How's this 401k allocation look to you?

Question

Specialty--15%

International--20%

Small Cap--7%

Mid Cap--8%

Large Cap--15%

Bond--33%

Money Market--2%

23 years to retirement.

Answer 1

This is a global market, consider up to 1/3 of your investments in international markets, not specific countries, simply internationally. If it were me, and I'm 6 years older than you, I would have more money in the small to mid cap growth and value stocks. You're bond percentage may be paying you in the short term right now, but it will haunt you down the road (as you will miss the stock rebound), I think you are way too heavy in bonds.

Answer 2

This looks pretty good to me. You have obviously thought about your allocation a bit, which is why you can break it down as you do. Plus, you also include very important information such as when you need the money and what your risk tolerance is. When I read something like this, I am inclined to trust your judgment which seems to work for you.

As for an objective view, I might not suggest the exact same allocation, since you do have a fairly large allocation to "Specialty" which one would normally expect to see in large caps. But you counterbalance the additional risk you get from "Specialty" with a fairly large allocation to bonds, which historically have lower risk.

There are many answers for a "correct" asset allocation. Yours is definitely a good answer.

Answer 3

sounds good however that also depends on how much your making and what youve already put away and if they have matched anything

Answer 4

It really depends on you!  I would have less in "specialty", around 8%, less in bonds & more in Large Cap.  I'm also inclined to do something like 15% in mid cap and 5% in small cap.   International at 20% - 30% is good.

This all depends on your risk tolorence.   One thing though.... this is more important than which funds you go into... so it's great you're approaching your investing this way.

WARNING:  The "Specialty" could really hurt you. You must follow & have a "mental stop".  These mutual funds can turn on a dime (look at technology funds only from 2000 - 2002, many lost 50% or more).  Regular mutual funds will move in and out of a sector... specialty funds can't!!!!!!!!!

Answer 5

It seems that you have a good start.  It looks conservative for your age and amount of time to work, but I give you credit for having some plan.  You could raise your risk/reward ratio by lowering the amount in bonds and going more into the stock side.  But overall, a good start.

Answer 6

1/3 in bonds seems like a lot for someone with over 20 years to retirement, but, you have to be able to sleep at night.  If youre not comfortable with more volatility than that, then thats what you should do.