Rebalancing your 401(k) stock portfolio

For investors who own stock mutual funds in 401(k) retirement plans or similar programs, this is a good time for a thorough review of your holdings -- and of the other investment options available in the plan.

Some issues to consider:

* How is your savings allocated among large-capitalization, mid-cap and small-cap funds? If you aren’t sure what kind of stocks your funds own, that information should be readily available from the plan or from the individual fund companies’ websites. It’s worth a look.

You also can use the Morningstar fund tables in today’s Business section to see how your funds are categorized.

* Do you have a mix of “growth”-oriented funds and “value”-oriented funds? Some investors have heavily favored value-style funds since 2000. But many market professionals are advising clients to shift at least some money toward growth-style funds.

* If you’ve owned a foreign-stock fund in your retirement plan for many years, that holding may have grown substantially because of the boom in overseas markets this decade. Make sure you’re comfortable with the percentage you now have in foreign stocks.

* Strive for a well-diversified portfolio. It’s the best protection against severe losses in any single market sector. Think about some of the plan’s investment options you haven’t used, and whether it would make sense to add them to your mix.

--

Tom Petruno