I was hoping to get advice on my 401k asset allocation. I'm 25 years old, good income, putting 70% of income into tax-sheltered accounts.
The thing is investing is new to me and I have no idea what I'm doing. These are my goals when picking my assets in Fidelity (please tell me if any of these goals are pointless):
- 90/10 stock/bond mix since I'm young
- Prefer index funds over mutual funds since they're cheaper (I have yet to learn about ETFs)
- Prefer funds with higher Morningstar rating (does this even matter?)
- Keep it simple since I'm a beginner, focus on a few popular index funds
I have some questions:
- How much does a good asset allocation actually matter? I'm worried about choosing poorly and hampering my gains over time or even incurring losses. This stuff seems highly opinion based (e.g. whether you're bulling/bearish on US stocks).
- If diversification is the goal, why not divide my money evenly between large-cap/mid-cap/small-cap/international?
- I'm only seeing 6% returns year to date. Is this a cause for concern or too early to tell since I've been doing this for <1 year?
Asset allocation screenshot: http://ift.tt/2vUTiAT
Submitted August 20, 2017 at 01:18PM by assetthrowaway http://ift.tt/2weUBNP
