I am looking for some suggestions to invest the cash in my retirement portfolio.  The funds listed below are in my 401k or Roth IRA.  My 401k has a self directed option so I can more or less buy whatever I want at my brokerage.  I am 32 and am ok with risk.  Here is what I currently have (this is about $175k):

Marsico 21st Century MXXIX: 18%

Vanguard International Growth VWILX: 32%

Dodge & Cox Stock DODGX: 8%

Fidelity Leveraged Stock FLCVX: 9%

Mathews China Fund MCHFX: 5%

Cash: 28%

Of the cash, 4k is in my Roth which currently consists of D&C and Fidelity.  I think I need a couple good small and mid cap funds to split my cash.  Any suggestions or other ideas?  Thank you.

 

 

I would reduce VWILX by at least 12% and shop for a superior international large-cap value fund like Harbor's HAINX. You don't seem to have any exposure to domestic small-cap stocks but a 20% allocation would be in the ballpark for someone your age; take a look at one of Royce's funds or Heartland Value Plus (HRVIX). I'm not sure you need a high-risk single-country fund like Matthews China; maybe consider devoting that 5% to real-estate with a REIT fund like TRREX, SSREX, or VNQ. You have no bonds and may not want any, but an emerging markets bond fund like FNMIX can generate decent returns with lower risk than EM stock funds. Alternatively, you could expand your core with a balanced allocation fund like FBALX or PRWCX that gives you exposure to both stocks and bonds.

Well Mike? I think it all depends..( And not the kind you will have to wear in the future)

Any suggestions or other ideas? 

Boy, have We got Ideas! Maynot be the one's you want to hear, but none the less..LOL

1. On how much APY rtns does your Retirement Financial Plan TELL you you have to make? Some only will have to make Bond to Equity index rtns or a mix,  while others being able to save less, have to go for Higher rtns..

2. And your % allocations Are Really just your Guessing those Higher Risk Diviation Funds and Asset classes will out Perform the others and you know what % are successfull at doing this at the Professional level, let alone Amatures...right?

3, If you truly beleive in your Portfolio? Then your answer is already made up for you..ie; Just divide the Cash into those funds according to your % allocations you set up.

4. And Do you own a Home? have it financed for no more than 15 yrs? And do oyu realize the $ you put in it grows Tax Free and Is Tax free when you sell it! Sure beats just about everything else on the planet, now doesn't it? ( I mention this since before retiring, I sold My Bigger Home, Downsized and put over $200 extra K into my Retirement Account) and when you retire, in what 20/30 yrs? You could double that..

5. I wouldn't bet baby's shoes on a #401k..being there when you retire either.. Think Enron, Airlines, Bear Sterns #401k's all went broke...

6. Mid cap? Ahhh my favorite Funds.. Not exactly MC's now, but they were when I bought them, > CGMFX,CGMRX,FAIRX,FLVCX, FBRVX and did very well in the last Bear yrs..and don't leave out VIMSX either..16% apy past 8 yrs and 12% past 10 aint' too shabby..( double the S&P )

of course, these and the others like yours could have the bottom fall out in the future..but that's the chances one takes playing the markets..Just like Betting on the Horses and their trainers..

After playing your Game for many yrs ( mostly Indexing, since that's about all we had available to us to bet on) I "Went into the Light" and took my Retirement Port and Balanced it out to a 60/40 mix and any $ I had Left over, I gambled with that ..and good thing I did this In 1998/99' yrs... Because look what happened to the equity market the following 3 yrs... and the Gambled $ took another 2-3 yrs just to get back to even! Just when I Planned to retire...ie: saved my Butt.

Good LuckI

 

 

 

I would increase the number of funds you hold, making sure they don't overlap.  since 80% funds under perform, maybe 7 to 10 funds total.

 I have some concerns about having 20% in any single fund.  I don't hold any more than 10 % in a single fund.  I may hold more on a market region, such as latin am,  holding prlax and flatx, I do watch for overlap in these conditions.

I would look to gain exposure in bric countries, namely russia, mid east right now.  I graph my holdings (via fido big charts) daily, and the shape of the russia charts is definitely different than the others.  and eurox, letrx has been consistently 30+% for 5 yrs now..  or latin am, funds as mentioned above..

I don't like 28% cash.

 Cash reserves for ?

I realize that funds are 'long' term holdings, but the can be converted to cash if sh*t happens.  I use cash reserves to manage a cash flow problem, not a safety net just in case something happens.  Anything that can be converted to cash without penalty is safety money for me.  If this is on the tax free side, then I shoot for zero cash..

okay, I had an employment situation last summer and had to shed some funds to manage a cash flow problem, I took the paper loss to help my end of yr gains that would be coming in dec.  so, if I wasn't so invested in the market I wouldn't have had to sell some funds.   Then net effect was to reduce the gains at the end of the yr.

So, since I'm treating the mmf as cash flow management, the emergency is the balance of my taxable portfolio.  I still managed to keep way ahead of the mmf returns for money that most likely would not be utilized.  I then argue that having 10-20% in emergency, not counting cash flow in this, results in lowering your annual returns by 3-7% for your entire portfolio.

Thank you for the replies thus far. I will certainly consider everything that has been mentioned. Kerry, my post was asking about what to do with my cash, so I do intend on investing that. Interesting thought about increasing the number of funds. I hadn't considering buying more than one found in the same area, but the 80% things makes sense.

while doing some research on funds this morning, I saw an interesting stat from a major fund manager.  His ave was in the 20% range over time.  He holds about 300 stocks at a time, it is 7-15 stocks that make the pop for the yr.  Interesting,

So by going with other funds in the same style/ market space, if the overlap is low, then the maybe you have a better chance of not having the dogs bring you down.

It is amazing when I use the xray tool, my largest single stock holding in my entire portfolio represents 1.2%.  There are only about ten stocks in this range, then it drops to less the .5%  As long as the average for 3 yrs remains high, M* view, I'm happy.

"ok with risk".

Oh, R U now? Let's find out, shall we?

( and as Yoda  says..You Will, You Will )  LOL

1. Let's look at how your funds did during the last Bear Market btwn 00 thru early 1st qtr of 03'..

2. And Let's say you had your $175k in it by then, not now..( and even having $350k in it 10 yrs from now )

3. And let's say it's lost a ton of $ ( say -30% by the end of  of 02)

4. And the Prospects for a Bear Market look Dismal..for the next Yr or 2.?

Now saying you can handle risks vs actually doing it with some major $ on the line are 2 different animals for most..

And how about your China, MXXIX and VWILX all dropping some -40% in a yr or 2? Make you rethink your risk now?  LOL

and now it's going to take the next 2-3 yrs to just get back to even!

Bottom line?

> I suggest you best add some Bonds with that 28% cash..and maybe even more..

> Many pro's use a 60/40 diversified Port.. at least go with a 70/30

> If want a Little higher Rtn Bond Fund? Go with LSBRX..vs conventional bond funds

And your playing with your Retirement $ and you only get One shot at this.. You blow 20-40%? say a few yrs before you want to retire ( Or have too due to Illness or injury)? And your SOL..

Then, If have any extra $ laying around? Use that for your All Equity/High risk Investing.. ie: gambling $..

Unless of course, you have some Rich Family members going to leave you a nice safety net of $, your Co. gives you Stock options and/or you marry into a Wealthy family...

And look up what happened in 1987 and in 98'...and see how you'd feel watching some -30% of your money go down the tubes... and people Like Adam Bold has been saying "Int'l and Sector countires funds can Loose (-40%) just as fast as they made it."..

And Wonder why you see so many Seniors working at Wal Mart? (And/or living In Mo-Bile Homes....)

I know one guy that does at my Wal Mart who says he lost 70% of his Retirement $ investing during the Tech Yrs, he made 3x as much $ when started with and then lost it ALL and then some.. ( played Options & took Loans out to buy more)...and add his Co.'s #401k plan lost over 40% as well..  He's still Playing Catch up and working at Wal Mart handing out Shopping carts..

Be Very carefulll my friend..be Very carefull