My 401k strategy

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New 401k in Vanguard
Two weeks into working for new employer, today I am able to make my 401k selections from Vanguard. Sweet! It only took me a few minutes to make my choices:

(30%) S&P 500 index fund (VFINX)
(30%) Winsor II (VWNFX)
(40%) International value (VTRIX)

If there is one thing I learned from the recent market drop, that is: DO NOT chase the short term gains, pursue the long term gains instead. Along these lines, I pass over all the sexy names such as Dodge Cox (which lost quite a bit because of Fannie/AIG), Goldman. I am stay with good old Vanguard.

Also, now it seems I missed the contribution of first half of this month, I decided to play some catch up: contribute slightly more in next 3 pay periods.

The old 401k
Move to Rollover IRA? Move to the new 401? Or stay with the old 401k. My old 401k took quite a hit because I was in stock funds all the time, but I still got choices. I gave it quite a thought and here is my decision: stay put for now, move to IRA/new 401k when the market is not volatile. I don’t want to lose money during the transfer: i.e., sell low and then buy high a few days later. I am aware of the pitfall of rollover IRA: early withdraw penalty (early 50s) for IRA.

I find the following article about Rollover interesting.

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