401k help

[ourfirsthome]

I am 28 married, wife 26 and 1 baby on the way. I am contributing 3% matched and 1% unmatched with my company to a 401k. Wondering if what I am doing is on track or if I should change things around. I am really clueless when it comes to my 401k and rollover and could use some help with getting me on the right track. Here is what I see when I log into my 401k website.

Current 401K with company:

25.10% - PIM TOTAL RT INST
21.79% - DODGE & COX INTL STK
12.97% - SPTN 500 INDEX INST
10.55% - FID CONTRAFUND K
10.06% - VANG WINDSOR ADM
9.82% - DREY OP MIDCAP VAL I
5.00% - MIP II CL 1
4.71% - TRP GROWTH STOCK
-------
100%

ROLLOVER IRA

FIDELITY ASSET MANAGER 70%

[jIM_Ohio]

Solve this a different way.

Decide if you want to invest in 80% stocks and 20% bonds, 60-40, or 40-60

Each portfolio has its pros and cons

Then decide how much large cap, small cap, foreign and government holdings you want.

An 80-20 mix might have 25% small and mid cap stocks, where a 40-60 might only have 10% to same asset class.

Decide the overall portfolio first, then drill down to specific asset classes.

Then look up the holdings of each fund in 401k (is it a large cap fund or small cap fund?)- the prospectus summary will likely tell you. Morningstar will also tell you.

That 3 step process will solve every investing problem you ever encounter.

[ourfirsthome]

I honestly don't really know much about any of the meanings behind anything you told me. Where can I do some reading to give me more knowledge on this subject so I can follow the directions you gave me?

[jIM_Ohio]

I honestly don't really know much about any of the meanings behind anything you told me. Where can I do some reading to give me more knowledge on this subject so I can follow the directions you gave me?

Step 1 decide asset allocation. Google the term, or read on an investing site...
Asset allocation defines the risks you are taking at a very high, 50,000 foot level

Step 2, pick investment types- large cap stocks, small cap stocks, foreign stocks, bonds, government bonds, corporate bonds, junk bonds. This defines risk at the 25,000 foot level, it gets detailed here.

Step 3, pick individual mutual funds (in your 401k). This is the detail you asked for in original post. This step is easy if you know the first two steps which require about 2-3 hours of reading.

When you do step 1 above it will lead you to step 2, just pay attention to difference between asset allocation (the overall risk) and the assets which make up the portfolio (risk at a more detailed level).

[feh]

I honestly don't really know much about any of the meanings behind anything you told me. Where can I do some reading to give me more knowledge on this subject so I can follow the directions you gave me?

Read this page: http://www.bogleheads.org/wiki/Bogle...g_start-up_kit

[breathemusic]

In addition to figuring out your allocations for what you are contributing... I'd urge you to consider contributing more. Are you funding a Roth IRA? The recommended amount of savings is 15% of your income (not counting employer matching) and it sounds like you're only doing 4%. So if you have room in your budget to increase that, I suggest doing so while you're young so that you're not scrambling to play catch up later.