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Asset Allocation Changes

August 15th, 2011 at 07:38 pm

I decided to make a minor adjustment in my asset allocation plan. While using Morningstar portfolio tools, I was noticing that my target retirement funds are holding more foreign stock and less small cap stocks. Therefore, I decided I would compensate a bit for this by adjusting the holdings in my traditional IRA. My traditional IRA is the only place I don't use target retirement funds.

This is my new asset allocation:

35% Total Stock Market
10% Small Cap Value

25% International

20% Total Bond Market
10% Tips

I like the idea of more small value anyway. It holds a lot of reits, so it is a way to get more reits into my mix without buying them directly. Small value is a good diversifier to a total market fund, behaves similarly to reits, but a small value fund holds reits as well as other sectors, so is less concentrated. I like that. Smile

4 Responses to “Asset Allocation Changes”

  1. PatientSaver Says:

    Also, in an economy like this, it'll be small companies that pull us out of the recession.

  2. starfishy Says:

    what is a reit?

  3. Petunia 100 Says:

    Reits are real estate investment trusts. Most are privately owned, but some of the larger ones are public so you can buy their stock. It is a way to own a little commercial real estate without actually buying any. For the small investor (like me), it is the only way.

  4. starfishy Says:

    thanks for the explanation!

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