Is this a good spread for 401k, your thoughts

[Lord Xar]

I also have liquid and in hand metals. This is just for "401k". your thoughts?

Stock Investments

Large Cap
FID GROWTH COMPANY ------- 42.82%

Mid-Cap
FID LOW PRICED STK ------- 2.91%

Small Cap
COL SM CAP IDX Z ------------- 25.24%

International
THORNBURG INT VAL R5 ----- 29.03%


breaks down as follows:

domestic stocks : 66.29%
foreign stocks : 31.29%
short-terms: 1.4%
other: ~1%


Overall, I am seeing this return: Personal Rate of Return from 01/01/2013 to 11/20/2013 is 24.1%

note: I modified my percentages midyear to push more foreign and small cap.

[angelatc]

How old are you?

[oyarde]

I also have liquid and in hand metals. This is just for "401k". your thoughts?

Stock Investments

Large Cap
FID GROWTH COMPANY ------- 42.82%

Mid-Cap
FID LOW PRICED STK ------- 2.91%

Small Cap
COL SM CAP IDX Z ------------- 25.24%

International
THORNBURG INT VAL R5 ----- 29.03%


breaks down as follows:

domestic stocks : 66.29%
foreign stocks : 31.29%
short-terms: 1.4%
other: ~1%


Overall, I am seeing this return: Personal Rate of Return from 01/01/2013 to 11/20/2013 is 24.1%

note: I modified my percentages midyear to push more foreign and small cap.

What is the 3 yr , 5 yr and 10 yr return on the International ? Myself I would probably use less Large Cap , way less International and use more Small & Mid Cap. You did very, very well this year , that is one year and extremely unlikely to continue I would guess .

[mad cow]

How old are you?

This.
It looks all right if these are what your company offers and you are young.

It looks fantastic if your company either matches or adds to your donations and you are young.

If you are old,maybe more income than growth stocks,more bonds and maybe some PM's as a hedge against inflation.

Edit:what goes up 24.1% can go down 24.1%.Hence,the questions about your age.
You can afford greater risks for possible greater returns up until you have to rely on your savings to survive during your retirement.

[oyarde]

This.
It looks all right if these are what your company offers and you are young.

It looks fantastic if your company either matches or adds to your donations and you are young.

If you are old,maybe more income than growth stocks,more bonds and maybe some PM's as a hedge against inflation.

Edit:what goes up 24.1% can go down 24.1%.Hence,the questions about your age.
You can afford greater risks for possible greater returns up until you have to rely on your savings to survive during your retirement.

If all else fails I can teach him to fish and hunt squirrels

[ClydeCoulter]

If all else fails I can teach him to fish and hunt squirrels

Have you got a deer yet this year, @oyarde?

[Lord Xar]

Thanks all - I am late 30's (late late) :-)

What I am worried about is if we have huge inflation, what will happen to my savings? Granted, I don't have a large amount in there, but I put a few hundred into every paycheck (2x month). My company throws in a bit too.

I don't want it to go to zilch if we have another crash in the next year or coming years.. so yeah, curious how I can modify these percentages to protect myself.

If i was to measure it all out, I am about:

40% liquid
35% precious metals
25% 401k (as listed above)

[Tod]

I also have liquid and in hand metals. This is just for "401k". your thoughts?

Stock Investments

Large Cap
FID GROWTH COMPANY ------- 42.82%

Mid-Cap
FID LOW PRICED STK ------- 2.91%

Small Cap
COL SM CAP IDX Z ------------- 25.24%

International
THORNBURG INT VAL R5 ----- 29.03%


breaks down as follows:

domestic stocks : 66.29%
foreign stocks : 31.29%
short-terms: 1.4%
other: ~1%


Overall, I am seeing this return: Personal Rate of Return from 01/01/2013 to 11/20/2013 is 24.1%

note: I modified my percentages midyear to push more foreign and small cap.

I bailed on the market this year because I am expecting it to crash. Currently the dow is about 450 points above where it was when I bailed.

[mad cow]

Thanks all - I am late 30's (late late) :-)

What I am worried about is if we have huge inflation, what will happen to my savings? Granted, I don't have a large amount in there, but I put a few hundred into every paycheck (2x month). My company throws in a bit too.

I don't want it to go to zilch if we have another crash in the next year or coming years.. so yeah, curious how I can modify these percentages to protect myself.

If i was to measure it all out, I am about:

40% liquid
35% precious metals
25% 401k (as listed above)

OK,asking me for financial advise is pretty dumb,but you asked.
I would put more into the 401K,especially if your company is kicking even more into this investment,that is the definition of free money.

I also think that if you own XX% of some company,through stocks and/or bonds,that might prove better than owning 00% of any company coming out of any depression,recession or downturn or anything short of TEOTWAWKI and of course,then,we have bigger things to worry about than our stock portfolio.

If I were you,I would put much more into your 401K,maybe 20% liquid,15% PM's.
I would add XX% real estate but I see you are from L.A.,I think California real estate is pretty much a crap shoot with loaded,statist dice,but hey,if your feeling lucky...

[brandon]

Lord Xar,

You should be more concerned about the "40% liquid" you have. Why not invest that? Your allocations in your 401k would be too aggressive for your age if it is your only source of retirement savings. If I were you I would put your liquid savings into a retirement fund, and add a bond fond to your 401k. The expense ratios on the funds you are holding are higher than they should be (the international one in particularly at 1.3%) and you should check of you have better ones available in your plan.

[CaptLouAlbano]

401K's are tough because you are limited to what you can pick. Best option is usually to spread it as wide as you can. At your age you have plenty of years left.

Overall, I always chose a mix for investments:
25% stocks (broadly invested, index funds are good for this)
25% bonds (again broadly invested)
25% precious metals and/or commodities
25% cash (i.e. money market accounts, CD's, etc)

At the end of every year, I would balance it out; sell off whatever performed well and buy more of whatever was down that year. Truth be told though, I became wealthy from buying income producing assets throughout my life: real estate and businesses. My guess is that if my wife and I worked regular jobs our whole life and just saved for retirement using the above formula, we would be OK now, but not able to live life like we do presently.

[helmuth_hubener]

Lord Xar,

You asked for advice in this thread a while back, and I tried to give you some thoughts as best I could. Did you ever check back on that thread?

Now you are focusing on the 401k specifically. First, I think we cannot really give the most worthwhile nuts-and-bolts advice without knowing anything about the 401k. So if you could please let us know: Do you have a list of what funds and other options are available to you? Most importantly, does your plan allow you the possibility of setting up a brokerage window?

[oyarde]

Have you got a deer yet this year, @oyarde?

One.

[helmuth_hubener]

Lord Xar, are you ever coming back to this thread? Is any of the advice people have given useful to you?

[cubical]

I would invest in the stock funds which offer the lowest expenses. 100% of mine is in a large cap index fund with an expense ratio of around .15%.

[helmuth_hubener]

I would invest in the stock funds which offer the lowest expenses. 100% of mine is in a large cap index fund with an expense ratio of around .15%.

What? Shouldn't he put 100% in EuroPac?

Well, at least the index fund you're in is exclusively overseas with an emphasis in emerging markets, right?

No?

Don't you know the US equity market is headed for a bloodbath? That it's going to collapse, and the dollar is going to be literally worthless? Any day now!

Could it be that maybe, despite your giving me a hard time, you too understand that Peter Schiff is not necessarily right in his predictions nor in his advice? It sounds like in your actions you're totally ignoring his advice.

[helmuth_hubener]

Personal Rate of Return from 01/01/2013 to 11/20/2013 is 24.1%

I don't know if Lord Xar is ever coming back, but I just thought I'd point out that the general rate of return in the stock market this year has been exceptionally and unusually high, historically speaking. To have a fairly conservative portfolio (as Lord Xar's is) go up 24% in a single year is the exception, not the rule. You shouldn't expect a 24% average return to continue, year in and year out. You should just be thankful that you happened to get an above-average return.

[Lord Xar]

Hey Helmuth,

Sorry I haven't responded. I was just taking in the knowledge. So far, I kept my allocations the same but probably looking to change it up a little.

I have recently started putting monies, every month, towards some silver/gold.. about 5oz silver/2-3 grams of gold (in addition to putting into a 401k and some monies into a health savings account ~3k / year for that).

I probably should put some monies towards real estate but I know NOTHING about that.. and real estate where I live is outrageous and can't afford it. I perhaps have thought about buying property in more affordable areas on the United States. But again, that is a real risk for me. No management company to oversee the property etc..

My fear is losing much of my 401k, like I did previously, when it comes down crashing again.. so I don't know where to put my allocations as I move forward.

[helmuth_hubener]

Hey Helmuth,

Sorry I haven't responded. I was just taking in the knowledge. So far, I kept my allocations the same but probably looking to change it up a little.

I have recently started putting monies, every month, towards some silver/gold.. about 5oz silver/2-3 grams of gold (in addition to putting into a 401k and some monies into a health savings account ~3k / year for that).

I probably should put some monies towards real estate but I know NOTHING about that.. and real estate where I live is outrageous and can't afford it. I perhaps have thought about buying property in more affordable areas on the United States. But again, that is a real risk for me. No management company to oversee the property etc..

My fear is losing much of my 401k, like I did previously, when it comes down crashing again.. so I don't know where to put my allocations as I move forward.

Not a problem at all, Lord Xar. I was just wondering if maybe you'd forgot about this thread.

Do you have a list of what funds and other options are available to you?

Does your plan allow you the possibility of setting up a brokerage window?

[cubical]

What? Shouldn't he put 100% in EuroPac?

Well, at least the index fund you're in is exclusively overseas with an emphasis in emerging markets, right?

No?

Don't you know the US equity market is headed for a bloodbath? That it's going to collapse, and the dollar is going to be literally worthless? Any day now!

Could it be that maybe, despite your giving me a hard time, you too understand that Peter Schiff is not necessarily right in his predictions nor in his advice? It sounds like in your actions you're totally ignoring his advice.

Europac's fees are too high and I can't access them in my 401k anyways.

Yes, I do think the US dollar will be worthless or will approach being worthless.

Yes, I think the US economy is headed for a bloodbath.

Clearly you are trying to imply some of Schiff's positions here, but you are ignorant of them. My options in my 401k are cash, bonds, stocks. Schiff has said repeatedly he prefers stocks over cash and especially over bonds. He would rather have foreign stocks over US stocks.

I am in stocks. Of the 3 categories above, he would agree. If fees were lower and there was no foreign tax withholdings(which I can not reclaim on my taxes being in a tax deferred account), I would probably be mostly in foreign funds. My own personal account is a different story. Why do you think my 401k is 100% of my wealth allocation?

As Schiff says you need to find companies that cater to those who will have wealth. In his and my view, US is on its way out as a global consumer. Finding a company based out of Singapore who sells washing machines to India, Europe or China is a great example.

[helmuth_hubener]

Europac's fees are too high and I can't access them in my 401k anyways.

Yes, 401ks are indeed often full of shortcomings. You have no brokerage window, I take it? Have you ever talked to your company's retirement person or dept. about adding one? It's always worth a try!

Yes, I do think the US dollar will be worthless or will approach being worthless.

Yes, I think the US economy is headed for a bloodbath.

I hope you have taken steps to protect yourself should these things happen. And I'm sure you have. But I hope that you have also taken steps to make sure that just in case what you think will happen ends up being wrong, you will be protected in that case, too. That's all I recommend. It seems like the wisest course, to me.

Clearly you are trying to imply some of Schiff's positions here, but you are ignorant of them.

While I do not know everything he has ever said or written, I am not totally in the dark.

My options in my 401k are cash, bonds, stocks. Schiff has said repeatedly he prefers stocks over cash and especially over bonds. He would rather have foreign stocks over US stocks.

You are correct. This is what I have heard and read him express as well.

I am in stocks. Of the 3 categories above, he would agree.

I too think he would.

My own personal account is a different story. Why do you think my 401k is 100% of my wealth allocation?

Oh, I do not. Certainly I do not. But do you know what options are available to Lord Xar in his 401k? He is asking for recomendations. I would have thought that the orthodox Schiff answer would be to recommend foreign stock funds, commodity funds, and gold miner funds, if they are available. They may be available; we don't know.

As Schiff says you need to find companies that cater to those who will have wealth. In his and my view, US is on its way out as a global consumer. Finding a company based out of Singapore who sells washing machines to India, Europe or China is a great example.

Such companies will already be valued at a premium by the market, ruling out any above-average profit opportunity. Unless you think that you know more than the market at large? Do you know better than all the full-time brokers and traders and researchers, better than all the other millions of people looking for profit opportunities? Are you sure? That is what so many investment strategies come down to: a bet that you have some special knowledge or insight that the rest of the world is not privy to. It's a risky bet to make. Much safer to accept that you (or your guru) are actually probably not the smartest man alive, and invest accordingly.

[helmuth_hubener]

....

[Lord Xar]

UPDATE based on latest thread questions:

Since last posted, now its at 26.3% growth.

Helmuth, here is a complete list of what is available to me.
I also have the option of the following:
1. Change investments
2. Move monies between investments
3. Rebalance

Here is what is avail to me. I bolded my current allocations.

Asset Classsort down Subclass Fund Name Current % Desired %
Blended Fund Investments -- FID FREEDOM 2010
Blended Fund Investments -- FID FREEDOM 2020
Blended Fund Investments -- FID FREEDOM 2030
Blended Fund Investments -- FID FREEDOM 2040
Blended Fund Investments -- FID FREEDOM 2050
Blended Fund Investments -- FID FREEDOM INCOME
Blended Fund Investments -- FID PURITAN
Bond Investments Stable Value NY Life Guaranteed Interest Account
Bond Investments Income FA STRAT INCOME A
Bond Investments Income PIMCO Total Return Fund Institutional Class
Bond Investments Income Templeton Global Bond Fund Class A
Stock Investments Large Cap FID GROWTH COMPANY 50%
Stock Investments Large Cap SPTN 500 INDEX INST
Stock Investments Large Cap VANG EQUITY INC ADM
Stock Investments Mid-Cap FID LOW PRICED STK 20%
Stock Investments Mid-Cap MSIF MID CAP GRTH A
Stock Investments Small Cap BARON SMALL CAP
Stock Investments Small Cap COL SM CAP IDX Z 15%
Stock Investments International INVS DEVELOP MKTS A
Stock Investments International THORNBURG INT VAL R5 15%
Stock Investments Specialty INVS REAL ESTATE A


The reason I am fishing around, is that I saw this -- if this holds true, we are in for a ride.. and I want to be prepared and not taken to the cleaners:

The orange colored ones are what I searched thru my 21 listings that took the least/softest hit during the 2009 downturn.

The light blue is newish 2011, and seems to be a guarantee of some sort. says "Seeks to provide competitive yields and limited volatility with a guarantee of principal and accumulated interest. These guarantees are backed by the full faith and credit of New York Life Insurance Company."




*note: I understand I shouldn't "rely" on internet advice. I've been reading a bit lately and its touch going. I program for a living and it seems ALOT easier than understanding the nuances of finance!!

[TaftFan]

I am no expert but my advice is:

*Bonds are useless, unless you can find some that outpace inflation.
*Savings are even worse, just keep enough for emergency expenses, day to day transactions, and bill payments.
*Don't over invest in PM's, they could fail. Cryptocurrencies are now coming into play.
*Mutual funds are the best bet for growth, but remember are stock market is being propped up.

[mad cow]

UPDATE based on latest thread questions:

Since last posted, now its at 26.3% growth.

Helmuth, here is a complete list of what is available to me.
I also have the option of the following:
1. Change investments
2. Move monies between investments
3. Rebalance

Here is what is avail to me. I bolded my current allocations.

Asset Classsort down Subclass Fund Name Current % Desired %
Blended Fund Investments -- FID FREEDOM 2010
Blended Fund Investments -- FID FREEDOM 2020
Blended Fund Investments -- FID FREEDOM 2030
Blended Fund Investments -- FID FREEDOM 2040
Blended Fund Investments -- FID FREEDOM 2050
Blended Fund Investments -- FID FREEDOM INCOME
Blended Fund Investments -- FID PURITAN
Bond Investments Stable Value NYL GUAR INT ACCOUNT
Bond Investments Income FA STRAT INCOME A
Bond Investments Income PIM TOTAL RT INST
Bond Investments Income TMPL GLOBAL BOND A
Stock Investments Large Cap FID GROWTH COMPANY 50%
Stock Investments Large Cap SPTN 500 INDEX INST
Stock Investments Large Cap VANG EQUITY INC ADM
Stock Investments Mid-Cap FID LOW PRICED STK 20%
Stock Investments Mid-Cap MSIF MID CAP GRTH A
Stock Investments Small Cap BARON SMALL CAP
Stock Investments Small Cap COL SM CAP IDX Z 15%
Stock Investments International INVS DEVELOP MKTS A
Stock Investments International THORNBURG INT VAL R5 15%
Stock Investments Specialty INVS REAL ESTATE A


The reason I am fishing around, is that I saw this -- if this holds true, we are in for a ride.. and I want to be prepared and not taken to the cleaners:



*note: I understand I shouldn't "rely" on internet advice. I've been reading a bit lately and its touch going. I program for a living and it seems ALOT easier than understanding the nuances of finance!!

Does your 401K provide for you to have cash,as in a money market account within it?

[oyarde]

I am no expert but my advice is:

*Bonds are useless, unless you can find some that outpace inflation.
*Savings are even worse, just keep enough for emergency expenses, day to day transactions, and bill payments.
*Don't over invest in PM's, they could fail. Cryptocurrencies are now coming into play.
*Mutual funds are the best bet for growth, but remember are stock market is being propped up.

This makes it sound as if I should have spent it all on beer and liquor

[Lord Xar]

Does your 401K provide for you to have cash,as in a money market account within it?

I don't know. I need to inquire about this. I know you can take out cash up to 50% at a fee/loan etc.. But I haven't read anything about money market account. I'll send an email to find out.

hmm. I am curious which fund performed the best during the downturn a few years ago.

[helmuth_hubener]

Awesome; thank you, Lord Xar.

Here is what you wrote as to your total portfolio allocation:

55% cash/liquid
25% physical silver / gold
20% 401k ( 97% which are stocks )
--> 40% large cap
--> ~31% international
--> ~26% small cap

Here is how CaptLou invests his wealth:

401K's are tough because you are limited to what you can pick. Best option is usually to spread it as wide as you can. At your age you have plenty of years left.

Overall, I always chose a mix for investments:
25% stocks (broadly invested, index funds are good for this)
25% bonds (again broadly invested)
25% precious metals and/or commodities
25% cash (i.e. money market accounts, CD's, etc)

At the end of every year, I would balance it out; sell off whatever performed well and buy more of whatever was down that year. Truth be told though, I became wealthy from buying income producing assets throughout my life: real estate and businesses. My guess is that if my wife and I worked regular jobs our whole life and just saved for retirement using the above formula, we would be OK now, but not able to live life like we do presently.

Here is what I recommend:

25% stocks
25% bonds
25% gold
25% cash

As you can see, we're both recommending the same strategy (with some tactical variation).

*note: I understand I shouldn't "rely" on internet advice. I've been reading a bit lately and its touch going. I program for a living and it seems ALOT easier than understanding the nuances of finance!!

You are a programmer, and thus probably have a logical and disciplined mind. I would strongly, strongly recommend you check out Harry Browne's Permanent Portfolio strategy. It is logical. It is brilliant. It cuts through about a hundred layers of gook and confusion and gets to the truth.

16 Golden Rules of Investing
One-Page Summary of the Permanent Portfolio

If someone is trying to be your broker or to sell you on investment advice, make them apply for the job. Ask them to send you their tax returns for the past five years showing their gains and losses in their investments. Then, if they have has a better return than you, you might consider taking their advice. But they won't send it, because they haven't done better, because their ideas are all failed and lousy. They're following a disproved paradigm.

The truly rich usually invest conservatively. They do not chase yield. They understand the impossibility of beating the market. It is mathematically impossible to do so reliably.

So, I recommend for the money that's precious to you that you invest it safely in the 4X25 split discussed above so that it will be protected no matter what happens. There's a lot of different ways to do that. But that is the overall goal for a safe and balanced portfolio.

Right now, your 401k represents only 20% of your total portfolio. What complicates the matter is that that could change -- will change if you continue putting money into it. So consider the future. I would ask your company's financial person about the possibility of a brokerage window. Many 401ks have this option, but very few people ever know about it or use it. Ask about it. If they don't have it, they very well may be willing to add one for you. This will give you much more wonderful flexibility, which could be very helpful down the road, especially if your 401k grows to be 25%, then 30%, then 35%, then more, of your portfolio. With a brokerage window, you'll be able to rebalance, by buying bonds, cash, and gold within the 401k. Without one, staying balanced and protected could be difficult.

But for now, one way you could implement the plan would be the following:

Put 100% of the 401k into the Spartan S&P 500 Index fund. In your list:
Stock Investments Large Cap SPTN 500 INDEX INST

This fund will have a lower fee than all of the rest (check for yourself). That is a huge deal! Interest compounds, but guess what everyone forgets: fees compound, too! If you're losing one percent per year to fees, you're starting off crippled right out of the gate. To even match the performance of a simple index fund, you'll have to beat it by a percent. How are the fund managers going to do that? Do they have some special insight? Let me just tell you: they don't. They can't beat the market -- they are the market! If everyone could beat the market by one percent every year, let me tell you: everyone would. You can see, then, it's mathematically impossible.

Even more importantly, this fund is not actively managed. Not only will the higher-fee funds fail to make their fees a worthwhile price by consistently beating the market, they will usually get a lower return than the market!! Unbelievable! So what are you paying them for? Exactly! Why would you pay them good money in order to make you less return than you could without them? This is a statistical thing -- there will be outliers and exceptions, such as your large cap growth fund this year, but over the course of many years and many funds, the actively-managed funds under-perform the market. And there's solid, theoretical reasons why they have to under-perform the market. It's inevitable!

Just get the Spartan index fund. Be average. By trying to get the average, you will actually end up well above average. What a paradox, huh? But the vast majority of investors get returns below those of a simple index fund. So by getting the index fund, you beat almost everyone.

Then, outside the 401k, keep the gold. If you have a massive amount of silver, sell the silver and use it to buy gold instead. Silver is a commodity metal. Gold is a monetary metal. Gold is the one which will protect you in a time of inflation. Silver is not as strongly linked to inflation. Gold is the one you want. A little bit of silver as an emergency supply for some kind of disaster is fine -- maybe a few hundred dollars' worth at the most.

You have a lot of cash, which is good. If the 55% cash represents less than 1 year of living expenses for your family, you probably should just keep it how it is and not change a thing. Cash is a conservative investment. But conservative is not bad. The wealthy are conservative. They know how to protect their wealth. If you want to protect your wealth, do like them. Wealthy families have about 40 percent of their assets in cash, according to a recent poll of more than 50 large family office representatives from 20 countries conducted by Citi Private Bank.

But if your cash is more than a year's supply, then I would recommend that you consider completing your portfolio's diversification by using some of the cash to buy 30-year US Treasury bonds. They should be about 25% of your portfolio. These will protect you in case of a time of deflation (or decreased inflation). You can buy the bonds directly from the Treasury's auction web site, or you set up a broker account and do it through them. I would recommend buying them directly. There are no good bond options in your 401k (unless I missed one).

In conclusion, the goal is to be protected in all of the four economic environments. You are protected right now in 3 of the four. Your money will be safe in prosperity, inflation, and recession. Only in a deflation will you be vulnerable to a large loss. So I have recommended that, all else equal, you should move to cover that vulnerability if possible.

I have also recommended tweaks to the other three asset classes. I recommended that you improve the performance of your 25% stock allocation by switching to the Spartan S&P 500 index fund. I recommended that you improve your 25% precious metals allocation by switching it to be exclusively gold, since you cannot count on silver to protect you from inflation. And I recommended that you store your cash in the safest possible way: US Treasury bills or short-term notes.

And for long-term planning and flexibility, I recommended that you find out if you have a brokerage window, and if not, try to get one added.

Most importantly, I recommend that you read up on Harry Browne's Permanent Portfolio so that you can understand more thoroughly the reasoning behind these recommendations. Then you can move forward with a deep and profound understanding of the investment world, and with confidence. Here are the essential books:

Fail-Safe Investing
The Permanent Portfolio

And another big book if you get excited about this stuff and want to really bone up:

Why the Best-Laid Investment Plans Usually Go Wrong: And How You Can Find Safety and Profit in an Uncertain World

[helmuth_hubener]

I don't know. I need to inquire about this.

I am sure that you can have it in cash. That will be the default for money that you don't have in anything else. If you were to sell one of your funds today, and not buy anything else, the money from that sale would go into the default money market fund.

Since you already have 55% of your portfolio in cash outside of the 401k, there is no particular reason to do this, in my opinion.

[Lord Xar]

You have given me alot of food for thought, thank you.