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Market Milestone

Yesterday, the Dow Jones Industrial Average went above 13,000 for the first time. It only took 126 days to get there from 12,000. That's the third fastest 1,000 point gain. While this is certainly happy news for investors, this article is suggesting that at least one third of a portfolio should be invested in international stocks or international mutual funds because foreign markets are performing better than the U.S. markets right now.

When I set up my 401k, I used the guidelines suggested by The Armchair Millionaire. I bought the book a few years back and have referred to it regularly since then. I have my 401k split up with approximately 1/3 in a U.S. small cap mutual fund, 1/3 in a U.S. large cap mutual fund and 1/3 in an international large cap mutual fund. I would never have considered an international fund on my own. But the book made sense saying that it provides balance to have an international fund in the mix in the event that the U.S. markets are struggling. My international has consistently performed better than my U.S. ones. I may be moving things around to put a little bit more into my international fund but I'll do some additional research first.

I didn't get serious about saving for retirement until I was in my late thirties. Better late than never. I started small so I could at least take advantage of my employer's match. As I got raises, I added to the percentage taken out for my 401k so I didn't notice the change to my take home pay. Thankfully, I've got a while to go until I reach seventy so I'll just keep on saving as much as I can.


Dow Milestones
Dow Milestones

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( 4 comments — Leave a comment )
sofvckinghot
Apr. 26th, 2007 02:47 pm (UTC)
:)
I'm gonna be 37 in October and I will START my first 401K next month.

I am putting 20% in international funds, 10% in a domestic real estate fund and 70% in a targeted retirement fund.

As long as the US dollar is underperforming compared to foreign currencies, world markets are a very, very good investment. :)
silverdee
Apr. 26th, 2007 05:20 pm (UTC)
Re: :)
It's a nice feeling to see the $ amount going up. I try not to look at the amount too often. But when big things happen with the market I check it and track the impact on my 401k.
yellowdoggrl
Apr. 26th, 2007 06:21 pm (UTC)
I just signed up for mine here at the new job at the beginning of April, and when I consulted with The Beau (as I do on all things financial, his being such a corporate whiz and my being such an English major), he said "Fifteen percent."

Of my SALARY??? I gasped.

"Yes."

Because we just have that one salary right this minute, and because of the shock to my little "but 7 percent is a lot too, how about 7 percent?" system, we're starting at 10 percent and when he gets his job we'll increase mine.
silverdee
Apr. 26th, 2007 07:21 pm (UTC)
I would've been shocked about 15% myself. Whew! I just adjusted mine to 10% to coincide with my annual pay increase. Juannie has his that he contributes to and is participating in the stock purchase plan which I don't have with my employer. All of this reminds me to get him to up his percentage, too.
( 4 comments — Leave a comment )

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