So I have 3 investment accounts:
Vanguard (taxable)
Vanguard (IRA)
401K
For my 401K contributions, I went with the lowest expense ratio funds available (0.5-0.75% ugh) and they are all US Stocks. This has the unintended effect of pushing my AA towards stocks and away from any bonds (my desired AA is 90/10). Now that I'm ready to rebalance, my only straight forward way of rebalancing through contribution is by adding to my taxable account, which isn't the ideal place for bonds. Checking out my 401K options, and the Target Date funds have an expense ratio of 1.26%. There's a bond fund, but it's class A (meaning there's load) so the load is 4.5 and the expenses are 0.85%.
So my options are
1) Purchase Vanguard bond funds in my taxable account; pay taxes on dividends
2) Purchase overpriced bond funds in my 401K account; pay up-front load and relatively high expense ratio
3) Sell some stocks in my IRA account to buy bonds in my IRA account
Right now, #3 actually seems like my best option. (My new contributions would then go towards Vanguard International Stocks and/or US Stocks as needed.)
Any corrections or words of advice?