Help with Creating Portfolio with Company Offering for 401k.

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Topic Author
fpt2015
Posts: 25
Joined: Sat Aug 08, 2015 11:01 pm

Help with Creating Portfolio with Company Offering for 401k.

Post by fpt2015 »

Hello,

I currently have 95% of my 401k contributions going into my employer's stock. My eyes started getting open and wanted to diversify my portfolio. I desire a 80% stock, 20% bond allocation. A few months back, I decided to have 100% of my future contributions going to State Street S&P 500 index fund but I still need to transfer out existing contributions that are still in company stocks.

Here is what the company offers:

Invesco Stable Value Trust Fund
Baird Aggregate Bond Fund
T. Rowe Price Value Fund
State Street S&P 500 Index Fund
T. Rowe Price Blue Chip Growth Fund
State Street S&P MidCap Index
DFA US Small Cap I
American EuroPac Growth R­4
State Street Conservative Strateg Bal
State Street Moderate Strateg Bal

What would you suggest picking out of these funds, maybe to mirror a 3-fund portfolio? I say maybe because the typical 3-fund may not be possible here. My wife works at the same company at least for the next couple years. I'm thinking whatever portfolio/asset allocation I choose she will mirror.

I'm open to any suggestion.

Thank you for your help.

Edit
Fund Name + Expense Ratio
----------------------------------
Invesco Stable Value Trust Fund - 0.27%
Baird Aggregate Bond Fund [BAGSX] - 0.55%
T. Rowe Price Value Fund [TRVLX] - 0.82%
State Street S&P 500 Index Fund - .0023%
T. Rowe Price Blue Chip Growth Fund [TRBCX] - 0.72%
State Street S&P MidCap Index - 0.052%
DFA US Small Cap I - [DFSTX] - 0.37%
American EuroPac Growth R­4 [REREX] - 0.85%
State Street Conservative Strateg Bal - 0.02%
State Street Moderate Strateg Bal - 0.02%
State Street Aggressive Strategic Balanced Fund Class I - 0.02%


I am 29, turning 30 very soon. Wife is 30.
We both have Vanguard Target Retirement 2035 [VTTHX] Roth funded to the max this year and plan on continuing to do that.

Edit - 12/26/2017
My 401k Balance: 20,080.10
Wife's Balance: 17,818.90
Last edited by fpt2015 on Tue Dec 26, 2017 8:21 pm, edited 2 times in total.
User avatar
Duckie
Posts: 9777
Joined: Thu Mar 08, 2007 1:55 pm

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by Duckie »

fpt2015 wrote:What would you suggest picking out of these funds, maybe to mirror a 3-fund portfolio?
I have some questions:
  • What are the plan expense ratios for the funds?
  • What is the Stable Value fund paying?
  • What other retirement plans do you and your wife have? IRAs? Taxable earmarked for retirement?
  • How old are you?
kerplunk
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Joined: Sun Apr 17, 2011 9:58 pm

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by kerplunk »

Doesn’t seem like a lot of choices for funds. The S&P 500 fund is probably what I would go with. Bond/international allocations in your IRA.
Topic Author
fpt2015
Posts: 25
Joined: Sat Aug 08, 2015 11:01 pm

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by fpt2015 »

Duckie wrote: Thu Dec 14, 2017 8:04 pm
fpt2015 wrote:What would you suggest picking out of these funds, maybe to mirror a 3-fund portfolio?
I have some questions:
  • What are the plan expense ratios for the funds?
  • What is the Stable Value fund paying?
  • What other retirement plans do you and your wife have? IRAs? Taxable earmarked for retirement?
  • How old are you?
Stable Value fund's YTD return is 1.27%. I edited my post to include answers to your other questions.
Topic Author
fpt2015
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Re: Help with Creating Portfolio with Company Offering for 401k.

Post by fpt2015 »

kerplunk wrote: Thu Dec 14, 2017 9:14 pm Doesn’t seem like a lot of choices for funds. The S&P 500 fund is probably what I would go with. Bond/international allocations in your IRA.
Ya, that's what I was thinking. Maybe the company does that intentionally. Most people at the company invest 100% of their contributions in the company stock.
Topic Author
fpt2015
Posts: 25
Joined: Sat Aug 08, 2015 11:01 pm

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by fpt2015 »

I'm really thinking about putting everything in the S&P fund. Anyone thinks I should do otherwise? Should thoughts on some coming market correction guide that decision?
kerplunk
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Joined: Sun Apr 17, 2011 9:58 pm

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by kerplunk »

The aggressive strategic balance fund may be of interest. It is 85/15. 18% of the equities are international.

https://www.401ksave.net/prsee/pdf/fund ... 1/CMT7.pdf
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badbreath
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Re: Help with Creating Portfolio with Company Offering for 401k.

Post by badbreath »

fpt2015

I'm really thinking about putting everything in the S&P fund. Anyone thinks I should do otherwise?

No that is a good idea
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx
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Watty
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Re: Help with Creating Portfolio with Company Offering for 401k.

Post by Watty »

fpt2015 wrote: Thu Dec 14, 2017 7:45 pm State Street Conservative Strateg Bal - 0.02%
State Street Moderate Strateg Bal - 0.02%
State Street Aggressive Strategic Balanced Fund Class I - 0.02%
What are in these?
fpt2015 wrote: Fri Dec 15, 2017 8:48 am I'm really thinking about putting everything in the S&P fund. Anyone thinks I should do otherwise? Should thoughts on some coming market correction guide that decision?
It would be better to make a three(+) fund portfolio using that and the mid-cap index fund in the 401k then have a small cap fund, international, and bonds in your Roth accounts.

Be sure to look at the asset allocation of all your retirement accounts combined.

https://www.bogleheads.org/wiki/Three-fund_portfolio

The amount int the 401k is important too.

Since you are only about 30 your retirement savings might not be all that high so a two fund portfolio of the S&P 500 in your 401k and Bonds in the Roth would not be a terrible choice since the amounts of the missing components would not be very big. For example if your retirement savings are $50K then in an idea portfolio you might want to have around $10,000 in international stocks and maybe $8,000 in small and mid-cap stocks. The tracking error between that and the S&P 500 will be modest in dollar terms so you could defer worrying about that until you have $100K in retirement savings and the differences would be more significant.
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ruralavalon
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Location: Illinois

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by ruralavalon »

fpt2015 wrote: Thu Dec 14, 2017 7:45 pm Hello,

I currently have 95% of my 401k contributions going into my employer's stock. My eyes started getting open and wanted to diversify my portfolio. I desire a 80% stock, 20% bond allocation. A few months back, I decided to have 100% of my future contributions going to State Street S&P 500 index fund but I still need to transfer out existing contributions that are still in company stocks.

Here is what the company offers:

Invesco Stable Value Trust Fund
Baird Aggregate Bond Fund
T. Rowe Price Value Fund
State Street S&P 500 Index Fund
T. Rowe Price Blue Chip Growth Fund
State Street S&P MidCap Index
DFA US Small Cap I
American EuroPac Growth R­4
State Street Conservative Strateg Bal
State Street Moderate Strateg Bal

What would you suggest picking out of these funds, maybe to mirror a 3-fund portfolio? I say maybe because the typical 3-fund may not be possible here. My wife works at the same company at least for the next couple years. I'm thinking whatever portfolio/asset allocation I choose she will mirror.

I'm open to any suggestion.

Thank you for your help.

Edit
Fund Name + Expense Ratio
----------------------------------
Invesco Stable Value Trust Fund - 0.27%
Baird Aggregate Bond Fund [BAGSX] - 0.55%
T. Rowe Price Value Fund [TRVLX] - 0.82%
State Street S&P 500 Index Fund - .0023%
T. Rowe Price Blue Chip Growth Fund [TRBCX] - 0.72%
State Street S&P MidCap Index - 0.052%
DFA US Small Cap I - [DFSTX] - 0.37%
American EuroPac Growth R­4 [REREX] - 0.85%
State Street Conservative Strateg Bal - 0.02%
State Street Moderate Strateg Bal - 0.02%
State Street Aggressive Strategic Balanced Fund Class I - 0.02%


I am 29, turning 30 very soon. Wife is 30.
We both have Vanguard Target Retirement 2035 [VTTHX] Roth funded to the max this year and plan on continuing to do that.
At ages 20 and 30 an asset allocation of 80/20 stock/bond is within the range of what is reasonable in my opinion.

Your best stock fund is the State Street S&P 500 Index Fund, ER 0.0023%.

I don't think it's a good idea to use that as your only fund in the 401k. Don't make the decision based on some "coming market correction" that may not happen, or may not be a big correction, or may not come soon. Invest with a long-term plan.

What is the return that has been paid on the Invesco Stable Value Trust? That might be good to use for a bond fund, if the rate is good enough. Otherwise you could consider Baird Aggregate Bond Fund (BAGSX) ER 0.55% for the bond allocation.

I would not use the one international stock fund offered, at 0.85% the expense ratio is just too high in my opinion. You might consider an international stock fund in the Roth IRAs.

What is the asset allocation in each of the 3 State Street Strategic Allocation funds ER 0.02%? One of those as an all-in-one fund by itself of might be your best choice if the asset allocation looks suitable.

What are the sizes of each account?

Please simply add any new information to your original post, it helps a lot if all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Duckie
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Re: Help with Creating Portfolio with Company Offering for 401k.

Post by Duckie »

fpt2015 wrote:I'm really thinking about putting everything in the S&P fund. Anyone thinks I should do otherwise?
State Street Moderate has an AA of 45/10/45. State Street Aggressive has an AA of 70/15/15. Your Roth IRAs have an AA of 48/31/21. If you want an 80/20 AA in the 401k then you could contribute 20% to Moderate and 80% to Aggressive and get a combined AA of 65/14/21. At 0.02% this would be the cheapest way to get it all (US stocks, international stocks, US bonds) in the 401k.
Topic Author
fpt2015
Posts: 25
Joined: Sat Aug 08, 2015 11:01 pm

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by fpt2015 »

Duckie wrote: Fri Dec 15, 2017 5:12 pm
fpt2015 wrote:I'm really thinking about putting everything in the S&P fund. Anyone thinks I should do otherwise?
State Street Moderate has an AA of 45/10/45. State Street Aggressive has an AA of 70/15/15. Your Roth IRAs have an AA of 48/31/21. If you want an 80/20 AA in the 401k then you could contribute 20% to Moderate and 80% to Aggressive and get a combined AA of 65/14/21. At 0.02% this would be the cheapest way to get it all (US stocks, international stocks, US bonds) in the 401k.
You got me giving a hard look at the StateStreet Agressive fund. I didn’t realize its potentials before. A bit more “agressive” in stocks but I haven’t been contributing that much to my 401k. Average of 5% a year. Maybe more exposure to stocks wouldn’t hurt.
Topic Author
fpt2015
Posts: 25
Joined: Sat Aug 08, 2015 11:01 pm

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by fpt2015 »

fpt2015 wrote: Tue Dec 26, 2017 7:51 pm
Duckie wrote: Fri Dec 15, 2017 5:12 pm
fpt2015 wrote:I'm really thinking about putting everything in the S&P fund. Anyone thinks I should do otherwise?
State Street Moderate has an AA of 45/10/45. State Street Aggressive has an AA of 70/15/15. Your Roth IRAs have an AA of 48/31/21. If you want an 80/20 AA in the 401k then you could contribute 20% to Moderate and 80% to Aggressive and get a combined AA of 65/14/21. At 0.02% this would be the cheapest way to get it all (US stocks, international stocks, US bonds) in the 401k.
You got me giving a hard look at the StateStreet Aggressive fund. I didn’t realize its potentials before. A bit more “aggressive” in stocks but I haven’t been contributing that much to my 401k. Average of 5% a year. Maybe more exposure to stocks wouldn’t hurt.
The Aggressive fund got updated as of September 2017.
Now, they seek 50% in US stocks, 25% in international stocks, 13% in real assets and 12% in US Fixed income.
Topic Author
fpt2015
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Joined: Sat Aug 08, 2015 11:01 pm

Re: Help with Creating Portfolio with Company Offering for 401k.

Post by fpt2015 »

Hello folks,
Any additional feedback on this?
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