During our last blizzard this weekend I spent time catching up on some paperwork and budgeting things that needed to get done. One of those items was reviewing and re-balancing my retirement portfolio. I usually try to do this once or twice a year, depending on how far out of balance my asset mix becomes. It was definitely overdue!
While reviewing everything, I decided to redo my retirement accounts that are in my 403 (b) account (similar to a 401-k but for nonprofits). Along with several other funds, I had been invested in a Target Retirement fund account, but I was not happy with the percentages of stocks, bonds, etc. So I decided to pull my monies out of that and redistribute them.
Also, my balance was out of whack between stocks and bonds and I needed to get that re-balanced (getting back to the right mix and percentage of stocks and bonds). So after reviewing funds, pulling monies, re-balancing, etc. my retirement portfolio now looks like this:
- Domestic Bonds are 20% of my portfolio
- Large Capitalization Stocks are 35% of my portfolio
- Small Capitalization Stocks are 20% of my portfolio
- International Stocks are 20% of my portfolio
- REIT (Real Estate Investment Trust) is 5% of my portfolio
The basic breakdown is 75% stocks (further broken down by small, large, and international stocks), 20% bonds, 5% real estate. For my age and my goals this seems to be a pretty good mix – we will see how it works out!
I am a buy and hold, index type of investor. I am still in index funds, I just changed some of the funds to better reflect my personal goals and needs. I invest a fixed amount monthly (with a company match) regardless of whether the market is up or down. This strategy (continuous automatic investing) in my opinion gives me the best opportunity for good returns.
I will now let things go for awhile, probably checking closely every three months to see how things are going. I tend to not re-balance my portfolio unless it gets close to 3-4% over or under my target percentages. Again, unless something really wild happens, I tend to only re-balance once or twice a year.
Have you recently (or ever?) re-balanced your accounts? This might be a good time to take a look and make sure you asset mix is in line with your investing goals.
