My 401k YTD performanceshows 3.4%? (bond, fund, fee, Fidelity)

[gcretro]

My 401K (via employer) is with charles schwab for many years. I have been maxing out my contributions every year last few and current balance is ballpark 250k. When I logged in and checked my "personal performance" this year YTD, it shows about 3.4%. I was like that's too low! Right? (Last year's return was about 6%).

Here are my fund choices & what their YTD performance was:

MLAIX - MainStay Large Cap Growth I - 7.7
VINIX - Vanguard Institutional Index I - 2.3%
GSMCX - Goldman Sachs Mid Cap Value Instl - 1%
HBIOX - Hartford International Opp HLS IB - 9%
DRGTX - AllianzGI Technology Institutional - 7.1%
New York Life Anchor Account (cash preservation) - 1%

Questions:
1. I have not taken the advice of an expert to manage my 401k till now? Can I rely on the free services charles schwab rep provide?

2. I am clouded on what all constitutes "401k" maintenance activities? How often to monitor/do them etc. (I know a bit about rebalance done it a few times, but not enough to feel confident).

3. I do have the option to select one of thoe target year based "managed" funds instead of my own. Is that a better option? If yes, do I move current funds now?

[mysticaltyger]

3.4% is not unreasonable. The S&P 500 stock index is only up 2.14% year to date, and most funds don't beat the index....so you should be glad you are actually beating the S&P 500 stock index so far this year.

It's very unrealistic to expect your 401K balance to keep going up by 10% or more ever year as it has the last 5 years. At some point, you're going to have a losing year. That's just the way it is in investing.

#1. It's really hard to say.
#2. Normally, rebalancing once a year is enough.
#3. Based on your current asset allocation, I think a target date fund would be good for you. You are honest and admit you don't know what you're doing. Most people are REALLLY BAD at asset allocation. Even if they know the right thing to do, they often don't do it. The human brain is not wired to sell the good performing funds and buy the bad performing funds, even though that strategy usually works out best in the long run.Humans are not rational creatures. That's what you have target date funds for. They do it for you. However, I will say, it depends on the company running the target date funds. Vanguard & T. Rowe Prce have good target date funds. Fidelity also has some good target date funds. Other companies may or may not be good.

[LeavingMA]

I'm up about 4% this year and consider it good, since most people are even or slightly down. Unfortunately after the last few years we are all spoiled thinking we should get 10%+ every year. This year is going to be rough, take anything that is positive and be thankful.

[HappyTexan]

Originally Posted by gcretro

My 401K (via employer) is with charles schwab for many years. I have been maxing out my contributions every year last few and current balance is ballpark 250k. When I logged in and checked my "personal performance" this year YTD, it shows about 3.4%. I was like that's too low! Right? (Last year's return was about 6%).

Here are my fund choices & what their YTD performance was:

MLAIX - MainStay Large Cap Growth I - 7.7
VINIX - Vanguard Institutional Index I - 2.3%
GSMCX - Goldman Sachs Mid Cap Value Instl - 1%
HBIOX - Hartford International Opp HLS IB - 9%
DRGTX - AllianzGI Technology Institutional - 7.1%
New York Life Anchor Account (cash preservation) - 1%

Questions:
1. I have not taken the advice of an expert to manage my 401k till now? Can I rely on the free services charles schwab rep provide?

2. I am clouded on what all constitutes "401k" maintenance activities? How often to monitor/do them etc. (I know a bit about rebalance done it a few times, but not enough to feel confident).

3. I do have the option to select one of thoe target year based "managed" funds instead of my own. Is that a better option? If yes, do I move current funds now?

Looks like we are entering a bear market.
You have lots of stocks in your account so you will feel the impact.

[Oildog]

Your up 3.4% when many energy stocks, which are big parts of many portfolios, are down 30% or more. Not bad.

[andywire]

This is why I manage my money myself. Fidelity is offering a very fair service though. 3.4% is not bad, given the recent moves in the equities market.

[gcretro]

Thanks all.
Here is my current assert allocation (and approx curr balances). The more experienced/knowledgeable folks here - Any advice on what I should change? (I am in my late 30s). One thing I see outright , I have no "bond" funds...

Large Company ------> 27% (approx. 60k)
Small/Mid Co. ---------> 19% (45k)
Intl/Global --------------> 13% (32k)
Specialty ----------------> 17% (42k)
Capital Preservation --> 24% (60k)


List of the available funds (my allocation shown in bold).

Large Company
MLAIX - MainStay Large Cap Growt (10%)
VINIX - Vanguard Institutional Index I (35%)

MidCap
GSMCX - Goldman Sachs Mid Cap Value Instl (25%)
IHSUX - Hartford Small Company R5
MEFZX - MassMutual Select Mid Cap Gr Eq II I
SCETX - RidgeWorth Small Cap Value Equity I
VIEIX - Vanguard Extended Market Idx I

International/Global
RERGX - American Funds Europacific Growth R6 (10%)
HBIOX - Hartford International Opp HLS IB
VTSNX - Vanguard Total Intl Stock Index I

Specialty
DRGTX - AllianzGI Technology Institutional (15%)

Bonds
ANAIX - AB Global Bond I
MHYIX - MainStay High Yield Corporate Bond I
MWTIX - Metropolitan West Total Return Bond I
VBIMX - Vanguard Interm-Term Bond Index I

Capital Preservation
NYLA1 - New York Life Anchor Account I (25%)

[jotucker99]

Originally Posted by mysticaltyger

3.4% is not unreasonable. The S&P 500 stock index is only up 2.14% year to date, and most funds don't beat the index....so you should be glad you are actually beating the S&P 500 stock index so far this year.

It's very unrealistic to expect your 401K balance to keep going up by 10% or more ever year as it has the last 5 years. At some point, you're going to have a losing year. That's just the way it is in investing.

#1. It's really hard to say.
#2. Normally, rebalancing once a year is enough.
#3. Based on your current asset allocation, I think a target date fund would be good for you. You are honest and admit you don't know what you're doing. Most people are REALLLY BAD at asset allocation. Even if they know the right thing to do, they often don't do it. The human brain is not wired to sell the good performing funds and buy the bad performing funds, even though that strategy usually works out best in the long run.Humans are not rational creatures. That's what you have target date funds for. They do it for you. However, I will say, it depends on the company running the target date funds. Vanguard & T. Rowe Prce have good target date funds. Fidelity also has some good target date funds. Other companies may or may not be good.

But your buddy MathJak says that Stocks NEVER lose any money

[mathjak107]

they never have over any 15 year or longer period of time . will they ? no one knows but the track record is good enough to at least run with in my book

[belovenow]

The best advice I have ever received on this topic (and just heard additional justification for it by none other than Tony Robbins) flies in the face of what many professional financial or wealth advisers (people that make money by managing portfolios) recommend... take your 401k money and move it all into the most conservative/protected category available to you (if there's something inflation protected as well - choose that).

It's your money, that you earned with your time (your limited "life" time), and there is no reason to risk it in markets/funds which are without a doubt manipulated by those with much greater knowledge, technology, relationships and money to leverage than you or I ever will have. Additionally, make it so that your "account manager" cannot make money moving things around throughout the year (that is exactly how they earn a living - negotiate a set/acceptible fee for holding your money) and just sit tight adding to your account until you are ready to use it.

Sure you may have friends and or family who make huge gains once in a while your account just plugs along, but you will be insulated from major market adjustments/losses which inevitably strike every few years and wipe out significant percentages of people's retirement savings.