You should split you contributions 50/50 between the New Economy Fund and the EuroPacific Fund...
Why?
Because you are purchasing REGULAR equal dollar amounts of shares, which means that if the price is UP you automatically buy fewer, and if it is DOWN you automatically buy more (while they are effectively "on sale"!)
Any 'safe' option (like cash, bonds, or a "total Return" fund) would be a dumb option because you have DECADES to benefit form the effect of "dollar-cost averaging" your contributions....and putting any of your money in Lowe's stock (unless they give you a discount?) would also be dumb because the time you are MOST likely to need that money early would be if the company is not faring very well (so their stock price would likely be down!)
If they really "match every dollar" you contribute, you SHOULD find a way to contribute the maximum they will match, because that's basically FREE EXTRA MONEY!
Best wishes...
Congratulations on your wise decision to invest in your company's 401k plan and taking advantage of their generous 100% match up to 6%.
The funds you have chosen (other than Lowe's) are highly rated. And you have pretty good category diversification across bonds, domestic funds, and international funds.
Without knowing your 401k's fund choices, it is a bit difficult so say specifically how to add/change funds. Plus, every investor is different, of course, in terms of risk tolerance. But if it were me and given the funds that you've provided, I would lighten up on Lowe's stock and allocate a small percentage to a Stable Value Fund if it is offered. A stable value fund is basically a higher yielding money market type fund (i.e., cash).
So my allocation might look like this (Morningstar category in parentheses)
> 25% PTTRX Pimco Total Return (Intermediate Term Bond)
> 25% RNGGX American Funds New Economy R6 (Large Growth)
> 25% RERGX American Funds EuroPacific Gr R6 (Foreign Large Blend)
> 15% LOW Lowe's Stock Fund
> 10% Stable Value Fund
Hi.
For technical reasons, if you are so inclined, I suggest that you consider keeping half of your 401(k) in cash. In this manner, ALL of your actual contributions (your 6%) would be in cash, and the other 6% (100% company match) could be invested in the same fields/choices you currently have, but without the same amount of risk.
The vast majority of people I have met do NOT understand investing , I mean they have a rough general understanding of "Put money in, hope I get more, take money out later".
So I don't intend to insult you when I say generalities about other people. With that in mind, I have known people who lost half the value of their 401(k) account because they didn't really understand that such a thing was possible, or that they should learn about the stock market and investing and trading.
It's up to you to take the steps, and read to find out how you can make 15-20% on your invested 401(k) funds, while keeping half of it in cash, as a form of risk management. By cash, I also refer to a money market fund, available in many retirement plans.
Good luck.
Hello Y! Community,
I am a current employee of Lowe's and have been investing into my 401(k) for about six to seven months. I am contributing 6% of my check towards my 401(k) and investment funds are as follows:
- PIMCO Total Return Inst 25%
- American Funds The New Economy Fund R6 25%
- American Funds EuroPacific - Class R6 25%
- Lowe's Company Stock 25%
Also, they match every dollar per dollar invested.
Any additional and helpful information would be appreciated!
Thanks!
