401k investments - what to do?

[Emeric Harney]

Hey everybody, I wanted to get peoples thoughts on how to best handle my 401k investment portfolio. First the background info: I’m 30 years old and unfortunately have only been contributing for the last 3.5 years. I’m at a place where my budget comfortably allows me to contribute 8k a year and my company matches half of that (the max match). We use Principal for our 401k. Now that I’m paying more attention to growing my personal wealth more though, I’m super confused on where to move the majority of my investments and where to invest my weekly contributions. For instance, I use the app Personal Capital and first it tells me that I’m going to be losing a large chunk of my money to fees, so I tried to find some funds that had low fees, and was contributing a majority of my money to my 2050 goal fund (low fees to my knowledge). But then personal capital was saying that my portfolio wasn’t diversified enough to really be protected. So I’m sure it depends on my comfort and investment strategy, but if I’m generally comfortable with market swings and want long term growth, what should I prioritize? Diversity (I️ currently have small cap, medium cap, large cap, foreign research, black rock but most funds available to me seem to have 1.15% fees or more) or do I emphasize the target date? Or if you’re not comfortable giving out advice - any idea where I might find someone? Personal Capital offers it, but I️ don’t have a large enough portfolio. Thanks for your help!

[Ernesto Hernandez]

I'm going to politely disagree with Ryan. Fees can literally be the death of you in a 401k. A 1% difference can seem insignificant but is detrimental when compounded over time. 

Ultimately, you have to look at your net returns. Compare the performance versus the fees and see what is most profitable. Index Funds are likely your best friend. Statistically, almost nothing beats them and when you factor in the fees for something that may beat them you end up at zero because of the fees. I've gotten a 16% return over the last 12 months paying 2 and a half basis points in fees. 0.025. I'll take that all day long. 

Study your options, ser what's available. Use calculators to compare returns between funds and factor in fees. 

www.jlcollinsnh.com has an entire tab dedicated to calculators. 

https://www.reddit.com/r/personalfinance/comments/...

Watch the first 2 videos. Mandatory for anyone with a 401k.

Good luck.