Should I make sure the funds contained by my 401k and the funds in my Roth IRA never overlap, i.e., invest contained by the same companies? But still keep hold of both accounts well diversified?
Answers: Ditto Jeff. Look at your Roth and 401k as one portfolio. Tax issues aren't a concern since both are qualified accounts. However, you should adjust your holdings contained by each depiction based on your investment choices.
I'm offered set options contained by my 401k. For example, the international funds are weak. So I allocate a smaller amount dollars to international funds in my 401k and fashion up the difference in my Roth IRA. Since my IRA is near a full service broker, I can buy just around any fund I like.
Well, an even greater concern would be over-diversification. That can dampen down your returns.
As G. M. Loeb once said, "Put all your eggs surrounded by one basket, and hang on to a close eye on the basket."
I don't neccessarily walk for the "ONE basket" theory; but, you probably don't obligation more than 4 or 5 good funds. Especially if you enjoy one that's really performing for you. Remember, you can always move the money to another fund if one's packed up out for you. (You can move it every six months to a year if you want, might cost you a % or so in fees from time to time...)
Just set a aim of say 20% a year, and set up your portfolio to shoot for that aim. I would say 2 or 3 funds for your 401, and 2 or 3 others for your Roth should cover you.
Just hold both diversified. The underlying securities the funds invest in will predictable overlap even if the funds themselves are different. Some people opt to hold on to one more conservative and the other more aggressive. You should cold-shoulder the fact that some funds are surrounded by a 401K and some are in a Roth, and in recent times focus on keeping the whole entity diversified.
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Answers: Ditto Jeff. Look at your Roth and 401k as one portfolio. Tax issues aren't a concern since both are qualified accounts. However, you should adjust your holdings contained by each depiction based on your investment choices.
I'm offered set options contained by my 401k. For example, the international funds are weak. So I allocate a smaller amount dollars to international funds in my 401k and fashion up the difference in my Roth IRA. Since my IRA is near a full service broker, I can buy just around any fund I like.
Well, an even greater concern would be over-diversification. That can dampen down your returns.
As G. M. Loeb once said, "Put all your eggs surrounded by one basket, and hang on to a close eye on the basket."
I don't neccessarily walk for the "ONE basket" theory; but, you probably don't obligation more than 4 or 5 good funds. Especially if you enjoy one that's really performing for you. Remember, you can always move the money to another fund if one's packed up out for you. (You can move it every six months to a year if you want, might cost you a % or so in fees from time to time...)
Just set a aim of say 20% a year, and set up your portfolio to shoot for that aim. I would say 2 or 3 funds for your 401, and 2 or 3 others for your Roth should cover you.
Just hold both diversified. The underlying securities the funds invest in will predictable overlap even if the funds themselves are different. Some people opt to hold on to one more conservative and the other more aggressive. You should cold-shoulder the fact that some funds are surrounded by a 401K and some are in a Roth, and in recent times focus on keeping the whole entity diversified.
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