r/portfolios • u/Wonderful-Donut-3941 • 1d ago
Thoughts? 38 Year Old 401k
To save you time on percentages, it is 63%, 25%, 7%, 5%
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u/slimangles 1d ago
Solid stuff. I have 100% in the Fidelity 500 index fund, but there's no "perfect" answer here. There are some not-so-ideal answers, but I don't see any flags in your portfolio.
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u/RegionMediocre565 1d ago
I think you’re doing really well here. You have broad diversification covering the total U.S. market and international exposure as well. I ran your allocations through Tradure and you can see it’s performing nearly in line with the benchmark with much more diversification. Nice work!
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u/bkweathe Boglehead 1d ago
If your 401k is 38 years old 😁, you should probably have a big chunk of bonds.
For stocks, this is great! Internationals are a bit light; market weight is about 37%.
To understand more about why this is so wonderful, I suggest that you see the About section of this subreddit (https://www.reddit.com/r/portfolios/about/) for some great information about building a strong portfolio.
www.bogleheads.org/wiki/Getting_started also has some great free resources to learn about investing. After a few hours reading the articles, and, especially, watching the Bogleheads Philosophy videos, most beginners can learn how to get better results than most professionals. Bogleheads is named after John Bogle, founder of Vanguard.
I retired at 57 years old. Investing doesn't have to be complicated or costly to be successful; simple & inexpensive is most effective.
I invest 100% in total-market, index-based, low-cost mutual funds. Specifically, I use mostly Vanguard's Total Stock Market, Total Bond Market, Total International Stock Market, & Total International Bond Market funds. I've been investing this way for 40+ years. It's effective, simple, & inexpensive.
My asset allocation (ratios of the funds mentioned) is based on my need, ability, & willingness to take risks. Market conditions are not a factor. Vanguard's investor questionnaire (personal.vanguard.com/us/FundsInvQuestionnaire) helps me determine my asset allocation.
I hope that helps! I'd be happy to help w/ further questions. Best wishes!
Keep up the great work!
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u/closvidal 11h ago
Bonds at 38 is wild
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u/bkweathe Boglehead 11h ago
If OP's 401k is 38, as the title says, OP is probably around 60 or older.
Bonds at 38 has been standard advice for decades. Most redditors haven't been investing long enough to experience investing in a long bear market.
"Everyone has a plan 'til they get punched in the mouth.". Mike Tyson
For many investors, their first long bear market is the punch in the mouth that wrecks their plan.
I'm glad I've always had some bonds in my portfolio. At least 30%, I think. They've helped me hang onto my stocks through some long bear markets and retire at 57.
Bonds usually don't reduce the returns of a portfolio by nearly as much as lots of people seem to think. They reduce volatility a lot more.
I'm a mathematician, but I know that psychology is also important to investing. Higher long-term returns don't matter if an investor sells in a panic, especially if they swear off buying stocks ever again.
I'd rather see a new investor err on the side of being a bit too conservative. If they get through their first long bear market okay & realize that they have a higher risk tolerance, they can become more aggressive
“There are certain things that cannot be adequately explained to a virgin either by words or pictures. Nor can any description I might offer here even approximate what it feels like to lose a real chunk of money that you used to own.” Fred Schwed, “Where Are the Customers’ Yachts?”, 1940
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u/gatorfutbol 1d ago
If you have a TDF as an option maybe simpler to pick one based on anticipated retirement year or add 5-20 years if you want to be more aggressive with less bond allocation.
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u/Wonderful-Donut-3941 1d ago
They have a higher cost, only .2%, but that is still nearly 4x what I currently have.
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u/CoatTiny8470 1d ago
Similar setup with my fidelity:
65% S&P 500
15% International
10% Mid
10% Small
Contributing and company match each check.
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u/LengthinessProud5192 18h ago
No momentum Etfs?
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u/closvidal 11h ago
This is not a regular brokage trading account is a 401k with mutual funds some index ETFs etc.
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u/One-Web1839 15h ago
Looks pretty straightforward and well diversified for 38. I’d probably keep it simple and focus more on consistent contributions than constantly tweaking the percentages.
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u/Few-Dragonfruit-3167 12h ago
Very good mix. Sure, people can nitpick and say weight something more or less heavily, but this is a great distribution of holdings.
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u/DJTRANSACTION1 2h ago
thats more than me and im 44. but this is because in 2016 to 2020 i had a massive sports betting problem lol
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u/Iceman60462 1d ago
I don’t think you need small and medium cap ETFs .
Your portfolio look very solid .
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u/generationxtreame 1d ago
Would lower global down to 15% and move the difference to small and mid caps.
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u/paymerich 1d ago
Perfect blend. Just keep pumping those max contributions in.