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Can you help me, help my brother with his 401k?
Old 04-13-2007, 08:25 PM   #1
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Can you help me, help my brother with his 401k?

He's 30 years old about 135k in it, but his company has recently opened up some new funds, and he would like to know where you think his money should go...

Here are the funds...
Fido Internationl Discovery (FIGRX)
Wells Fargo Mid Cap (SMCDX)
Rainier Small Mid Cap Equity (RIMSX)
Fido Balanced (FBALX)
Fidelity Equity Income II (FEQTX)
River Source Value A (AVLAX)
Fido Puritan (FPURX)
Fido Growth and Income (FGRIX)
Fido Spartan Equity INdex (FUSEX)
plus all of the Fido Freedom funds

Any suggestions?
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Re: Can you help me, help my brother with his 401k?
Old 04-13-2007, 08:59 PM   #2
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Re: Can you help me, help my brother with his 401k?

HArd to go wrong with Puritan, even though it isn't the cheapest on the list.
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Re: Can you help me, help my brother with his 401k?
Old 04-13-2007, 11:18 PM   #3
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Re: Can you help me, help my brother with his 401k?

I would go with an asset allocation model. Since he's young, perhaps most or all of it in the index fund unless he's risk averse. Index funds have lower fees. Check which index it follows. If the S&P, that's pretty diversified already. May want to add a small amount (10-20%) of international funds also.

Good luck.
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Re: Can you help me, help my brother with his 401k?
Old 04-13-2007, 11:58 PM   #4
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Re: Can you help me, help my brother with his 401k?

The Fidelity Spartan Index is an S&P500, with Vanguard/ETF rivaling expense ratio of .09%. The International Discovery Fund has 5 stars from M*, a good track record, and reasonable ER of 1.0% for an international fund. If he is risk adverse the Puritan fund will be less volatile.

For whatever reason the Fido Freedom Funds aren't rated that highly.
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Re: Can you help me, help my brother with his 401k?
Old 04-14-2007, 01:21 PM   #5
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Re: Can you help me, help my brother with his 401k?

An index is a good base. A small international portion would provide some diversification. It is a little late in the cycle for small/mid and value, and lower beta funds, but some increased weighting in them is desirable long term. Look for lower expense and turnover ratios. Compare compound returns (value of 10000 after 10 years) rather than simple returns. I assume he has more than 20 years, so I would go at least 80% if not 100% equities.
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