2015 Investment Action Plan
PF blogger confession: For the past 2 years or so, I’ve not spend any time on my investment portfolio.
I’ve been doing the basics, which I think is the most important: saving as much as possible in an automatically rebalancing asset allocation / target date funds.
So, now is the time to revisit this and optimize. Here’s my plan.
- Find out what our current investments actually look like.
- Re-evaluate our ideal asset allocation.
- Move out of target date funds and create our own where it makes sense.
- Move my old 401k.
It looks like the best option is to put this in my new 401k since the investment options are good.Investment options are being changed to eliminate some extremely low expense ratio funds (.02 – .07). My best option will be target date funds with .15% expense ratios. This is enough to push me to rollover to vanguard instead.
Step 2 is the hardest, but I’m not going to overthink it. Based on a brief bogleheads review, a 70/30 stock bond split, and following vanguards 4 fund allocations, I’m targeting something like this:
- Total U.S. stock market index fund – 49%
- Total international stock index fund – 28%
- Total U.S. bond index fund – 21%
- Total international bond index fund – 9%
If anyone smart has any reason I need to keep digging and researching to find a better allocation, I’m open to suggestions.
The largest portion of our money is in my LA employer’s 401k. This has been auto-rebalancing on an asset allocation that I set a while ago, and all funds have low fees. I was getting charged $6/year to keep it there in 2014, but now it looks like that fee went away. I don’t see a reason to roll this over, so I adjusted the rebalance allocation to include more bonds to reflect a less risky portfolio going forward.
My most recent employer’s 401k has one year’s worth of contributions, all in a target date fund with a relatively high expense ratio (.7%). The fund options weren’t very compelling, so I was stuck with that while I was employed. Now I need to move it into a roll-over IRA. This is also less intimidating than moving my other 401k. This one is a relatively small percentage of my portfolio. Once the rollover is complete, I’ll rebalance my rollover IRA to try to hit my final allocation target.