Lux Investing
Investment Allocation for 2008 - Need Advice?
I need help determining my correct allocation. I have about 60K in a work 401K plan. Before last years election I took some gains off the table and invested 20K in cash and fixed income. The rest of my portfolio is split evenly amount smal caps, growth, and Foreign Investments. I have two questions. Assuming we get a bounce and the Dow holds at 12K is now the time to move money from cash into equities? My second question is at age 30 what should my target allocation be for 2008. How much in value, growth, and etc.. Any answer will be appreciated.
Public Comments
- Well you did well timing it but most investors don't fare that well... I would move into stocks 100% at this time if I were you, and I did this for my wife's 401k an hour ago. Up until 50-55 most people should stay in stock equities with a mix of US and Int'l IMO. Upto 10% bonds would be about right if you're more worried or conservative, but over the long haul you're better in stocks.
- Even if Dow holds at 12K its look like after 5 years of unbelivable rise in the markets. I would build very defensive portfolio 40% Gov bonds 40% Corp bonds 5% Stocks 5% commodities 5% Fx 5% free assets maybe 2009 will be better but stay out in 2008 its a real bear market and many people dont know what is it ! For the future dont invest in dow only diversified to many countries.
- Hi HotSauce, You really should post on a couple of sites that are dedicated to investment questions like yours. One I recommend is www.moneyrec.com, serious site for investors, good advice and free to users. Spam free. Also, morningstar.com. free board, but pay for other info. Just be specific- explain your financial situation and what you currently hold in your portfolio (moneyrec has a space for that) the more info you give, the more tailored your answer will be to your specific needs. Best of Luck to You! Bunny
- I have always been a proponent of a rather conservative investment strategy for 401k accounts. You are talking a very long term horizon even for the ripe age of 30. You still have 35 years to go. You already have a pretty nice chunk in your 401k. 20k in fixed income is not too bad expecially with the fed whacking interest rates making fixed income more valuable. But over the long term equities will beat that. Growth funds can be a real problem during times as now. They tend to get hammered. Small caps also. A more conservative strategy would be to go for core funds and some foreign funds. You did not mention whether your foreign was developed or developing. A reasonable allocation in my opinion would be 30% large cap core, 20% developed markets foreign, 20% fixed income, 15% foreign developing or less but certainly some, 15% small cap. Something along those lines.
- Instead of reading some good books or fully understanding what a "good" asset allocation is.... you're asking strangers what to do with your retirement money. Take the answers that you get & remember..... you don't know the qualifications or motives of those that answer you question. Besides, they know nothing about you. Good luck with this!
