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are you paying loads on A share classes? if the answer is yes, then don't invest, or invest in MS money market to get your company's match and leave it there. instead open a Roth IRA if you don't have one. if you max your Roth (5500/6500 for 2014 and same for 2015 could be contributed today), do it in a taxable account.
also, please find out what's ADP fee. i used to be invested into the small company 401K without a match and very fee heavy and years later, still can't recuperate from the lost performance. again, if there is no employer match, you're better off outside of that account.
...All of those "A" shares. A 401k is a retirement vehicle and so there should be no loads. If you're not getting an "LW" (load-waived") version of these funds, steer clear. Listen to "fundalarm" here. I don't know how employers can get away with this sort of thing.
great. -now find out about loads and fees (loads could be waived in 401k, but ADP quarterly service fee is either picked up by your employer or not. if not, and you are paying ADP from your balance, just do enough to receive the company match and invest outside of this plan.)
also, -how old are you and -do you have investments outside of this plan? (if yes, please list them with percentages)
this should help determine your overall asset allocation.
Country origin- India. Medium term outlook - to stay for 5 years or so in US and then back to native country.
Portfolio: Reasonable amount in the native country with real assets too. The equity allocation can be adjusted based upon the 401k selected funds. So, if I can select a US based equity fund, I can adjust my home allocation accordingly over time.
The overall idea is to have around 20% bond, 30% mid/small and 50% large cap, if possible. Otherwise, I can manage with a single decent fund here and rest outside.
The 4% match is the main point. If nothing else, I will use this to get a bond allocation, as you mentioned.
Gah, poor and idealistic advice most of this. Divide evenly among Invesco, Davis, Calvert, Oppen, Pioneer, Dreyfus, and that internatl thing. No more, no less. Put in as much as you feasibly can, get the max match, call it a day, do not check other than every six months, if that. That's it. Do not do any bonds @ 35yo. Do not worry about loads; you are not paying them. Do not worry about anything but getting a hefty portfolio going before you return home. These choices are okay. Do not let perfect be enemy of good. This advice is a lot of perfectionism. Just do it. You will wind up with a broadly diversified portfolio, US-tilted and heavy (that's okay; high percentage of SP500 income comes from foreign biz), and one that is more expensive than desirable, but so what. Get that match to the max.
@davidrmoran: Thanks for your advice. I understand that asset allocation is of primary importance, rather than the fund selection. So, I just wanted the views regarding if there are some big or small Yes funds or big/small No funds.
"When you don't know, diversify" is true.
@fundalarm: I will not let the employee match go away. Thanks once again.
I don't like your very limited choices. I'm assuming they are fund-specific, meaning that you can't buy one fund at the house and than transfer into a different fund a few months later? The only house there I'm familiar with is Oppenheimer Funds where I've held a small amount for couple decades. I would not recommend them to you. Their funds seem to me very inconsistent performers, with some racking-up market-beating numbers for a few years and than disappointing later on. While their (embedded) management fees are reasonable, they are still notably higher than for managers like T. Rowe Price, Vanguard, or Dodge & Cox.
Sounds like you are load-waived. If so, that's great. Check on that. In my old workplace plan we paid a reduced load, but it wasn't fully waived. (Loads are deceptive. They don't show up as an added charge. Instead, you pay a higher NAV when you purchase shares of the fund than without the load.)
@Maurice: The 5-year period is what I am looking at now. It can be extended or curtailed short - I cannot say at this point of time, but with the view available to me at present, that is the situation. I do get taxed and will get if I withdraw earlier, but the addition of employer contribution would be more than helpful.
Withdrawal in a non-earning year is an excellent idea. I would keep that in mind. Thanks.
I have selected the two MS funds (debt portion; short and intermediate), the Invesco fund, Davis and Wells Fargo funds in 10,10,40,20,10 percents.
Comments
Regards,
Ted
Sorry. Edited post with a different image host. ADP is the name of the 401k plan provider (if that is of any help).
Regards.
also, please find out what's ADP fee. i used to be invested into the small company 401K without a match and very fee heavy and years later, still can't recuperate from the lost performance. again, if there is no employer match, you're better off outside of that account.
Thanks for those inputs.
-now find out about loads and fees (loads could be waived in 401k, but ADP quarterly service fee is either picked up by your employer or not. if not, and you are paying ADP from your balance, just do enough to receive the company match and invest outside of this plan.)
also,
-how old are you and
-do you have investments outside of this plan? (if yes, please list them with percentages)
this should help determine your overall asset allocation.
Age: 35y
Country origin- India. Medium term outlook - to stay for 5 years or so in US and then back to native country.
Portfolio: Reasonable amount in the native country with real assets too. The equity allocation can be adjusted based upon the 401k selected funds. So, if I can select a US based equity fund, I can adjust my home allocation accordingly over time.
The overall idea is to have around 20% bond, 30% mid/small and 50% large cap, if possible. Otherwise, I can manage with a single decent fund here and rest outside.
The 4% match is the main point. If nothing else, I will use this to get a bond allocation, as you mentioned.
Regards.
I understand that asset allocation is of primary importance, rather than the fund selection. So, I just wanted the views regarding if there are some big or small Yes funds or big/small No funds.
"When you don't know, diversify" is true.
@fundalarm: I will not let the employee match go away. Thanks once again.
I would take a look at that NY Venture fund run by Chris Davis. He was a frequent guest on the old Rukeyser program in the 80s and 90s and left a good impression. Apparently, it is (or was) a family run business. Here's a link concerning that fund.
http://money.usnews.com/funds/mutual-funds/large-blend/davis-new-york-venture-fund/nyvtx
Sounds like you are load-waived. If so, that's great. Check on that. In my old workplace plan we paid a reduced load, but it wasn't fully waived. (Loads are deceptive. They don't show up as an added charge. Instead, you pay a higher NAV when you purchase shares of the fund than without the load.)
Regards
@Maurice: The 5-year period is what I am looking at now. It can be extended or curtailed short - I cannot say at this point of time, but with the view available to me at present, that is the situation. I do get taxed and will get if I withdraw earlier, but the addition of employer contribution would be more than helpful.
Withdrawal in a non-earning year is an excellent idea. I would keep that in mind. Thanks.
I have selected the two MS funds (debt portion; short and intermediate), the Invesco fund, Davis and Wells Fargo funds in 10,10,40,20,10 percents.
Dr. Dave,
You totally overlooked Davis?
No problem. The third time's the charm. Want another crack at it?
But tell us; what is your final, final, final regarding diversification?