lynnerself
Senior Member
Joined: Jan 3, 2011 11:42:29 GMT -5
Posts: 4,166
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Post by lynnerself on Jun 16, 2011 0:33:46 GMT -5
My 401K recently added two new funds. An energy equity fund (Vanguard Energy Inv) and a Real Estate fund (Cohen and Steers Realty Shares). I want to add them to my mix. I am trying to decide on an appropriate allocation. Currently I am 20% bond funds, 60% US stock funds (small, mid and large cap) and 20 % foreign stock funds. I am 57 and hope to retire at 62. We are aggressive for our age because my DH has a government pension. How much (%) would you add of these two funds? What would you suggest for the final allocation?
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Post by Savoir Faire-Demogague in NJ on Jun 16, 2011 6:01:21 GMT -5
Lower you bond allocation to 10% and put that amount split into the new funds. You can even go lower to 5%.
Your equities allocation seems reasonable.
I am the same age as you, and have my 401K 90% equities and 10% fixed income. However, I am single and very far behind in retirement and other savings, in spite of my income.
One caveat though is that many of the top allocations of companies in these new funds may also be in the other funds you hold.
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phil5185
Junior Associate
Joined: Dec 26, 2010 15:45:49 GMT -5
Posts: 6,412
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Post by phil5185 on Jun 16, 2011 13:13:22 GMT -5
Your 80%/20% stocks/bonds mix looks good for your situation, so I would retain that. The REIT is primarily a bond - so you might move 5% of the 20% bond allocation to the REIT (I would avoid more than 5% in any one issue). And then move no more than 5% of the 80% stocks to the Energy Sector. (You already own most of those companies - XOM, OXY, CVX, BP, COP, in your stock fund, in fact they are heavily weighted, so be careful not to over-weight your total Oil allocation, you may already be >10%?)
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