‘Any thoughts on a combination that would be better than the target?’: Feeling risky in my 30s, but are my 401k choices right?

Hi Help Me Retire,

So, I’ve been doing some reading and it seems like people are not big fans of Target Dates because they don’t always perform as well as we hope. I’m in my early 30s and I think I can afford to take some risks right now, you know?

My 401k is currently sitting in a Target 2055 fund, but I have the option to mix things up a bit. I’ve got a bunch of different funds from Vanguard, Fidelity, JP Morgan (like VFIAX, JFTUX, VIMAX, FBKFX, JEMWX, VGELX, you name it) and some other random ones like Artisan High Income Fund (APHFX) and Loomis Government Fund (NELYX).

Do you think I should switch things up and create my own mix instead of sticking with the target fund?

Thanks for the help!
Seeking Guidance

Goodbye!

Response from HELP ME RETIRE:

Hello There,

Congratulations on taking the time to evaluate your current investment strategy and being proactive about potentially making changes to better align with your risk tolerance and investment goals. It’s great that you are considering a more hands-on approach rather than relying solely on a Target Date Fund.

Given your willingness to take on a bit more risk, it might be beneficial to consider a diversified portfolio that includes a mix of domestic and international equities, fixed income, and possibly some alternative investments for added diversification. Since you have access to a variety of Vanguard, Fidelity, and JP Morgan funds, you have the opportunity to create a custom allocation that suits your preferences.

A common approach to building a diversified portfolio is to allocate a certain percentage to large-cap, mid-cap, and small-cap funds for domestic equities, along with an allocation to international equities. Additionally, consider including fixed income funds to provide stability and income, and alternative investments for further diversification.

As for the specific funds you mentioned like VFIAX, JFTUX, VIMAX, FBKFX, JEMWX, VGELX, APHFX, and NELYX, it would be wise to research each fund’s objective, performance history, fees, and risk profile to determine which ones align best with your long-term investment goals.

Ultimately, the best approach is to create a diversified portfolio that reflects your risk tolerance, time horizon, and financial objectives. Consider consulting with a financial advisor who can provide personalized guidance based on your individual circumstances. Remember, regular review and adjustments to your portfolio are essential as your financial situation and investment goals evolve over time.

Best of luck with your investment decisions, and feel free to reach out if you have any further questions or need assistance with your retirement planning.

Help Me Retire