401k investment strategy

[ATXFIRE2034]

I want to keep this simple. Is it better to invest my 401k dollars in target date fund or S&P? I am 39 and have no exposure to bonds today. Everything else is in IRAs and invested aggressively in VTI, ARKK and FTEC. I have a 16 year time horizon. My risk tolerance is high for now.

 

[38Chevy454]

Given your timeframe and high risk tolerance, I would go S&P at 100%. As personal example, i was 100% equities in my 401k/403b accounts until about 50 years age, then slightly more conservative to around 85/15. My current 70/30 A is still pretty high compared to many, although recent market results I am around 80/20 currently.


Just keep doing the pay yourself first and investing in the 401k. Ignore volatility, just keep putting money in each paycheck.

 

[crazyfire]

Given your timeframe and high risk tolerance, I would go S&P at 100%. As personal example, i was 100% equities in my 401k/403b accounts until about 50 years age, then slightly more conservative to around 85/15. My current 70/30 A is still pretty high compared to many, although recent market results I am around 80/20 currently.


Just keep doing the pay yourself first and investing in the 401k. Ignore volatility, just keep putting money in each paycheck.

when you say 100% equities...what do you mean? are you in a index fun like VTSAX? sorry for the newbie questions.

 

[Animorph]

when you say 100% equities...what do you mean? are you in a index fun like VTSAX? sorry for the newbie questions.

That would be no investment portfolio money in bonds, cash or other cash-like instruments (like CD's). Essentially all stocks or similar.

As for the OP, S&P 500 sounds more to your taste unless you want to be even more conservative. Hopefully both choices would be index funds with low expenses. No other interesting funds to choose from?

 

[ATXFIRE2034]

That would be no investment portfolio money in bonds, cash or other cash-like instruments (like CD's). Essentially all stocks or similar.



As for the OP, S&P 500 sounds more to your taste unless you want to be even more conservative. Hopefully both choices would be index funds with low expenses. No other interesting funds to choose from?

Not many good options to choose from unfortunately. I guess the main reason I’m even debating it is primarily because of how aggressive my other investments are. I’m comfortable with high risk given my time horizon but I do have this nagging feeling that is starting to creep in telling me to be a little more conservative. I’m feeling indecisive about it honestly.

 

[Sunset]

Not many good options to choose from unfortunately. I guess the main reason I’m even debating it is primarily because of how aggressive my other investments are. I’m comfortable with high risk given my time horizon but I do have this nagging feeling that is starting to creep in telling me to be a little more conservative. I’m feeling indecisive about it honestly.

If you are slightly thinking of being conservative, then look to see how the target date funds are composed. What percentage are allocated to bonds.

Then pick one (does not have to be your retirement date) that is acceptable to you. Given your long investment time, I'd only want 10->20% Bonds in my 401K target date fund.
As the years go on, the fund will increase the percentage of Bonds.

 

[ATXFIRE2034]

If you are slightly thinking of being conservative, then look to see how the target date funds are composed. What percentage are allocated to bonds.

Then pick one (does not have to be your retirement date) that is acceptable to you. Given your long investment time, I'd only want 10->20% Bonds in my 401K target date fund.
As the years go on, the fund will increase the percentage of Bonds.

I would probably go with the SSGA 2045 fund @ 11.26% bonds. The net expense ratio is .06% for the target date fund versus .01% for the S&P. Decisions, decisions....