ok, guess I've been in that category also, not with all my wits but not at wits end (see my OP for the results, ie. sometimes dumb investing makes good returns)
so, let me ask you and thank you for the informative post on the percentages and allocation, at what age would you foresee moving equity positions to more conservative, ie. bonds or moneymarket/CD type funds? what if we are hit by a mother-of-all-times inflation, ie. what moves/changes in the allocations would you make?
Here are some bond calculators I have seen others use:
110-age in equities (so a person aged 30 is 80% equities)
100-age in equities (age 35 is 65% equity)
I like 20-(retirement age-current age)=%bonds (if difference is greater than 20, then bonds are 0%). Age 30, retire at 55 difference is 25, so 0% bonds. Age 36, difference is 19, so 1% bonds, 2% the next year, 3% the next.
Some of this also depends on the return you need. If a person aged
46, which wants to retire at 65, and needs a 10% return, then this "generalization" may not apply.
Moving to conservative investments (changing asset allocation) will be as unique to the individual as the original allocation itself. Change as you near retirement is my advice. How much you change is up to individual.
I am planning to do the 20-(retirement age-current age). Because what this does is force me to sell some gains (1% of portfolio) each year as I get closer to retirement (except in a down year for equities). The year I retire would be 80-20, at that point I would probably be
70-30 or 60-40 depending on account value and how much I had outside tax advantaged accounts.
Any company can fall on tough times. For every Berkshire Hathaway (worth about $100K/share having returned 24%/yr over the last 4 decades) there are the Enrons that implode, or the techs that were over bid and couldn't keep up with forecasts. Look at the charts for EMC, it passed $20/sh in late 98, touched $100, and currently is trading at $14. With no dividend, you would be down 30% nearly 9 years later. We know nothing about your company, not even the industry. There are those who say 10% is the maximum one should hold in company stock, others say your job is a large enough risk, zero is the right amount. JOE
I'm fairly certain that your company has more information about the other funds. Maybe you can't get it from the website, but they almost certainly have some annual report about the fund performance and holdings. Did you try asking HR if such info exists?
I think its increadibly dangerous with enough companies turning around on a short notice like Enron and USWest (the trial of Nacchio wrapping up a few miles where I am typing this). I just dont have that much sympathy for the whining retirees who were in 100% and lost everything. The risk is well known and people are greedy.
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