Can somebody help me with my 403 B asset allocation?

Question

I just enrolled in the 403B offered by the company I'm working with. I earn 2000 bi-weekly and I contribute 20% of it with a match from my employer. I made the following allocations:

STOCK INVESTMENTS

Large cap: Janus Twenty Fund------>25%

Mid cap: Alger Mid Cap Grth I------->20%

Small cap: NB Genesis TR----------->35%

BOND INVESTMENTS

Fidelity strategic income---------------->3%

Vang GNMA ADM------------------------->7%

SHORT-TERM INVESTMENTS

Fidelity SEL Money market------------>10%

My question is:

1. Did I make the right allocations?

2. I am 24 years old and single. Is 20% of my salary too much for my contribution?

Pls help me

Answer 1

For your age you probably don't need to invest in the money market unless you think the market is going down.  GNMA I would stay away from since they invest in mortages and they have interest rate risks.  The federal reserve will probably raise rates in the next year or so.  If you want to invest in bonds, GNMA's or MM probably only need to invest 10% of your portfolio.  

Your goal since your young is growth and appreciation not income!

I don't particular like your choices in the mutual funds - however the mix of small, mid-cap and large cap is good! If these are your only funds you might want to only do 10% and either invest your other 10% in a cash account and or Roth IRA.  I like Vanguard funds for their low expense ratios!

Look into the expense costs of your 403B - I bet the costs are fairly high which will take away from your long term performance.  However - congrads on starting your retirement fund - that's a good first step!