Author Topic: Retirement account holdings / portfolio rebalancing?  (Read 2998 times)

kaeldra

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Retirement account holdings / portfolio rebalancing?
« on: May 31, 2012, 12:40:41 PM »
I'm confused about what to buy within my retirement accounts, and am worried that too great a portion of my portfolio is in bonds as I'm 27. Iím hoping you all can send me to a helpful article/book on what type of funds to hold in retirement accounts and offer your thoughts / advice on rebalancing.

I have a Roth IRA, and currently (per advice from a fee-only financial adviser 2 years ago when I didn't know about FI) hold BND. I also recently became eligible for my company's retirement plan, a SEP-IRA, and now have 1K in the account but am not sure what to buy within it. Outside of my retirement accounts I have an investment account with index funds.

Here are my overall holdings at current value:
ROTH IRA
BND - 13,500
Cash - 650

SEP IRA
Cash - 1,100

INVESTMENT
BND - 16,300
VBR - 24,900
VEU - 19,500
VTI - 21,200
NAESX - 4,200
VFINX - 6,000
NALFX - 5,000

TOTAL
112,350
(which makes my holdings of BND about 26% of my portfolio :/ )

Within my investment account, I rotate which funds I purchase each time I add money to the account, and have stopped including BND in the rotation, but am wondering if I should sell some BND to invest in my other funds or even an additional index fund.

gooki

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Re: Retirement account holdings / portfolio rebalancing?
« Reply #1 on: May 31, 2012, 02:56:35 PM »
80% shares 20% bonds is perfectly acceptable for someone your age.

"I rotate which funds I purchase each time I add money to the account, and have stopped including BND in the rotation."

I'd keep doing this until bonds represent 20% of your portfolio.

KittyWrestler

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Re: Retirement account holdings / portfolio rebalancing?
« Reply #2 on: May 31, 2012, 03:00:49 PM »
I agree 80% equity and 20% fix income is probably right for your age.

increase your holding in VTI.

kaeldra

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Re: Retirement account holdings / portfolio rebalancing?
« Reply #3 on: May 31, 2012, 03:36:12 PM »
Thanks! (And glad you both agree ;) )

Any thoughts on what's best to hold within retirement accounts?

KittyWrestler

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Re: Retirement account holdings / portfolio rebalancing?
« Reply #4 on: May 31, 2012, 03:42:31 PM »
Thanks! (And glad you both agree ;) )

Any thoughts on what's best to hold within retirement accounts?

The "masters" have always advised everybody to keep it simple.. See how many actively managed fund actually beat the index throughout the years? not very many..

So keep 20% in a mix of inter or long bond funds. If you want, throw in some junk bond, it's earning pretty good yield now
For the rest of 80%
60% in VTI since it covers small, mid and large
20% VEU

It's simple, well balanced..

But I don't even follow the "simple" advise.. I play a bit of "individual stock picking".. it's risky but playing it is quite fun..

Lars

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Re: Retirement account holdings / portfolio rebalancing?
« Reply #5 on: June 02, 2012, 02:03:54 PM »
Thanks! (And glad you both agree ;) )

Any thoughts on what's best to hold within retirement accounts?

The Boglehead wiki has a nice article on what type of funds to hold in retirement accounts vs taxable accounts. See http://www.bogleheads.org/wiki/Principles_of_Tax-Efficient_Fund_Placement . The short version is that you'll probably want BND or similar in the IRA although if you have high fees on your fund options in the IRA that might push you toward another types of funds. 

kaeldra

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Re: Retirement account holdings / portfolio rebalancing?
« Reply #6 on: June 03, 2012, 07:03:16 PM »
Thanks Lars - that article's just what I was looking for :)