Bobby asked in Business & FinanceInvesting · 8 years ago

why is the percent so different on 401k between the different choices? such as walmart stock is a lot lower %?

These are all my choices when picking which ones I want for my 401k! I do not understand why the walmart one is so much lower percent wise than the others? I have never changed mine and I have it all in the my-retirement 2040 fund plus I own 30 shares of walmart which I buy 2 shares bi-weekly now! I just want to know why the bond or the funds and trusts seem to out perform the walmart stock and is this normal? I have came to this page and it is always like this! Why would anyone want to pick any of the lowe ones even if they were getting ready to retire? Seems to me I would want my money in the 2040 funds or higher so my money could do better!

Fund inception date/ gross expense ratio/ month YTD

EQUITY/STOCK

BLACKROCK RUSSELL 1000 INDX TR 08/28/2009 0.04% 3.12% 12.88%

Lipper Large-Cap Core Funds Average 2.77% 12.43%

BLACKROCK RUSSELL 2000 INDX TR 08/28/2009 0.07% 2.57% 12.40%

Lipper Small-Cap Core Funds Average 2.11% 11.99%

DAVIS NY VENTURE TRUST 08/28/2009 0.41% 2.46% 11.47%

Lipper Large-Cap Core Funds Average 2.77% 12.43%

INTERNATIONAL EQUITY FUND 08/28/2009 0.47% -0.17% 10.32%

Lipper International Large-Cap Growth

Funds Average 0.23% 12.54%

RAINIER LARGE CAP GROWTH 3 06/10/2010 0.57% 3.69% 16.84%

Lipper Multi-Cap Growth Funds Average 3.06% 15.62%

SMALL MID CAP VALUE FUND 01/06/2012 0.64% 1.31% N/A

TBC SMID CAP GROWTH TRUST 08/28/2009 0.61% 1.70% 15.29%

Lipper Small-Cap Growth Funds Average 2.24% 14.20%

WAL MART STORES INC 1 N/A N/A 4.28% 3.09%

BOND/FIXED INCOME

BOND FUND 08/28/2009 0.30% -0.33% 2.43%

Lipper Large-Cap Value Funds Average 2.76% 11.99%

MONEY MARKET/STABLE VALUE

FFI PREMIER INSTITUTIONAL FUND 2

7-Day Yield: 0.18% 01/27/1997 0.16% 0.01% 0.04%

Lipper Institutional Money Market Funds Average 0.01% 0.02%

ALLOCATION FUNDS

MYRETIREMENT 2000 FUND 09/04/2009 0.30% 0.24% 5.14%

Lipper Mixed-Asset Target 2010 Funds Average 0.50% 5.77%

MYRETIREMENT 2005 FUND 09/04/2009 0.30% 0.24% 5.39%

Lipper Mixed-Asset Target 2010 Funds Average 0.50% 5.77%

MYRETIREMENT 2010 FUND 09/04/2009 0.31% 0.39% 5.79%

Lipper Mixed-Asset Target 2010 Funds Average 0.50% 5.77%

MYRETIREMENT 2015 FUND 09/04/2009 0.31% 0.47% 6.45%

Lipper Mixed-Asset Target 2015 Funds Average 0.58% 6.35%

MYRETIREMENT 2020 FUND 09/04/2009 0.31% 0.70% 7.19%

Lipper Mixed-Asset Target 2020 Funds Average 0.70% 7.29%

MYRETIREMENT 2025 FUND 09/04/2009 0.31% 0.85% 7.91%

Lipper Mixed-Asset Target 2025 Funds Average 0.96% 8.71%

MYRETIREMENT 2030 FUND 09/04/2009 0.32% 0.99% 8.72%

Lipper Mixed-Asset Target 2030 Funds Average 1.07% 9.34%

MYRETIREMENT 2035 FUND 09/04/2009 0.32% 1.14% 9.55%

Lipper Mixed-Asset Target 2030+ Funds Average 1.29% 10.38%

* MYRETIREMENT 2040 FUND 09/04/2009 0.31% 1.29% 10.25%

Lipper Mixed-Asset Target 2040 Funds Average 1.29% 10.57%

MYRETIREMENT 2045 FUND 09/04/2009 0.31% 1.36% 10.59%

Lipper Mixed-Asset Target 2045 Funds Average 1.40% 11.39%

MYRETIREMENT 2050 FUND 09/04/2009 0.31% 1.29% 10.72%

Lipper Mixed-Asset Target 2050+ Funds Average 1.42% 11.16%

MYRETIREMENT 2055 FUND 09/04/2009 0.32% 1.29% 10.73%

Lipper Mixed-Asset Target 2050+ Funds Average 1.42% 11.16%

5 Answers

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  • John W
    Lv 7
    8 years ago
    Favorite Answer

    You're comparing managed funds with a pure equity. With managed funds, the main premise is portfolio construction to control risk and to benefit from a market downturn as well as a market improvement.

    The effect of portfolio balance is essentially the adage of buy low, sell high. Ben Graham advocates a 45% equity, 55% bond portfolio and recommends never going below 25% and never above 80% equity. Markowitz says that a 25% equity portfolio is the safest, safer than a 100% bond portfolio, that 50/50 is the same risk as 100% bond portfolio and that with increasing risk, the incremental gains are less ad less. Claude Shannon at MIT demonstrated that a 50/50 mix between a share represented by a random walk ( Brownian motion ) and cash is the ideal. The usual guidance is to go from aggressive such as 80% or higher equity when you start to conservative 25% equity when you retire and this is what the targeted funds with a target date work. The premise of the varying levels of risk is that if you are continuing to invest a set sum from your paycheck each month, that contribution to your portfolio is as if you are holding a bond, the value of this "bond" can even be calculated with an appropriate market rate, perhaps the historical return of your portfolio or the bond yields of your company as you can't really sell your job and the security of your job is only as good as that of your company. This means that if you have a lot of years of continuing contributions from your salary, you can invest more heavily in stocks.

    To envision rebalancing, imagine a 50/50 portfolio of $1,000 between a stock symbolized by a random walk and cash. That would start as $500 / $500, if the stock should drop in half, you would have $250 / $500 so you would buy $125 of stock to rebalance to $375 / $375, should the stock return to it's original price, you would have $750 / $375 for a portfolio of $1,125 while the stock has essentially stayed the say. Had the stock doubled and then halved, you would also have a portfolio of $1,125.

    Bonds are contractual agreements to give you a return, unless the company defaults on the bonds, you will receive the returns specified. There is an interest rate risk as a bond can only be sold if it is competitive with other bond of similar risk therefore if newer bond are available at a higher risk, the seller must discount the bond price so that the yield is the same.

    An investment in Walmart will benefit you by the profits distributed as dividends or by the growth of the business for the profits that are re-invested instead of distributed.

    Note that when you have multiple annual rates, your average rate over those years is given by the geometric mean. For example, the returns of 0.04%, 3.12% and 12.88% gives you an average of 5.20% not the 5.35% most people would think.

  • Anonymous
    8 years ago

    Just because WMT has underperformed some of the other investments does not mean that it will not over the long term outperform many of them. During the past 12 months it has returned 14% which is pretty darn good. YTD is is pretty flat though. Indeed some of the small cap funds over the long term will probably outperform many of the other selections. They have done so in the past through history. I suspect that bond funds which have done really really well during the past 10 years will not do well for the next 10-15 years. Their time has come and gone. These things sort of work in cycles. Back in 1980 bonds were the place to be--18% annual return back then but a few years later stocks were the place to be.

    In general target date retirement funds are sort of blah, but they are a no brainer. Just put your money in and hope for the best.

  • 3 years ago

    Walmart 2040

  • JoeyV
    Lv 7
    8 years ago

    Because Walmart stock hasn't gone up in value in 10 or 12 years. It's a mature company with limited growth prospects, especially in a stagnant economy.

    Edit: Want to compare education Linda? Got a Ph.D. and a CFA and I will bet you on any answer I give. I will also bet big that you have neither a Ph.D. or a CFA. I have also been a professor at several "most competitive" colleges and universities, run a hedge fund, been employed at several others, written a bunch of academic papers on this stuff, etc.. What do you think Linda? Is your opinion thyat I am wrong worth dick?

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  • Anonymous
    8 years ago

    because walmart has a high appreciation cap.***As usual Joey - you are WRONG*** please stop commenting until you get some education first.

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