Vanguard is concerned about my asset allocation

[Zoot Allures]

Got an interesting email from Vanguard this morning. I'm 46 and 100% in equities, though a portion of my retirement account is tied up in a loan I took out to buy my house, so I consider the 4.25% interest I'm paying (to myself) to represent the "fixed" portion of my portfolio for the time being. I don't plan to touch my retirement savings for at least 15 years. I assume this email from Vanguard is simply auto-generated based on my age and AA, but I wonder about the timing, as I don't recall getting a message like this before.

Are you missing the mark?

You could be taking on too much risk in your [COMPANY NAME] retirement savings plan account because you may be too heavily invested in stocks for someone your age.

As a result, fluctuations in the stock markets may cause the value of your account to decrease, which could cause you to miss the mark on your retirement goals.

Help is available
Your retirement savings plan offers a range of tools and services that can help you find the right investment mix.

[dougules]

Got an interesting email from Vanguard this morning. I'm 46 and 100% in equities, though a portion of my retirement account is tied up in a loan I took out to buy my house, so I consider the 4.25% interest I'm paying (to myself) to represent the "fixed" portion of my portfolio for the time being. I don't plan to touch my retirement savings for at least 15 years. I assume this email from Vanguard is simply auto-generated based on my age and AA, but I wonder about the timing, as I don't recall getting a message like this before.

Are you missing the mark?

You could be taking on too much risk in your [COMPANY NAME] retirement savings plan account because you may be too heavily invested in stocks for someone your age.

As a result, fluctuations in the stock markets may cause the value of your account to decrease, which could cause you to miss the mark on your retirement goals.

Help is available
Your retirement savings plan offers a range of tools and services that can help you find the right investment mix.

Sounds automated.  It may be good for somebody that doesn't know what they're doing to get the message. 

[Zoot Allures]

Sounds automated.  It may be good for somebody that doesn't know what they're doing to get the message.

True. Mainly I'm wondering if the timing of these communications is influenced by current market conditions in any way. I think probably not, but it's interesting to ponder.

[dougules]

Did you hit a birthday or an anniversary of opening your account or something like that recently?

[VoteCthulu]

No, I think it's something new they started in the last 6 months. I got a similar letter a little while ago, but figured they were just marketing their advisor services.

[marty998]

My broker thinks I'm not diversified enough because I have 90% in a single stock - an ASX300 equity index fund...

[PizzaSteve]

Covers a few bases for them:
* Serves as a you've been warned, assuming their legal council is worried about the risk of a future class action suit from dissapointed retirees, right after a market drop
* Might be trying to influence investors to use target date type funds, which have slightly higher fee recovery and more stable inflows/outflows that help them manage money efficiently
* Generally good advice to make sure customers are using right products

[Zoot Allures]

Covers a few bases for them:
* Serves as a you've been warned, assuming their legal council is worried about the risk of a future class action suit from dissapointed retirees, right after a market drop
* Might be trying to influence investors to use target date type funds, which have slightly higher fee recovery and more stable inflows/outflows that help them manage money efficiently
* Generally good advice to make sure customers are using right products

Nice summary! Thank you.

[MustacheAndaHalf]

You might take a look at "Portfolio Watch" in the menu of account options at Vanguard.  It walks through your assets at Vanguard in many different ways.  For example, it will tell you if you favor small cap, or if your (non-existent) bond allocation is too short term or differs from the market.

The closer you get to your retirement goal, the more valuable it becomes to keep your money rather than risk it.  I'd suggest you at least allocate 10% to bonds - just because it's a better habit, and unlikely to have much impact on your portfolio.  As you get older it will help you to already have bonds and already have the habit of selling stocks to buy bonds (when stocks do better).