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Need Help Picking My 401K Options
Old 01-16-2006, 07:01 PM   #1
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Need Help Picking My 401K Options

First of all, greetings to everyone. I am new here and plan on being around for a long time. I'm trying to take the right steps to have an early retirement and to have some nice money available when I retire.

However, I'm new to all of this. And while I have done alot of reading, there are still a ton of things that I don't fully understand yet.

Right now, I am faced with choosing which Investment Options to go with and what percentages for my job's 401K offering. I could certainly use a little help.

The page says my choices are:

Maxim Aggressive Profile II
Maxim Moderate Profile II
Maxim Conservative Profile II
Oakmark International II
American Funds EuroPacific R3
Oppenheimer Global A
Maxim Ariel Small-Cap Value
Maxim Index 600
STI Classic Small Cap Growth Fund I
Lord Abbett Mid-Cap Value A
Ariel Appreciation
Fidelity Advisor Mid Cap T
Maxim T. Rowe Price Equity Income
American Funds Wash Mutual R3
Maxim S&P 500 Index
STI Classic Capital Appreciation I
Marsico Focus
Oppenheimer Capital Appreciation A
Maxim Bond Index
Maxim Loomis Sayles Bond Portfolio
Maxim US Government Mortgage Securities
PIMCO Total Return Admin
Guaranteed Portfolio Fund


Of course it says it needs to total 100%.

Can someone please give me some ideas as to what is good and what percentages to list ?

I asked a few other places and it seems it's a question nobody wants to answer. I know it is investing and maybe people don't want to feel like they're gonna make you lose money but....

I just want to know what to go with since I have no idea and they need me to turn this in within the next 2 days.

I appreciate it.
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Re: Need Help Picking My 401K Options
Old 01-16-2006, 07:27 PM   #2
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Re: Need Help Picking My 401K Options

http://www.fundadvice.com/401k-help/...duction-2.html

is some more reading.

Many 401(k) plans allow you to change percentages at just about any time. So any decision you make now can be changed next week or next month or whenever. My plan and my spouse's plan allow us to login online and make changes.

Rather than suggest percentages for you. Why not spend this evening reading some more and then post what you've picked and justify why you picked those?

Dart-throwing is a justification but not one I would use, especially after reading the link I gave you.
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Re: Need Help Picking My 401K Options
Old 01-16-2006, 07:30 PM   #3
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Re: Need Help Picking My 401K Options

Thanks I'll take a look at that link right now and report back here shortly.
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Re: Need Help Picking My 401K Options
Old 01-16-2006, 07:36 PM   #4
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Re: Need Help Picking My 401K Options

Most funds have a one page summary you can read, so you don't have to wade through the prospectus (sp?).

TIP: look at the expense ratios, a good place to park your money while you are learning (and in my opinion, even after you have learned) is index funds, like an S&P 500 index. I make that ~33% of my portfolio. But check the expense ratio and make sure they aren't overcharging you (should be substantially less than 1%). Actively managed fund choices should still not exceed 1% unless you really know what you are buying and believe in it.

How old are you? How willing to take risk are you?
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Re: Need Help Picking My 401K Options
Old 01-16-2006, 08:47 PM   #5
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Re: Need Help Picking My 401K Options

I'm 34. I guess I would consider myself to be a moderate risk taker. I don't want to end up ina position where all of a sudden my entire retirement fund is gone from taking some huge risk.

You say I can read a 1-page summary of all these funds ? Where ? Because I just went to Morningstar.com and tried searching each fund's name. However, when you click on any of the results, you only get taken to a page of them trying to scam money from you.

Is there some place that I can put in the names of all these funds and get a expert opinion on them ? Or is that what Morningstar is for ? Is that information that I "should" have to pay for ?

I signed up for a free Morningstar account but I can't do or search anything without being directed to a page to pay.

Thanks again.
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Re: Need Help Picking My 401K Options
Old 01-16-2006, 09:24 PM   #6
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Re: Need Help Picking My 401K Options

What can you tell us about the 'aggressive, moderate and conservative' profile funds...whats in them? Might be a good one-stop shopping spot for your money. Should have a balance of stocks and bonds that 'self balance' themselves. Investing autopilot. I'm going to guess that the 'moderate' fund would be good for a moderate risk taker, but lets see whats in all three. What you consider 'moderate' may not be that moderate at all!

If nothing else, one of these bundle funds might be good until you get some reading in and want to twist the dials yourself...or might still be good even after you get more expertise.

Quicken's site and microsofts moneycentral are good places to look up funds and fund information, for free, but you wont get a lot of 'expert' analysis without paying someone to give you probably bad and most likely dated information about your funds...
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Re: Need Help Picking My 401K Options
Old 01-16-2006, 10:05 PM   #7
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Re: Need Help Picking My 401K Options

investor.msn.com has a great fund screener and information.* I think it is better than Yahoo finance and many others.* Simply enter the fund ticker symbol in the quote field and then click around "fund snapshot" is the one page.* msn.com has most of the morningstar stuff.

You will probably want to end up with
25% large cap blend or value
25% international
25% mid/small cap value
25% short/intermediate term bonds.

for now.* So which funds would fit that? Some of the funds you listed are similar, so pick the ones with low expense ratios, no loads and 4 or 5 star Morningstar ratings.* You could also look at 3, 5, 10 year returns and Sharpe ratio.* I'll assume you pay no loads in your 401(k).

Without going to look up any info myself, you might end up with 25% in each of the following funds:
Oakmark International, Ariel Small Cap Value, Maxim S&P500, PIMCO Total Return.

Here is a link showing the PIMCO snapshot: http://moneycentral.msn.com/investor...bol=US%3APTRAX
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Re: Need Help Picking My 401K Options
Old 01-17-2006, 06:08 AM   #8
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Re: Need Help Picking My 401K Options

I would probably key in on the index funds offered. How much of a match does your plan offer and how much of your assets will the 401k be and do you plan to max out the plan? Some people have reported lousy plans and just contribute up to the match, do a roth, and then contribute to taxable investments. People that want to retire early probably want some taxable investments anyway.
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Re: Need Help Picking My 401K Options
Old 01-18-2006, 08:57 PM   #9
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Re: Need Help Picking My 401K Options

Hey chill,

You don't need to sign up at Morningstar.com, you just need to realize what's free and what's not. For example, your Maxim Aggressive Profile II is just a fund of funds that charges 1.30% in total.

You can just put the name of the fund into the "quote" box, then hit return, and click on the link that comes up. You can click on the links to the left [grey buttons] to see stuff like a breakdown of expenses, portfolio makeup, etc. Note that some of the funds charge extra fees like 12b-1 fees which you should avoid like the plague [hint: American Funds, usually any Class A funds]

Here are links to the funds:

Maxim Moderate Profile II
Maxim Conservative Profile II
Oakmark International II
American Funds EuroPacific Gr R3
Oppenheimer Global A
Maxim Ariel SmallCap Value
Maxim Index 600 Portfolio
STI Classic Small Cap Growth Stock I
Lord Abbett Mid-Cap Value A
Ariel Mid cap
Fidelity Advisor Mid Cap T
Maxim TRP Equity Income
American funds Wash Mutual R3
Maxim S&P 500 Index
STI Classic Capital Appreciation I
Marisco Focus
Oppenheimer Capital Appreciation A
Maxim Bond Index
Maxim Loomis Sayles bond
Maxim U.S. Government Mortgage Secs
Pimco Total Return Admin

You could also go with equal %'s in Maxim S&P 500 [large cap], Maxim S&P 600 [small cap], Oakmark Int'l [int'l], and Pimco total return [bond]. easy.

- Alec
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Re: Need Help Picking My 401K Options
Old 01-18-2006, 09:35 PM   #10
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Re: Need Help Picking My 401K Options

I looked at a couple of the "profile" funds. What Alec said. Rolling your own from the suggestions he provides would be better than what most "experienced investment professionals" end up doing, and better than 99% of people who have no experience. Wait, maybe thats the other way around.

Alec's advice is usually spot on. You should closely examine anything I say as I used to be in sales.
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