401k portfolio

Dec 25, 2019 26 Comments

Merry Christmas everyone !!

I recently saw a post on blind where people were talking about rate of returns on their 401k. The post had numbers like 30%, 37% and I was surprised.

I just graduated college and started putting in 401k. Being the noob that I am, I chose the fidelity net benefits and the plan where they manage the portfolio for you.

But this yielded a return of just 2.21 % so far ( I joined msft only in October and have been maxing out my contribution)

I am wondering what’s the composition of your 401k ? How do I manage mine to get higher returns ? Do you recommend taking it off from auto managing option from fidelity and managing it on my own ?

Thanks !!!

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TOP 26 Comments
  • You have to give it more than a few months . The one talking about 30+% returns have absolutely not averaged that over any significant period of time like 20 years.

    Some index funds have give such handsome returns this past year... but not if you looked at them at certain times of the year! If you look at major market indices since 1999 returns are more like 4% per year
    Dec 25, 2019 3
  • Intel
    andy_grove

    Go to company page Intel

    andy_grove
    Read Bogleheads forum top to bottom. The wiki. The Bogleheads guide to investing book. JL Collins book the simple path to wealth.
    Investing is a long term strategy (for 401k, ira, etc funds that are not near-term needs). Stop looking at returns by days, weeks, months. Look at years. Compound interest / growth is the 8th wonder of the world, is a saying. Money grows over time. Not short windows of time. Dont day trade. Research and buy and hold solid index funds like VTSAX and set and forget. Vtsax is up huge this year. I will retire a multi-millionaire on VTSAX alone in a couple decades. And that's not even counting RE or savings or other investments. just my one main index fund in VG. Read the simple path to wealth, you'll understand.
    Dec 26, 2019 0
  • eBay
    stat-sig

    Go to company page eBay

    stat-sig
    If you put your money in any Index fund tracking S&P 500 then you’d have about 30% return this year on it.

    401k also have high fee funds (actively managed) so check whether the automanaged fund is actively managed, index fund, or target dated retirement fund. If you don’t know how to manage just select a Target dated retirement fund (based on your approx retirement age 65) and forget about it to keep fees minimum.

    Comparing these three types:
    Target dated fund will have most conservative returns - low risk low reward
    Index Funds are Medium Risk Medium Reward
    Actively managed funds are high risk low/medium reward
    Dec 25, 2019 1
  • Juniper
    RFBW87

    Go to company page Juniper

    RFBW87
    I also had 2% return on my 401K until I started trading using their Brokerage link account that is a brokerage account connected to the 401K account. I am getting around 14% return year over year.

    With 401K you can afford to wait even if there are losses in your account. I was down by 27K for several months because of Tesla stock until it recovered. So, just invest in good companies and index funds to get better returns.
    Dec 25, 2019 2
  • As long as you are taking an appropriate level of risk for your tolerance and horizon, ignore 2% return over two months.

    Plus, everybody brags about their wins and never mention their losses...
    Dec 25, 2019 1