What should I do with my 401k allocations due to the current stock market volatility?
When I signed up for my company’s 401k plan, there was a little survey thing that I filled out based on age, retirement age, etc, and it basically told me what funds to invest in and at what percentage. I am concerned now as I have lost apporximately 20% of my total value in the past couple of weeks. My question is two-fold, firstly, should I just leave my current funds as is, or should I reallocate to different funds and at what amounts? I do not want to close my 401k altogether, and would only consider that as a last resort option. I do, however, want what little savings I have accumulated in the past few years to not vaporize before my eyes. I am 24 years old, so retirement is not anytime soon, but I still have my concerns.
My current 401k Portfolio:
BlackRock Total Return Fund 5%
Van Kampen Equity and Income Fund 15%
MFS Value Fund 10%
BlackRock Large Cap Core Fund 15%
BlackRock Large Cap Growth Fund 15%
BlackRock Mid-Cap Value Equity Portfolio 5%
BlackRock International Value Fund 20%
MFS International New Discovery Fund 10%
Oppenheimer Small & Mid Cap Value Fund 5%
Additional Funds available through my 401k Plan:
Merrill Lynch Ready Assets Trust
BlackRock Government Income Portfolio
Van Kampen Growth and Income Fund
Alger LargeCap Growth Fund
Alger MidCap Growth Fund
Delaware Trend Fund
Comments
At your age, and considering these funds are for retirement, which for you is a very long way off, you will be better served leaving things the way they are.
Retreating from stocks right now will almost certainly be a mistake in the long run. And in fact if you did dump all your stocks, you will probably decide to jump back in once the market rises by 10-20%. This will lose you 10-20%. So why do it?
If you were just looking to "tweak" things a little, I’m not sure that I would change much. You have nice diversification over small/mid/large cap and a nice chunk of international exposure.
May 28th, 2010 at 7:53 pm
I hope you read my e mail and get some good out of it.