I have a baby 401k account from my firm acquisition in January. The balance from my old 401k has not been rolled over and nobody has any idea when it will be added to the new 401k (it's still performing very well so I'm content to just let it be). I just checked the new account for the first time yesterday and I got this notice saying that my funds are not well diversified. It looks like I have too much in bonds and not enough in large cap stocks. They have an option to auto-rebalance. Would you do that, or just wait until you have time to actually talk to an advisor? I'm inclined to try the auto-balance since there isn't a lot of money in the account yet, but if people who actually know what they are doing think it is a terrible idea then I wouldn't. Any advice?
I can choose either annual or semi-annual. Currently my investments are as follows: Cash equivalents: 13% Bonds: 26% Large-cap stocks: 26% Mid/small-cap stocks: 17% International stocks: 18%
The suggested allocations from auto-rebalance are: Cash equivalents: 2% Bonds: 13% Large-cap stocks: 38% Mid/small-cap stocks: 15% International stocks: 32%
I just selected a moderate portfolio when I turned in the paperwork, but I would like to be fairly aggressive right now since I'm still fairly young. They also have an option where you can rebalance the funds yourself, but I wouldn't do that without talking to someone first so I thought the auto might work until I have time to look at everything in more detail and set up an appointment with an advisor.
Okay, so the auto-rebalance won't occur until end of calendar year. So I'm just going to reallocate 50% from the moderate fund to the aggressive fund and see how it performs over the next few months, and if it does well then I'll just move it all. Can't hurt, I guess. When I get my other 401k rolled into this one I'll talk to someone and get everything where it needs to be since the old 401k balance is substantial.