Q:

Employer 401K thru Fidelity - Investment options

I originally picked FA FREEDOM 2040 I (FIFFX) for investment. After talking with a co-worker I learned this is a poor choice and only has 3 stars. The 10 YR performance 6.37%. Anyway, I have altered my elections and picked below (Effective 12/15/2013). Let me know what you think? Should I left it alone with FA Freedom 2040 I?
Current Investment Elections
Asset Class     Subclass    Fund Name   Current % 
Stock Investments   LARGE CAP   FA LARGE CAP I FALIX    10%
Stock Investments   LARGE CAP   FA NEW INSIGHTS I FINSX     15%
Stock Investments   LARGE CAP   INVS EQL WT S&P500 Y VADDX  20%
Stock Investments   LARGE CAP   INVS GRTH & INC Y ACGMX     10%
Stock Investments   LARGE CAP   SPTN 500 INDEX ADV FUSVX    15%
Stock Investments   MID-CAP     IVY MID CAP GROWTH I  IYMIX     10%
Stock Investments   SMALL CAP   FA SMALL CAP I  FSCIX  FSCIX    10%
Stock Investments   INTERNATIONAL   ALZGI NFJ INTL VL IS ANJIX  5%
Stock Investments   INTERNATIONAL   OPPHMR INTL GRTH Y  OIGYX   5%
Total: 100%

A:

The best predictor of mutual fund performance is low expense ratio, as reported by Morningstar despite the fact that it produces the star ratings you cite. Most of the funds you list are actively managed and thus have high expense ratios. Even if you believe there are mutual fund managers out there that can pick investments intelligently enough to offset the costs versus a passive index fund, do you trust that you will be able to select such a manager? Most people that aren't trying to sell you something will advise that your best bet is to stick with low-cost, passive index funds.
I only see one of these in your options, which is FUSVX (Fidelity Spartan 500 Index Fund Fidelity Advantage Class) with an exceptionally low expense ratio of 0.05%. Do you have other investment accounts with more choices, like an IRA? If so you might consider putting a major chunk of your 401(k) money into FUSVX, and use your IRA to balance your overall porfolio with small- and medium-cap domestic stock, international stock, and bond funds.
As an aside, I remember seeing a funny comment on this site once that is applicable here, something along the lines of "don't take investment advice from coworkers unless they're Warren Buffett or Bill Gross".

A:

The target date investment will automatically reduce equity exposure and increase bond exposure as it approaches retirement date.  If you are unlikely to make adjustments as you get older, you may be setting yourself up for more risk down the road.  Only you can decide what level of risk you can tolerate as you chase higher gains.

