Quote:
Originally Posted by lewdog
DaFace, this is for you!
My 401k is in the following funds. I recommend index funds for 401k's since generally the expense ratios are super low. It really depends on what your company offers. The company I was with before this had absolutely crap fund options, all mutual funds and very expensive. I was so happy when the new company had tons of Vanguard options.
Vanguard 500 Index Fund - Admiral Class (awesome fund if you have access)
Vanguard Mid-Cap Index Fund - Admiral Class
Vanguard Small Cap Index Fund - Admiral Class
American Century Emerging Markets Fund - Class R6
Expense ratios of .04, .05, .05 and .91 respectively. I am invested 70% in the 500 index and 10% in the rest.
5 year rate of return on these funds is 16.26, 14.60, 14.97, 6.91. I have seen others discuss possibly dropping international exposure as it appears it lags US stocks for decades now for many funds when dollar cost averaging.
100% equities for me given that I am 35. I am not pulling for a market downturn but it would benefit me long term to see a very strong downward move where I just keep investing in these passive funds (maybe even more so).
I have T Rowe Price for my ROTH IRA and they are a bit more expensive for actively managed funds. But many have done very well and I can diversify a bit with 2 funds I like from them, one being a communication/tech fund and one being health sciences.
Expense ratios for the 5 actively managed I have with them range from .68 to .80. Their 5 year rate of returns have been better than my 401k, however. 24.08, 25.89, 20.48, 18.46, 15.05.
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I'm a little more conservative (shocking, I know), so I've kept things fairly balanced. I mainly focus on expense ratios, and I'm in the Schwab ecosystem at least for now, so for a long time I was doing roughly:
60% SWTSX - Total Stock Market Index (0.03% ER)
20% SWISX - International Index (0.06% ER)
20% SWAGX - Aggregate Bond Index (0.04% ER)
After a while, though, I just realized that I just don't have much interest in putting a ton of thought into it (again, shouldn't be a surprise based on this thread). So with an interest in getting a little more diversification without having to think much about it, I'm mostly in this at this point:
SWYMX - Target 2050 Index (0.08% ER)
For other people who are lazy like me, I feel like index target date funds are a nice option. They take little to no thought and start out fairly aggressive (around 15% bonds 30 years out from the target date), then automatically shift to being more conservative as the date approaches. They also bring in a little real estate and emerging markets exposure, which I wasn't getting with my three-fund portfolio. And while it obviously makes the most sense to pick a target date for when you want to retire, you can kind of tweak the formula for how aggressive you want to be by bumping back the date a little further if you wish.
Anyway, no one is ever going to be excited by my approach, but every time I see people post about their portfolio's performance, and I compare it to mine, I'm always right there in the mix, which is all I'm looking for. I care far more about long-term consistency than I do about being at the top of the chart every time.