401k--separate or combine? (funds, accounts, increase, savings)

[SamNC]

I have a 401k from work and a 457 account from work as well. They basically do the same thing, that is, tax-deferred savings for my retirement. I am 30 y/o and have about $25,000 total in the 401k. I also have a state pension retirement fund as well.

At any rate, I previously invested about 95% of my monies in my 401k (300 a paycheck) and put a marginal amount (50) in the 457. The 457 is one of the highest risk funds I could obtain, and I really didnt care about how it worked out since it is not much money.

My 401k has decreased in value last quarter but the 457 increased. I am not the kind of person to chase after each quarter for the highest returns since the past is the past and isnt a guide for the future, but should both funds be equally balanced, at least for the sake of diversity. If the answer is YES, is it better compounding wise just to keep more in the 401k? In other words, if I had 50,000 in one account, would that earn more money in 30 years than 25,000 in TWO accounts, assuming each earns the same interest? That is the key question I think; if compounding works so that the more money is in one account, the more I earn, I would be better off keeping the money primilarily in just one account, but if this is a false argument, then I might do a $200/$200 split between both accounts.

[LongArm]

No, one $50k account won't compound any faster than two $25k accounts...or ten $5k accounts, for that matter. All that matters is the total $ amount invested between all accounts.

As to whether you should rebalance accounts, that depends on the investments contained within. In general, occasional rebalancing is a good long-term strategy because you're moving money from investments that have done well of late to those that haven't. This means that you're generally buying more shares when prices are lower, and buying fewer shares when prices are higher.