Someone please remind me i do not need 2 balanced funds in 1 401k

[badatmath]

Overthinking again. . . but its not like I have any proof one will do better in future and one costs more than the other!

Seems to be a new habit for me lately.

 

[pb4uski]

ok.... you do not need 2 balnaced funds in 1 401k.

Happy?

 

[OldShooter]

It depends completely on what the equity investing style of the funds is. If is the same, then you probably don't need both. If not, it depends.

It may also depend on the fixed income style, but here they are more likely to be similar, so it won't be a factor.

 

[COcheesehead]

Are they truly balanced or are they allocation funds?

 

[badatmath]

One was a target date fund other is just balanced and won't diminish equities at a certain date. I am just feeling uncertain. . . It was a really bad day at w*rk. . .

 

[DrRoy]

So drop the higher fee one.

 

[OldShooter]

So drop the higher fee one.

This probably works because passive funds tend to have lower fees. I would be a little wary, however, if both equity tranches are stock-picker funds. Then you really have to look in the box and see what you own. You might be better off keeping both or ditching both and using another fund that is passive and lower fees.

This is why I don't do funds that have both equities and fixed income. I understand that they are desirable for some people, but having limited visibility to the equity portion's performance and less control of the style just does not sit well with me.

Another thing to be aware of is fees. I've heard that there are some 401Ks out there with rapacious fees. If that's the case here, you should probably contribute enough get the full employer match, but then do the rest of your saving in IRAs or Roths elsewhere.

Nothing is simple.

 

[fritz]

I use a Wellesley and Wellinton balanced fund combination to change up my stock to bond ratio. This gives me aro. 50/50 stock to bond w/o having to rebalance too often (actually haven't rebalanced since setting this up 9 years ago). Chose this at retirement as wife has absolutely no interest in managing investments (and I probably won't realize when I'm no longer the best person to be managing them). This should get us/her to passing them along (with decent returns) when no longer needed.

I'm also using VG's Tax Managed Balanced in combination with Tax Managed Capital Appreciation for stock to bond ratio aro. 75/25 to minimize rebalancing.

Retired at 58/57. Live on SS and investments only (no pensions, annuities). Mix is of taxable, Roth, and IRA.

 

[Red Badger]

This probably works because passive funds tend to have lower fees. I would be a little wary, however, if both equity tranches are stock-picker funds. Then you really have to look in the box and see what you own. You might be better off keeping both or ditching both and using another fund that is passive and lower fees.

This is why I don't do funds that have both equities and fixed income. I understand that they are desirable for some people, but having limited visibility to the equity portion's performance and less control of the style just does not sit well with me.

Another thing to be aware of is fees. I've heard that there are some 401Ks out there with rapacious fees. If that's the case here, you should probably contribute enough get the full employer match, but then do the rest of your saving in IRAs or Roths elsewhere.

Nothing is simple.

+1.

Just reviewed 401K with DS. I did not like the fees, nor the very limited choices. So, I'm going to help him set up an IRA for investments above what is needed to get company match.

Humorous sidebar... I was having difficulty getting DS to "buy into" financial / investment education. A couple months ago, he saw the commercial "I'm 85 and I want to go home." After that, he's drinking the FI kool-aid.

 

[ERD50]

ok.... you do not need 2 balnaced funds in 1 401k.

Happy?

To elaborate

You don't even need 1 balanced (ooops, "balnaced") fund in your 401K.

Why not get one broad based stock index fund, and one broad based bond index fund, in amounts to match your overall AA (including your entire portfolio). You might want 100% bond fund in your 401K, if you meet your AA with stock funds in other accounts.

-ERD50

 

[rodi]

ok.... you do not need 2 balnaced funds in 1 401k.

To elaborate

You don't even need 1 balanced (ooops, "balnaced") fund in your 401K.

fixed it.

 

[badatmath]

Yeah limited choices. . . .