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advice needed
Old 01-28-2007, 11:07 AM   #1
Confused about dryer sheets
 
Join Date: Jan 2007
Posts: 6
advice needed

What a great site this is - a great group of people with lots of info. and experience. What I've learned is that I need to read and self educate on all this investment stuff. Meanwhile I would appreciate any advice, just to make sure we're not doing anything foolish.
I'm 33 yr and SO is 35yr, we have 2 kids , 4yrs and 6yrs old. Paid for the Pre-paid college when they were born.
Right now we have both IRA's in CD's- Roth has 12k and trad has 18k. They have only made just over 4 %. They mature in March when we will be adding 8k to the Roth (playing catch up from last year) and 4K to the Trad. We were thinking of putting them in 2035 fund. Is this smart or should we put them in bond b/c so all of our 401k is in stock funds, or leave them in CD's, but ones with better %?
The 401K is at 129k: 54% 2040 fund
13% company stock
13% company stock portfolio (starting this year we can take out 33% from the company stock and put it where we like)
10% 2015 Fund
5% fidelity magellan
5% 2025 Fund
On our statement it says the Fidelity Magellan is frozen.
After reading and liking the couch Potato Portfolio we were thinking putting half in a the 2040 fund and half in bonds except we only get a choice of 3 bonds - a real estate, a global company and a conserv fixed inc bond. Should we pick the global?
Any input would be helpful. I know a lot of people put up their info and I'm sure it gets boring reading these sorts of posts. So Thanks in advance!! Ironman
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Re: advice needed
Old 01-28-2007, 12:40 PM   #2
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Posts: 2,049
Re: advice needed

At your age, I would cut way back on the bonds. You need aggressive growth and you have enough bond exposure with the 2015 and 2025 funds. Put your addition contributions in a 2035+ fund (The 2035 holds 10% bonds.)

I would cut back on the company stock, as you've suggested. 26% of your 401k is too much.
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Re: advice needed
Old 01-28-2007, 01:10 PM   #3
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Posts: 899
Re: advice needed

My recommendations:

- Reduce company stock to the minimum.

- Sell Magellan. (Its glory years are long gone.)

- I don't recall anything in after tax savings. Build up an after tax emergency fund if you don't have one.

- Before picking funds determine where you want to be with regard to asset allocation. I agree with eridanus that at you age you should focus on equities but that is something that you need to decide based on your risk tolerance. In your position I would probably be something like 80% stock/20% bonds. I also like to have 5-10% in REITs but a lot of people think that this is a particularly poor time to buy REITs.
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Re: advice needed
Old 01-28-2007, 04:52 PM   #4
Confused about dryer sheets
 
Join Date: Jan 2007
Posts: 6
Re: advice needed

Thanks Eridanus and mb. I didn't know that about Fidelity. I have just transfered that and the 33% of the company stock into the 2040 fund. We do have 24k in a reg. savings, but we were thinking about puting it in a mutual fund. We also have a rental house that the renters are in the process of trying to buy. Fingers crossed they can get a loan, it would save us a lot of hassel not having to list it. The idea was to put the proceeds ( around 100k) towards our mortgage. This would bring our loan down to a much more comfortable 100K 20 yr loan. We've gone back and forth about investing the 100k instead of putting it towards the mortgage, but I'd hate to keep that 200k note. We'll wait and see how it all works out. If we have to list, it could be a while before we need to make that decision. The market has picked up a bit, but it's still slow around here. Thanks again.
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Re: advice needed
Old 01-28-2007, 09:35 PM   #5
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Re: advice needed

Quote:
Originally Posted by ironman
We do have 24k in a reg. savings, but we were thinking about puting it in a mutual fund.
Your after tax emergency money should be held in cash or near cash equiviants.

Quote:
Originally Posted by ironman
The idea was to put the proceeds ( around 100k) towards our mortgage. This would bring our loan down to a much more comfortable 100K 20 yr loan. We've gone back and forth about investing the 100k instead of putting it towards the mortgage, but I'd hate to keep that 200k note.
Depending on the interest rate of the mortgage (and other mortgage terms) you may be better off investing the proceeds from the sale of the rental house instead of paying down the mortgage.


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