Yayyy it’s that time of year again! Time for the annual re-balance the 401K funds! Please, everyone try to contain your excitement!
Normally I just do this on my own, (and I’ve been drinking) but after the disastrous results from the last couple of years I seek Pigg wisdom.
Exhibit A: The current allocation.
Fixed Income 15.28%
Large Cap Equity 34.51%
Mid Cap Equity 16.86%
Small Cap Equity 17.55%
Money Market 1.62%
International Equity 14.18%
Exhibit B: Male, 51, prime time layoff candidate. :-/
Normally I suppose I should be following the 110 – your age = % of equity investments. Since I’m currently at 83.1% I’m violating the hell out of that theory. Even if I cheat and go to the newer 120 – age = % of equities I’m still blowing the curve.
So do I reduce the amount of Large, Mid, Small and International Equity funds and start moving $ towards the safer Fixed/Money Markets? Or do I just start with a slow move in that direction by re-adjusting future contributions to more closely mirror the desired results? Go ahead and re-balance at least some % of the funds to head in that direction? Which ones would you trim back?
These are the usual large corporate offerings. A few SSgA funds, (mostly index) a few Vanguard, one or two T.Rowe/Royce/Templeton/American. I won’t bore you with the entire list or my specific choices.
I’m leaning towards less large caps, holding the course on the mid and small caps (my best holdings!) and just treading water on the international stuff. Probably start pushing more contributions towards the bond/stable value bits.
Money market is kind of a break even thing, just trying to keep a tiny bit in that, you know, enough to bury me, have a party and smoke some expensive cigars if necessary. 😉
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