I have been noticing that my "Investable Cash" in Personal Capital was getting rather high, and I couldn't figure out why. It didn't tie to the amount of cash I thought I had available in my bank accounts. I then realized that MY TRADITIONAL IRA HAS BEEN SITTING IN CASH ever since I opened it last year! Dang it. I did not mean to be sitting on the sidelines this whole time with that money.
Although, I guess let's be real, it's not a huge deal in the grand scheme of things. And now I have an opportuntiy to reevaluate and learn a few things.
I've been eyeing Small Cap equities as an asset class I may want to start giving more weight to in my asset allocation. I'm thinking about just sinking the $7.5k I have here in the tIRA into one of Vanguards Small Cap Index Funds or ETFs
VISVX -
https://personal.vanguard.com/us/funds/snapshot?FundId=0860&FundIntExt=INT VSIAX -
https://personal.vanguard.com/us/funds/snapshot?FundId=5860&FundIntExt=INTVBR -
https://personal.vanguard.com/us/funds/snapshot?FundId=0937&FundIntExt=INTHere's the rest of my full picture for a brief case study type thing:
I'm 27 Years old, pretty stable job in Finance, no house, no gf/wife, no kids, 2002 Nissan truck, a bike and a kayak are my main means of transportation :)
Asset allocation (see attachment)
Goal: be well diversified, but aggressive. I'm young. I should probably be more aggressive than I am honestly. A 90% Equities/10% bonds portfolio probably fits my risk profile for this time of my life, and I try to stay around that, but I don't try very hard (as you can see by me neglecting looking at an account for a whole year and realizing it wasn't doing what I thought it was). I haven't endured a long or severe downturn. I'm about to get some stock from my company at a 15% discount, and I'm thinking of sitting on it to see how well we do over the next few years. Although, our stock price has been on the downturn for a while and the smart investor in me wants to sell right away and take my 15% profit.
Holdings: I currently own pretty much only big index fund type stuff. VTSAX / S&P 500 / and a Target Retirement 2055. I own zero single stocks. I am about to get the ones I mentioned above.
Here's the questions:
1) do you see any issue with me making that move to start allocating more to Small Cap equities with this Traditional IRA money? It would be taking that 5.76% of my portfolio (about $7.5k) and putting it in Small Caps (Value or growth..haven't decided on that yet). Is it going to bite me someday or end up being awkward in terms of re-balancing/earning income in the 'wrong' type of account for tax purposes/etc.?
2) Do you see any other issues based on my asset allocation that I should look more into (understandably you don't have all the details but throw a few ideas my way if something is sticking out)
Thanks