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ADP 401k - Where to invest?

T1T0 376 May 8, 2012 at 08:35 AM
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I dont know much about 401k options, but have been contributing for a few years. Currently most is going into Invesco Stable Asset Fund with a percentage in SSgA S&P 500 Index Fund & MainStay Large Cap Growth Fund - Class R2. I would like to invest in other funds for a chance to make a return on my investment.

Any info where I should put it?
Also, what about account rebalance? (Annual, semi-annual, quarterly) what does this do?

Below are the options available:

Invesco Stable Asset Fund - Class ADP85
$1.000000

JPMorgan Government Bond Fund - Class A
$11.590000

PIMCO Total Return Fund - Class A
$11.260000

DWS Global High Income Fund - Class S
$6.990000

AllianceBernstein Global Bond Fund - Class A
$8.470000

T. Rowe Price Retirement Income Fund - Class R
$13.570000

T. Rowe Price Retirement 2010 Fund - Class R
$15.850000

T. Rowe Price Retirement 2020 Fund - Class R
$16.980000

T. Rowe Price Retirement 2030 Fund - Class R
$17.870000

T. Rowe Price Retirement 2040 Fund - Class R
$18.000000

T. Rowe Price Retirement 2050 Fund - Class R
$10.040000

BlackRock Global Allocation Fund, Inc. - Investor A Class
$19.100000

BlackRock Equity Dividend Fund - Investor A Class
$19.290000

Davis New York Venture Fund - Class A
$35.400000

SSgA S&P 500 Index Fund
$13.204610

MainStay Large Cap Growth Fund - Class R2
$7.730000

Fidelity Advisor Leveraged Company Stock Fund - Class T
$33.710000

Neuberger Berman Genesis Fund - Advisor Class
$28.380000

Thornburg International Value Fund - Class R4
$25.720000

Putnam International Capital Opportunities Fund - Class A
$30.820000

13 Comments

1

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#2
If you want a set it and forget it option, just choose the target date fund closest to your projected retirement date. The fund will automagically reallocate itself to adjust its risk profile as the target date approaches.
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L5: Journeyman
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#3
Thanks for the info, although I can't seem to find anything about TDF on my 401k site. After looking into this, it seems that the ADP 401k options aren't that great.

I have attached the fund information which shows expense ratios, etc.
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#4
What makes you think they are "not that great"?
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#5
Automatic account rebalancing is great. It allows you to cash in on the highs while they are there, and sell off some of the lows while they are there. That is a simple way of thinking of it. It basically allows you to set your amounts back to what you set them to be. This helps maintain a target amount of risk. Overtime some of your funds might gain while others decrease. Say you want 15% international exposure but your US Large caps are just exploding pulling your weight to say 12% international exposure as a whole. It allows you to go back to your goal and capture those profits. I am not doing a great job of explaining it but there is better online. http://www.smartmoney.com/retirem...vestments/

I re balance at least twice a year, but no more than quarterly. I can dig up some of the info from my plan about how re-balancing increases your ROI if you really want.
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#6
Quote from PiratesSayARRR View Post :
What makes you think they are "not that great"?
I guess they are ok, but after some searching it seems there is better out there.

Quote from flatlight View Post :
If you want a set it and forget it option, just choose the target date fund closest to your projected retirement date. The fund will automagically reallocate itself to adjust its risk profile as the target date approaches.
Is the T Rowe Price Retirement Fund a TDF?
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#7
Quote from LiquidRetro View Post :
Automatic account rebalancing is great. It allows you to cash in on the highs while they are there, and sell off some of the lows while they are there. That is a simple way of thinking of it. It basically allows you to set your amounts back to what you set them to be. This helps maintain a target amount of risk. Overtime some of your funds might gain while others decrease. Say you want 15% international exposure but your US Large caps are just exploding pulling your weight to say 12% international exposure as a whole. It allows you to go back to your goal and capture those profits. I am not doing a great job of explaining it but there is better online. http://www.smartmoney.com/retirement/planning/when-to-rebalance-your-401k-investments/

I re balance at least twice a year, but no more than quarterly. I can dig up some of the info from my plan about how re-balancing increases your ROI if you really want.
Thanks for the info. Will look into this. I really just want to contribute and let it sit without doing much. I don't log in and check my account very often.
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#8
Quote from r0b3rt View Post :
Thanks for the info. Will look into this. I really just want to contribute and let it sit without doing much. I don't log in and check my account very often.
My 401k provider allows auto rebalancing. I set it once and it just does it. Works super well. I don't have to think about it or anything.
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#9
Quote from r0b3rt View Post :
I guess they are ok, but after some searching it seems there is better out there.
Better in terms of what? I'm trying to determine if you actually know what you are looking at.
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#10
What's with listing the share prices instead of expense ratios and sales loads, in a convenient form, of course. laugh out loud

I'm surprised a company as large as ADP offers such a poor selection of 401K investments. The cheapest one I see is an S&P 500 index fund with a whopping 0.70% expense ratio, and their T. Rowe Price funds are offered through higher cost "R" shares, rather than the cheaper shares they normally sell directly to customers.

I'd probably choose a mix of the SSgA S&P 500 fund and PIMCO Total Return, but they're not suitable for people who can't tolerate risk.
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#11
Quote from r0b3rt View Post :
Is the T Rowe Price Retirement Fund a TDF?
Yes.

As flatlight suggested, the best option for you (since you said "I really just want to contribute and let it sit without doing much. I don't log in and check my account very often.") is a target retirement fund. It is truly set-it-and-forget-it. You simply pick the date closest to when you want to retire, put all your money into it, and walk away. It automatically rebalances for you and shifts what you're invested in as you move closer to your retirement date.

Also, is there an employer match offered? If not, you may want to consider opening a Roth IRA with Vanguard and filling it with their target retirement fund appropriate for your age instead of sticking with the 401(k) you're being offered.
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#12
Quote from PiratesSayARRR View Post :
Better in terms of what? I'm trying to determine if you actually know what you are looking at.
I was just searching the internet and came across a few websites and reviews that mention ADP is not the greatest. You're right, I have no idea what I am looking at. That's why I posted this thread, to get some suggestions. Do you have any?
Quote from larrymoencurly View Post :
What's with listing the share prices instead of expense ratios and sales loads, in a convenient form, of course. laugh out loud

I'm surprised a company as large as ADP offers such a poor selection of 401K investments. The cheapest one I see is an S&P 500 index fund with a whopping 0.70% expense ratio, and their T. Rowe Price funds are offered through higher cost "R" shares, rather than the cheaper shares they normally sell directly to customers.

I'd probably choose a mix of the SSgA S&P 500 fund and PIMCO Total Return, but they're not suitable for people who can't tolerate risk.
Thank you for the info!
Quote from Brian1 View Post :
Yes.

As flatlight suggested, the best option for you (since you said "I really just want to contribute and let it sit without doing much. I don't log in and check my account very often.") is a target retirement fund. It is truly set-it-and-forget-it. You simply pick the date closest to when you want to retire, put all your money into it, and walk away. It automatically rebalances for you and shifts what you're invested in as you move closer to your retirement date.

Also, is there an employer match offered? If not, you may want to consider opening a Roth IRA with Vanguard and filling it with their target retirement fund appropriate for your age instead of sticking with the 401(k) you're being offered.
Thank you! Yes, my employer matches to a certain %. I am probably just going to put it all in the target retirement fund.
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#13
Quote from r0b3rt View Post :
Yes, my employer matches to a certain %. I am probably just going to put it all in the target retirement fund.
To maximize your dollars, you may want to consider contributing only up to your employer's match, then contributing the rest of your available money to a Roth IRA.
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#14
r0b3rt, is your 401K for a company separate from ADP that uses ADP to administer it? Because when a 401K charges 2-5 times the costs of retail mutual funds, it's a sign the employer didn't do much research at all when choosing the provider, and this is the first time I've heard of such high costs when no life insurance company was involved. One person found that his employer's plan cost so much, at least 2% a year, total (for an S&P 500-like fund, yet), that every one of a dozen other providers he phoned were cheaper, including one that said their firm was suitable only when there were more than 1,200 participants.
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