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Simplify next year
Old 12-20-2006, 12:43 PM   #1
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Simplify next year


Havenít started a post in some time but I wanted to let everyone know what I was doing. 44 YO and 7 years from FI. Lately I have considered changing my basic slice and dice index retirement portfolio with value, small cap, and REIT tilts into a simplified 50% TSM / 30 % Total bond / 20% Total International when I rebalance in January.

Its not that this slice and dice portfolio has performed poorly, its that I just donít need the hassle of balancing the 9 funds among taxable, rollover IRA, Roth IRA and 401K. Every year it creates a new problem of what goes where and as additional funds are added in disproportionate amounts to the different tax structured retirement investments my asset allocation is out of balance more then in balance. I would never dissuade anyone to not value or small cap tilt but Iím just not sure, with all the other complications, if itís really worth it in the long run.

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Re: Simplify next year
Old 12-20-2006, 12:47 PM   #2
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Re: Simplify next year

I get torn between the basic 3 or 4 fund approach versus more of a 10 fund diversification. Not sure where I'll end up. Within reasonable limits the end result is likely not all that different.

But I do like the idea of cherry picking during rebalancing. I'm all in tax-deferred money, so tax management isn't an issue.
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ESR'd March 2010. FIRE'd January 2011.

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Re: Simplify next year
Old 12-20-2006, 03:02 PM   #3
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Re: Simplify next year

Hey elroy,

simplified 50% TSM / 30 % Total bond / 20% Total International when I re balance in January.
There is a lot to be said for simplicity. It can resolve a lot of problems, but can seldom create them. Heck, if you don't like it after a few years, go back to S/D.
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Re: Simplify next year
Old 12-20-2006, 03:51 PM   #4
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Re: Simplify next year

if i had it to do all over again ... i'd go for simple! handling multiple funds in multiple classes has lost some of its appeal (though still providing good returns), but reluctance to take capital gains prevents me from switching to a simpler portfolio.
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Re: Simplify next year
Old 12-20-2006, 04:41 PM   #5
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Re: Simplify next year

Hmmm - I keep trying - Target Retirement 2015 at age 63.

I held Lifestrategy moderate for about ten yrs with small cap index and REIT Index creeping inaround 1998.

Heh heh heh - unfortunately still have around 15% in individual stocks, where a 100% loss would not derail my ER (going on 14 yrs) - it's incurable, just gotta putz. 33 stocks - perhaps I can reduce the number next year - or not.
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Re: Simplify next year
Old 01-04-2007, 09:24 AM   #6
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Re: Simplify next year

Just wanted to update. After all my complaining about the difficulties involved I decided that rebalancing my slice and dice retirement account to its original allocation could be accomplished by just four transactions totaling only 3% of my portfolio balance and including a lump sum 2007 Roth contribution. Not a very significant problem. All told, the rebalance consisted of selling some international and REIT and purchasing some small cap in my rollover IRA and ST bonds in my Roth.
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