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On the side of a hill in the deep forest green, tracing a sparrow on snow-crested ground,
blankets and bedclothes the child of the mountain sleeps unaware of the clarion call.
On the side of a hill, a sprinkling of leaves washes the grave with silvery tears,
a soldier cleans and polishes a gun.
War bellows, blazing in scarlet battalions, generals order their soldiers to kill
and to fight for a cause they've long ago forgotten

Monday, June 20, 2011

Investors of the World, Unite

Once again I reach out to the great internet brain to ask a question.

I'm re-evaluating the funds I place my 401k into. With the (at least Wall Street) economy in slightly better shape, I think the prospectuses are a little more truthful on how funds will perform going forward. Unfortunately, I don't have access to my preferred funds (from American Funds).

When I signed up last year, I went with some funds that I thought were good. And I did pretty well. However, I'm now looking at performance vs. fund fees and thinking of switching two funds to lesser well known names (but performing just as well) funds that have about half the administrative fees (0.8% average to 0.4% average, in case you want to know). The fund mix would remain the same (growth and index funds).

But here is the question, should I keep my existing amounts in the original accounts (the returns more than cover the admin costs, so I won't lose money), or transfer the balances into the new funds (as well as direct withholdings to them)?

I'm of two minds. On one hand, for simplicity (and lower fees) I should transfer the existing account amounts. On the other hand I like having diversity to spread risk (and these funds are solid, or I wouldn't have picked them in the first place). These are both about equal in my mind at the moment. Any other ideas I should take into account?

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