blackdiamond
Initiate Member
Joined: Jan 17, 2011 3:34:08 GMT -5
Posts: 85
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Post by blackdiamond on May 30, 2011 8:08:56 GMT -5
I am currently on an assignment that may last 2 more years and while on this assignment I can not contribute to the 401k .
I was looking at re-balancing my retirement portfolio and wanted to know if I should sell the TR2025 fund I have in the 401K and use it to buy the bond fund that is offered. The ER is .22
or
Should I leave my portfolio alone since this is a short duration assignment and I can use future monies to re-balance.
I current use a brokerage account as my retirement vehicle along with my Roth IRA.
I have total stock market index fund in the taxable account and have my international allocation in my Roth.
My current allocation is: 71% stock US stock 14% international stock 7% bond 7% cash
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Post by Savoir Faire-Demogague in NJ on May 30, 2011 9:34:01 GMT -5
You do not mention your age, but based on the target date fund dated 2025, I will make the presumption you are 50 or so.
Each of your "buckets" of assets(ie: taxable, roth, 401k, etc), should be allocated based on the time horizon. Every fee only, independent, credible financial advisor will make the same/similar recommendation.
I would stay away from any sort of bond fund comprised of bonds of average maturity of 4-5 years or longer. The allocation you mention at the end of your post looks suitable.
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blackdiamond
Initiate Member
Joined: Jan 17, 2011 3:34:08 GMT -5
Posts: 85
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Post by blackdiamond on May 30, 2011 10:16:01 GMT -5
SF: I am 32. I am using the TR2025 because it has the asset allocation I am looking for. I did not want to purchase these in my taxable account so I stock with TSM index fund instead.
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Post by commentator on May 30, 2011 10:58:39 GMT -5
How often do you think your retirement account needs to be "re-balanced"? Your current allocation looks fine to me (although I, personally, would put about 0% in international stocks) so why do you feel the need to do anything?
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Post by Savoir Faire-Demogague in NJ on May 30, 2011 11:25:30 GMT -5
Most of the S&P 500 companies get nearly 50% of their revenue from international sources. So, theoretically, holding any of, let's say the top 100 in this index you will have international exposure. Sometimes, many people are "solutions" looking for a "problem". To the OP, I agree with Commentator.
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Post by Savoir Faire-Demogague in NJ on May 30, 2011 11:28:18 GMT -5
SF: I am 32. I am using the TR2025 because it has the asset allocation I am looking for. I did not want to purchase these in my taxable account so I stock with TSM index fund instead.
The only problem with your strategy is when you are 47 you will be too heavy in fixed income. At 47 you still need at least 20 years heavily in equities. I am 56, and roughly 70-75% in equities.
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