Emerging Market Equity Funds
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Louise Said:
Where should I countribute for these 401k fund options?We Answered:
You've got great options in the Vanguard family so I would stick with those as Vanguard has the lowest expense ratios among mutual funds. Put at least 20-30% in international funds.Vanguard Institutional Index
Vanguard Small Cap Index
Vanguard Mid Cap Index
Vanguard Emerging Markets
Vanguard Total International Stock Index
Eric Said:
FOR Bric Counties - HSBC Investments launches Emerging Markets Fund ? is worth investing ? Pl guide?We Answered:
Almost every investment company has an " emerging markets" fund ( some specifically BRIC) ant there are BRIC ETF's....THEY HAVE ALL DONE WELL...and should continue...maybe at a lesser rate, but still very well.HSBC should do just as good as Fidelity, Vanguard, Dodge&Cox, etc.
...BUT...be prepared for a lot of " ups and downs"...don't panic, give it time...
Good luck.
Eugene Said:
How to diverisfy my 401k?We Answered:
At your age you could be up to 100% invested in stocks. I think interest rates will go no lower at this time fixed income is a poor investment.You need to be in the best funds available.
My allocation for you is as follows:
Royce Opportunity Fund 25%
Harbor Capital Appreciation Fund 25%
Vanguard Small Cap Index Fund % 5%
Vanguard Emerging Markets 10%
American New Perspective Fund 25%
Fidelity Contrafund 10%
The three funds I have 25% in I believe are excellent. Contra is a good fund but I don't think it should be a major player.
Intrest rates will go up. When the rates have risen then I would be moving money over to them. The vanguard total market is a good fund.
Lawrence Said:
Is it right time to invest in Equity markets like in Mumbai, India in May 2006, with BSE sensex at 11500?We Answered:
This sensex is not at 11,500 it is at 12,285. Invest in a MF that has a hedging feature. Long term is the key.Carole Said:
I need to choose investment options for my 401k?We Answered:
First, understand the length of time you plan to spend with this company is not particularly relevant to your 401(k) investment decisions.Also, any money you put into the plan will be subject to taxes plus penalties if you take it out before age 59.5. This occurs even when if your employment ends and you choose to take the disbursement early (as opposed to rolling it over to a qualified plan).
Also, you should ensure that any contribution amount is feasible within your budget, goals and financial plan. (Meaning don't contribute so much that you can't cover bills and rack up debt).
You should also try to contribute an amount that maximizes any employer contribution, as this is like free money.
Given the listed horizon options, you are most likely an Extended Horizon Investor. This means your retirement is at some point in the very far future: ~40 years. Such a profile will put more of your money in stocks in general (as opposed to bonds). Additionally, the types of stock will include a higher allocation of more aggressive types (emerging markets, international etc).
Because of the long time period until retirement your portfolio will be able to better adjust to the volatility of this type of mix. However, it is not appropriate to a person retiring in a year. Their portfolio couldn't handle a 30% drop that recovers in two years, for example.
You need to develop an understanding of what your risk tolerance is, because even if you are an "extended horizon" investor, you may not be comfortable with large swings in your portfolio.
Having said that, if it were me (and I am moderately aggressive) I would do this, based on my own risk tolerances...remember...you need to get a feel for what your tolerance is:
1. 5%
2. 0
3. 0
4. 15%
5. 40%
6. 0%
7. 0%
8. 10%
9. 15%
10. 15%
Nora Said:
Setting up 401K for the 1st time, need advice =)?We Answered:
Totally agree with "xeno"(?)...you're in good shape with the international exposure....but just a little too much depending on the " big ol' companies"... put a little of that money into some mid and small caps.(.growth is fantastic fertilizer for a portfolio)I'm sorry I don't have time to compare Spartan to Contrafund, but if you can , do it...Contrafund is a classic...one of the top managers in the biz...year after year..( as a matter of fact I believe it's closed to new investors...but if the plan has an existing deal with Fidelity maybe you can get in....do that comparison, and if you like it try to get in ...part or all of your large-cap)
You will be so much better off than your co-workers who are taking the " easy way out"...just keep your eye on stuff, and in general don't worry about the bonds for another 7 to 10 years..then maybe put 25 or 30 percent into one of the Freedom funds ...but keep working the major portion of your investments yourself.
Added advice: ( sorry can't help myself)...somewhere along the line, sometime soon...also log on to Fidelity's regular site and open a ROTH IRA ...which can be " self-directed"...meaning you can choose from about 7000 fund instead of just ten...or other investments...individual stocks or ETF's. Even if you only open it then add once or twice ( getting about a 12K or 15 K bankroll...then just let it ride..( invested nicely)...it will be ONE FANTASTIC source of TAX-FREE income ...those years and years of gains and dividends...ALL YOURS... when it comes time to withdraw.