Rebalance 401(k) annually?

Question

At the start of 2007, I had my 401(k) allocated(existing balance and new contributions) as 40% large cap, 40% small cap, and 20% emerging markets fund. After a stellar year for the emerging markets fund, my 401(k) balance is now about 37% large cap, 36% small cap, and 27% emerging markets. &#xD;&#xA; &#xD;&#xA;Many analysts are calling for a correction for the emerging market funds which which has me debating whether I should rebalance to get back to the 40/40/20 ratio that I started with in 2007. I know alot of financial advisers recommend this be done annually and it makes sense but I&#x27;m a little hesitant to back off a winner.&#xD;&#xA; &#xD;&#xA;Anyone have an opinion on this issue?

grapevinekid · Answer

At the start of 2007, I had my 401(k) allocated(existing balance and new contributions) as 40% large cap, 40% small cap, and 20% emerging markets fund. After a stellar year for the emerging markets fund, my 401(k) balance is now about 37% large cap, 36% small cap, and 27% emerging markets. &#xD;&#xA; &#xD;&#xA;Many analysts are calling for a correction for the emerging market funds which which has me debating whether I should rebalance to get back to the 40/40/20 ratio that I started with in 2007. I know alot of financial advisers recommend this be done annually and it makes sense but I&#x27;m a little hesitant to back off a winner.&#xD;&#xA; &#xD;&#xA;Anyone have an opinion on this issue?

Gunners · Answer

i&#x27;d be interested in this answer as well.  my oppenheimer emerging fund killed it last year and now its sucking.  should i roll that to something else?

wallstreetcappers · Answer

You might want to shift from Large Cap to some cash holdings.Typically in a bad market, small caps get nailed and nothing is safe. I dont mind the Emerging Markets though..

pederson16 · Answer

the tope performers (or stocks that perform less bad if that makes sense) in a down market are the proven winners with international profits and a solid year over year growth strategy&#xD;&#xA; &#xD;&#xA;large cap growth stocks, enough said&#xD;&#xA; &#xD;&#xA;move everything into international and large cap, maybe a bond fund or a little cash like wallstreetcappers said&#xD;&#xA; &#xD;&#xA;you always want to be diversified but in down markets small and mid caps don&#x27;t fare well&#xD;&#xA; &#xD;&#xA;just my two cents&#xD;&#xA; &#xD;&#xA;good luck

Vermeer · Answer

I think it might take more detail about what emerging markets are covered.China may be due for a leaking balloon, but India and Brzail may not be.

One other element may be considering some value/dividend fund if you did not want to go to cash.

LeRinkRat · Answer

go to CASH!!!&#xD;&#xA; &#xD;&#xA;and maybe put 20-25% in the QID and/or the SDS IF you want to speculate.

bobcat26 · Answer

I just went 50% Large Cap and 50% International and I&#x27;ve been killed lately.  I thought I was doing a smart thing by moving a chunk overseas, but the international fund is 15% Japanese and tanking.

Gunners · Answer

i just moved a lot into short term reserves and bonds.  I had been just loading 50% into the S&amp;P.  no longer will i do that, not this year at least.  My plan at vanguard doesn&#x27;t exactly offer as much as i would like.  right now i look like this:&#xD;&#xA; &#xD;&#xA;15% S&amp;P&#xD;&#xA;20% Short Term Reserves/Money Market&#xD;&#xA;20% Vanguard Bond fund&#xD;&#xA;21% International stock index&#xD;&#xA;6% First Eagle Global&#xD;&#xA;5% Morgan Growth&#xD;&#xA;5% Developing Markets&#xD;&#xA;5% Mid Cap&#xD;&#xA;3% Small Cap&#xD;&#xA; &#xD;&#xA;i am only 25 and can afford some more risk and averaging down at this point in my retirement cycle.  Anyone with any thoughts on that allocation/rebalance?

kickinA · Answer

[Quote: Originally Posted by bobcat26] &#xD;&#xA; I just went 50% Large Cap and 50% International and I&#x27;ve been killed lately.  I thought I was doing a smart thing by moving a chunk overseas, but the international fund is 15% Japanese and tanking.[/Quote]&#xD;&#xA;You&#x27;re not alone bobcat. I moved my allocations from small and mid to large caps. Still getting killed as well. &#xD;&#xA;60% Large Caps&#xD;&#xA;20% Oversea Fund&#xD;&#xA;20% Bonds

asloper6001 · Answer

401k aren&#x27;t as great as companies make them out to be. I would rather pull all my money out and invest it somewhere else. 401k equals your job finding ways to steal your money and make ways to have better relations with there financial partner. 401k suck.

THEMUGG · Answer

Someone matching me 50 cents on the dollar hardly "sucks".

Gunners · Answer

[Quote: Originally Posted by THEMUGG] &#xD;&#xA;Someone matching me 50 cents on the dollar hardly "sucks".  &#xD;&#xA;[/Quote]&#xD;&#xA;exactly.  $5,000 a year of free money for me.  that doesn&#x27;t suck

asloper6001 · Answer

Think what you want, for I have taken all my money out of my 401k.

I will most likely be dead before I can spend all my money at 60.

GL though and I am impressed with your companies brainwashing skills.

THEMUGG · Answer

[Quote: Originally Posted by asloper6001] Think what you want, for I have taken all my money out of my 401k. I will most likely be dead before I can spend all my money at 60.GL though and I am impressed with your companies brainwashing skills.&#xD;&#xA;&#xD;&#xA;[/Quote]&#xD;&#xA; &#xD;&#xA;What, you went ahead &amp; paid the penalties w/o moving your money around? Maybe you didn&#x27;t have the option.........

Rebalance 401(k) annually?

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