stable value at all. No cash either. I own the Laudus - ok.
Laudus 25%
Calamos 25%
Vanguard 25% low cost key
Victory 25%
May be a bit conservative but market high right now. Key is to look to long term.

glenbrent · Answer

Vanguard 500 (Index fund) 33% to 66%
PIMCO Real Return D (Gov't Bond fund) 33% to 66%

Adjust to risk tolerance.  If you arent sure 50/50.

The vanguard fund invests in the 500 largest US stocks.  The bond fund invests in bonds issued by the us government.  

SPECIAL WARNING:

Don't even think about that foreign fund untill you are an advanced investor.  Do you know what currency risk is?

Anonymous · Answer

Check the "load" of the funds (the percentage / Points they charge for having an investment in them).  If any are over 1%, don't put any money in those.  That's too much to charge for a simple investment like these.  That info should be in the prospectus for the funds.

Assuming they are all below that threshold.  My advice (for what its worth) for your elections:

Put in at least your company's matching threshold and distribute as listed below.

Vanguard 500  40%
Laudus International  40%
Calamos Growth 10%
Victory Div. 10%

(Past performance does not guarantee future results) ;)

dcVixen · Answer

I have PEMCO (or similar can't remember the name exactly) so I'd suggest that, maybe throw some into an Index fund too.   I would put between 3-5% into it each paycheck... if you start out doing it you will never miss the money.  If you wait to do it several months after you start decide how much you can live without at the moment and let that determine if you put 3 or 5%.

Anonymous · Answer

At 22 avoid the bond funds like the plague.  
foreign large cap is ok for 25%
large cap value is ok for 25%
stable value is ok for 25%
where the heck is the small cap?   25%

Ovrtaxed · Answer

1.  Try to minimize investments in your own company (too many eggs in that basket)
2.  Spread your choices over at least 4 funds to get some diversity. 
3.  Choose the funds with low expenses.  (suggest less than 1.0% per year.)
4.  Make sure there is a lot of exposure to global or international investments.

hirebookkeeper · Answer

Diversify and put a little in several.  I like the Index Fund but that's just me.

ViVa La inDiA · Answer

hi

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Which investment elections should I choose for my 401k?

8 Answers