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Asset Allocation Help
Old 01-09-2008, 07:34 PM   #1
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Asset Allocation Help

I'm 24 and want to get advice regarding my 401k asset allocation.

I currently have the following:
Fidelity Contrafound -20%
Fidelity Diversified International -20%
Fidelity Advisor Freedom 2050 Fund -20%
Vanguard Mid-Cap Index Fund;Institutional -20%
Vanguard Small-Cap Index Fund;Institutional -20%

I am thinking of changing it to the following:
Vanguard Total International Stock Index Fund;Investor -30%
Fidelity Diversified International -10%
Vanguard REIT Index Fund;Institutional - 10%
Vanguard Mid-Cap Index Fund;Institutional -30%
Vanguard Small-Cap Index Fund;Institutional -20%

What do you think? Also feel free to give me other assets to look into as I'm open for suggestions.

TIA!
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Old 01-09-2008, 09:26 PM   #2
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Looks ok for your age. Maybe a small amount in a commodities ETF for good measure.
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Old 01-09-2008, 09:33 PM   #3
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Quote:
Vanguard Total International Stock Index Fund;Investor -30%
Fidelity Diversified International -10%
Vanguard REIT Index Fund;Institutional - 10%
Vanguard Mid-Cap Index Fund;Institutional -30%
Vanguard Small-Cap Index Fund;Institutional -20%
This Fidelity Diversified International fund seems to a duplicate of the total International Fund. How about replacing it with Vanguard Emerging Market fund?
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Old 01-09-2008, 10:11 PM   #4
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What happened to US large cap? You are ignoring 35% of the world market by avoiding US large cap.
Check out: Asset allocation tutorial?
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Old 01-09-2008, 11:39 PM   #5
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Spanky, yeah Fidelity Diversified International fund is a definite duplicate and I'll take it out. However, I can't invest in Vanguard Emerging Market fund since my company doesn't offer it. Which would you recommend from the list below to replace the 10% instead of the Fidelity Diversified International fund and why?

LOL!, That's a good point you bring. Perhaps I can invest less in Vanguard Total International Stock Index Fund;Investor and Vanguard Mid-Cap Index Fund;Institutional and put 10-15% in US large cap. In which case which of the following from the list below would you recommend and why?


List:
Asset Allocation
Fidelity Freedom 2000 Fund
Fidelity Freedom 2010 Fund
Fidelity Freedom 2020 Fund
Fidelity Freedom 2030 Fund
Fidelity Freedom 2040 Fund
Fidelity Freedom 2050 Fund
Fidelity Freedom Income Fund
Fixed Income
Vanguard Admiral Treasury Money Market Portfolio
PIMCO Stable Value Fund
PIMCO Total Return Fund
Vanguard Total Bond Market Index Fund
Stock - (Growth/Income)
Fidelity US Equity Index Commingled Pool
Longleaf Partners Fund
LSV Value Equity Fund
Vanguard Mid Cap Index Fund
Vanguard Small Cap Index Fund
Vanguard REIT Index Fund
Stock - (Growth)
Fidelity Contrafund
Fidelity OTC Portfolio
Harbor Capital Appreciation Fund
Marsico Growth Fund
Royce Opportunity Fund
International - (Stock)
American New Perspective Fund
Fidelity Diversified International
Templeton Emerging Markets Fund
Vanguard Total International Stock Index Fund
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Old 01-10-2008, 05:13 AM   #6
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I believe the Fidelity US Equity Index commingled pool is the equivalent of the Vanguard Total Stock Market. Assuming it has low <.1% expense ratio. I'd use it as core fund with 40% 30% Vanguard Total International Stock Index and the remaining 30% allocated pretty much as you had suggested 10% REIT, 10% Small Cap, and 10% something else.

Also even though Contra is active fund it has a very good track record and somewhat lives up to its name. Morningstar gave the ContraFund Manager of their award for manager of the year (2007) this week. So I wouldn't rush to bail out of it.

Check back in 20 or 30 years and if I'm still around I'd suggest move something into bonds.

Congratulation for saving at such a young age.
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Old 01-10-2008, 08:22 AM   #7
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Quote:
Originally Posted by phatrabbitzz7 View Post
Spanky, yeah Fidelity Diversified International fund is a definite duplicate and I'll take it out. However, I can't invest in Vanguard Emerging Market fund since my company doesn't offer it. Which would you recommend from the list below to replace the 10% instead of the Fidelity Diversified International fund and why?

LOL!, That's a good point you bring. Perhaps I can invest less in Vanguard Total International Stock Index Fund;Investor and Vanguard Mid-Cap Index Fund;Institutional and put 10-15% in US large cap. In which case which of the following from the list below would you recommend and why?


List:
Asset Allocation
Fidelity Freedom 2000 Fund
Fidelity Freedom 2010 Fund
Fidelity Freedom 2020 Fund
Fidelity Freedom 2030 Fund
Fidelity Freedom 2040 Fund
Fidelity Freedom 2050 Fund
Fidelity Freedom Income Fund
Fixed Income
Vanguard Admiral Treasury Money Market Portfolio
PIMCO Stable Value Fund
PIMCO Total Return Fund
Vanguard Total Bond Market Index Fund
Stock - (Growth/Income)
Fidelity US Equity Index Commingled Pool
Longleaf Partners Fund
LSV Value Equity Fund
Vanguard Mid Cap Index Fund
Vanguard Small Cap Index Fund
Vanguard REIT Index Fund
Stock - (Growth)
Fidelity Contrafund
Fidelity OTC Portfolio
Harbor Capital Appreciation Fund
Marsico Growth Fund
Royce Opportunity Fund
International - (Stock)
American New Perspective Fund
Fidelity Diversified International
Templeton Emerging Markets Fund
Vanguard Total International Stock Index Fund
This is only worth what you're paying for it, but from your options:

Fidelity Diversified International - 30%
Fidelity Contrafund - 10%
Vanguard Total Bond Market Index Fund - 10%
Fidelity US Equity Index Commingled Pool - 25%
Vanguard Mid Cap Index Fund - 10%
Vanguard REIT Index Fund - 5%
Templeton Emerging Markets Fund - 10%
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Old 01-10-2008, 08:25 AM   #8
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Quote:
Originally Posted by phatrabbitzz7 View Post
I am thinking of changing it to the following:
Vanguard Total International Stock Index Fund;Investor -30%
Fidelity Diversified International -10%
Vanguard REIT Index Fund;Institutional - 10%
Vanguard Mid-Cap Index Fund;Institutional -30%
Vanguard Small-Cap Index Fund;Institutional -20%
No U.S. large cap?

I'd take about 10% away from your international allocation and 20% away from your small cap/mid cap allocation and put that 30% into large cap U.S. such as an S&P index fund or other U.S. large cap option.
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Old 01-10-2008, 08:51 AM   #9
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Quote:
Originally Posted by phatrabbitzz7 View Post
I'm 24 and want to get advice regarding my 401k asset allocation.

I currently have the following:
Fidelity Contrafound -20%
Fidelity Diversified International -20%
Fidelity Advisor Freedom 2050 Fund -20%
Vanguard Mid-Cap Index Fund;Institutional -20%
Vanguard Small-Cap Index Fund;Institutional -20%

I am thinking of changing it to the following:
Vanguard Total International Stock Index Fund;Investor -30%
Fidelity Diversified International -10%
Vanguard REIT Index Fund;Institutional - 10%
Vanguard Mid-Cap Index Fund;Institutional -30%
Vanguard Small-Cap Index Fund;Institutional -20%

What do you think? Also feel free to give me other assets to look into as I'm open for suggestions.

TIA!
Did I miss something, or did you remove large cap US stocks from the allocation? I would rethink and make sure you have around 20-40% US large cap stocks.

My allocation is
43% Domestic Large Cap
15% Domestic Mid Cap
15% Domestic Small Cap
15% International Large Cap
10% International Small Cap
2% bonds (domestic and international held in a fund of funds)

I think ignoring large caps at any age is not a good idea.
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Old 01-10-2008, 08:59 AM   #10
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Originally Posted by tightasadrum View Post
This is only worth what you're paying for it, but from your options:

Fidelity Diversified International - 30%
Fidelity Contrafund - 10%
Vanguard Total Bond Market Index Fund - 10%
Fidelity US Equity Index Commingled Pool - 25%
Vanguard Mid Cap Index Fund - 10%
Vanguard REIT Index Fund - 5%
Templeton Emerging Markets Fund - 10%
Is there a reason why you picked Fidelity Diversified International over Vanguard Total International Stock Index Fund;Investor?

Ziggy29 and jiMOH, I'm def. rethinking and plan on allocating 20-40% in US large cap, just trying to figure out what to do with the rest.
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Old 01-10-2008, 09:58 AM   #11
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Quote:
Originally Posted by phatrabbitzz7 View Post
Is there a reason why you picked Fidelity Diversified International over Vanguard Total International Stock Index Fund;Investor?
Yes there is, but not a very good reason. I have owned the Fidelity Diversified International Fund -for years, started within a 401K and I kept it when I rolled things over to an IRA. On average it has done well.

Having said that, you may want to compare the expense ratios and the performance of both and decide on that basis yourself. The main thing is to have an international component in equities. And you'll have to decide if you want an actively managed fund or an index fund.

I left the Contrafund in for the same reason, I own it too, and it's also done well. No other reason. Those who obsess over finding the lowest expense fund will certainly not agree with my including managed funds.

Hey, I said the information was only worth what you're paying for it.
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Old 01-10-2008, 03:39 PM   #12
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K, so from all the replies and researching the matter I came to the following selections:

Fidelity US Equity Index Commingled Pool 25%
Vanguard Total International Stock Index Fund;Investor -30%
Vanguard REIT Index Fund;Institutional - 5%
Vanguard Mid-Cap Index Fund;Institutional -10%
Fidelity Contrafund 10%
Templeton Emerging Markets Fund - 10%
Vanguard Total Bond Market Index Fund - 10%

I guess only time will tell if it's a wise decision or not.
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