Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




Any advice for this 401K SMART Plan?

Reply to topic
Money Talk > Investing, Stocks and Bonds

Author Thread
jmr1068204
New Member


Cash: $ 1.05

Posts: 5
Joined: 03 Oct 2014

Any advice for this 401K SMART Plan?  Reply with quote  

I work for Publix Supermarkets. I love the benefits, perks and soon-to-be pay of a position that I will be moving into in January, 2015. Publix gives employees free stock each year. I have been there for 3 years and have about $5,000 worth of free stock (about 150 shares @ 33.85 per share currently). When I started 3 years ago, that stock was like $22.50. It is expected to rise again in October. That is doing decently by itself. I'm planning on a long-term career with the company and may retire with them (I'm 33 currently).

However, they also match 401K contributions 50% for every dollar that you put in, up to $750/year. I plan to add more than that. As much as I can.

They provide us with this chart: https://unsee.cc/neguzadi for 401K SMART plans. My understanding is that Publix works with the company (in this case, a company named Voya Financial ING) and your 401K contributions get invested by Voya into whatever stock you choose. At the end of the year, they take their fees off from the top and the rest stays in your 401K. I don't want to put my 401K into the Publix stock because I know that it is bad to put everything into one company or stock.

We are allowed to basically divide up whatever percentages we wish into separate types of stock.

Looking at the chart, I see some interesting growth in the T. Rowe Price Blue Chip Growth fund (TRBCX), the T. Rowe Value Fund (TRVLX), Royce Pennsylvania Mutual Fund (PENNX), and SSgA S&P MidCap Index Fund - CLASS XII. Would it be better to go all-in on one of these or divide it up among two, three or four of them?

Any advice on what these are in layman's terms and which ones are better? Is it really best to just go by the ones with the highest percentage of growth so far over the years? It also makes me wonder about how many fees each of these charge. The fees are apparently taken off the top before out financial statements are given each year. I'll be checking with HR and such, but I am seeking a little info from those who know about these stocks/companies.
Post Fri Oct 03, 2014 4:11 am
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 749.05

Posts: 3642
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
Looking at the chart, I see some interesting growth in the T. Rowe Price Blue Chip Growth fund (TRBCX), the T. Rowe Value Fund (TRVLX), Royce Pennsylvania Mutual Fund (PENNX), and SSgA S&P MidCap Index Fund - CLASS XII. Would it be better to go all-in on one of these or divide it up among two, three or four of them?


I would put it all in TRBCX - that gives you good diversification across the entire US stock market. The 5 year performance averaged 19.03%/yr, that is nearly the same as the general stock market (as measured by the Dow Jones or the SP500). The 10-year performance averaged 9.76%/yr, again almost the same as the general stock market.

Normally, over the longterm, 30 years, the general market averages about 11%/yr. You're age 33, your main interest is the 30-yr performance. An 11%/yr, $5000/yr investment will be $1.1M in 30 yrs. You can adjust according to your goal - eg, if you want $2.2M you would put in $10,000/yr rather than $5000/yr.

quote:
Is it really best to just go by the ones with the highest percentage of growth so far over the years?


That is OK but only for longterm, over 20 yrs. But if you chase performance in the shortterm, 3 or 5 yrs, you learn that last year's winners are likely to be next year's losers. Instead, select based on what you want to own - eg, large growth companies - or small starting companies.

You are correct about not owning stock in the company that you work for - I would keep it to a minimum (accept the gifting of course, but sell at appropriate times).
Post Fri Oct 03, 2014 4:05 pm
 View user's profile Send private message
jmr1068204
New Member


Cash: $ 1.05

Posts: 5
Joined: 03 Oct 2014

 Reply with quote  

The link to the chart that I mentioned doesn't seem to be working properly.

The chart that I am referring to is:
Post Fri Oct 03, 2014 11:02 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 749.05

Posts: 3642
Joined: 21 May 2006
Location: arizona
 Reply with quote  

TRBCX and the SSgA SP500 own nearly the same stocks - so you could pick either one. The difference is that the SP500 is an unmanaged fund and TRBCX is managed. In the shortterm (1 to 5 yrs) the manager does enough trading in & out to slightly 'beat' the unmanaged index - but after 10 years and beyond the performance converges. But usually the cost of the manager more than eats up the difference. The reports say that only 15% of managers are able to beat the SP500 - and the winners are not always the same 15%. I use the unmanaged SP500.
Post Fri Oct 03, 2014 11:50 pm
 View user's profile Send private message
jmr1068204
New Member


Cash: $ 1.05

Posts: 5
Joined: 03 Oct 2014

 Reply with quote  

quote:
Originally posted by oldguy
TRBCX and the SSgA SP500 own nearly the same stocks - so you could pick either one. The difference is that the SP500 is an unmanaged fund and TRBCX is managed. In the shortterm (1 to 5 yrs) the manager does enough trading in & out to slightly 'beat' the unmanaged index - but after 10 years and beyond the performance converges. But usually the cost of the manager more than eats up the difference. The reports say that only 15% of managers are able to beat the SP500 - and the winners are not always the same 15%. I use the unmanaged SP500.


So out of curiosity, who manages the "unmanaged" fund?
Post Sat Oct 04, 2014 3:00 am
 View user's profile Send private message
Wino
Senior Member


Cash: $ 113.80

Posts: 560
Joined: 03 Aug 2012
Location: Dubai
 Reply with quote  

quote:
Originally posted by jmr1068204
So out of curiosity, who manages the "unmanaged" fund?

No one. The fund is bought and sold by an algorithm. The fund buys and sells stocks according to the criteria set forth by the fund management directors. Any index fund follows its own algorithm similarly.

Essentially, a computer is managing the fund.
Post Sat Oct 04, 2014 5:06 am
 View user's profile Send private message
jmr1068204
New Member


Cash: $ 1.05

Posts: 5
Joined: 03 Oct 2014

Expense ratios  Reply with quote  

I finally found this info after digging enough in the company:

Investco Stable Value Trust Fund - 0.60% expense ratio.
PIMCO Total Return Fund Institutional Class (PTTRX) - 0.46% expense ratio.
SSgA S&P 500 Index Non-Lending Series Fund - Class E (CMDVN) - 0.13% expense ratio.
T. Rowe Price Value Fund (TRVLX) - 0.85% expense ratio.
T. Rowe Price Blue Chip Growth Fund (TRBCX) - 0.76% expense ratio.
SSgA S&P MidCap Index Fund - 0.06% expense ratio.
Royce Pennsylvania Mutual Fund - Investment Class (PENNX) - 0.90% expense ratio.
American Funds EuroPacific Growth Fund - Share Class R-4 (REREX) - 0.85% expense ratio.
SSgA Conservative Strategic Balanced Fund 0.40% expense ratio.
SSgA Moderate Strategic Balanced Fund - 0.40% expense ratio.
SSgA Aggressive Strategic Balanced Fund - 0.40% expense ratio.

I'm rather iffy about the international funds stuff. I live in the USA, so I don't care for investing into Europe's growth.

I can choose whatever percentage for each of the stocks/funds...apparently there is no minimum or max.

I do not have a Roth IRA, IRA or any other general retirement accounts other than the stock that I own with Publix. I am, however, virtually debt free. No mortgage, car payments, major debts, etc.

I'm settling into a career with the company. My cap pay including benefits would be about $40K/year. I'm 32 years old and got a pretty late start in life financially due to helping family and basically growing up in a poor family. I don't regret choosing to help them, however. I'm a rather frugal guy who doesn't need what most people think they need in life to live. I only buy used cars. I want a house in the country eventually, but I plan to save a considerable amount first as a downpayment so that the mortgage wouldn't be insane. I'm not a "brand" chaser and generally don't care for most of the crazy expensive stuff when I can buy the "plain" stuff and enjoy it just as well. So generally, I can easily live on half of what most people think they need and still be happy and enjoy life.

One burning question that nobody at the company seems to be able to answer for me: If I invest the 401K into x stock/fund/whatever and that particular one plummets to nothing, will I OWE any money as a result or would I just lose everything that was invested into that particular stock or fund?
Post Tue Oct 07, 2014 5:26 pm
 View user's profile Send private message
blixet
Preferred Member


Cash: $ 32.55

Posts: 156
Joined: 28 Apr 2013
Location: Southern California
 Reply with quote  

You'll never owe money (as long as you are not borrowing money to invest). And although it is possible an individual stock could go to zero, it isn't likely that would ever happen with a mutual fund.

Information is more valuable sold than used – Fischer Black
Post Tue Oct 07, 2014 10:29 pm
 View user's profile Send private message
jmr1068204
New Member


Cash: $ 1.05

Posts: 5
Joined: 03 Oct 2014

 Reply with quote  

I was thinking of doing these for sure:

SSgA S&P 500 Index Fund Class E - 50%
SSgA S&P MidCap Index Fund Class XII - 25%

I'm really not too fond of bonds at all, and I understand that next year the Feds think the interest rates are going to rise. The two T. Rowe funds don't seem worth it after the fees. The EuroPacific growth fund...I just have personal issues with investing in another country given our financial state in the USA.

That leaves the Royce Penn Mutual Fund and SSgA Aggressive Strategic Balanced Fund - Class I. Would it be crazy and self-defeating if, on top of those two, I also did that one at 25%? Or am I basically just investing in a mixture similar to the first two SSgA MidCap and Index 500 and doubling the risk in those markets?

What if for the last 25%, I did the Royce Penn. Mutual Fund? Do you think that would be a good choice?

Are there any among those that pay dividends?
Post Wed Oct 08, 2014 6:50 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 749.05

Posts: 3642
Joined: 21 May 2006
Location: arizona
 Reply with quote  

At age 32 I would focus on wealth building rather than income.
Post Thu Oct 09, 2014 10:55 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2018