Keeping in mind that every individual must tailor an asset allocation plan to his or her own specific circumstances, I nevertheless felt that readers might be interested, and to some degree, entitled to have me reveal my asset allocation plan.
My portfolio is divided 50% equity/50% fixed income. Wherever possible, my asset classes are either indexed, tax-managed, or defined asset class funds. Without further ado, my current Asset Allocation Plan includes the following asset classes:
My portfolio is divided 50% equity/50% fixed income. Wherever possible, my asset classes are either indexed, tax-managed, or defined asset class funds. Without further ado, my current Asset Allocation Plan includes the following asset classes:
| Asset Class | Portfolio Allocation |
| US Market | 8% |
| US Value | 6% |
| US Small | 5% |
| US Small Value | 6% |
| US Realty | 6% |
| International EAFE | 6% |
| International Value | 3% |
| International Small | 3% |
| Emerging Markets | 3% |
| Gold | 4% |
| Real Bonds | 30% |
| Short Bonds | 20% |
My Asset Location consists of the following account structures:
| Account | Portfolio Allocation |
| Taxable Account | 33% |
| Roth IRA | 25% |
| Traditional IRA | 25% |
| SIMPLE IRA | 2% |
| Variable Annuity | 15% |
My annual invesment contribution flows into each asset location as follows:
| Account | Portfolio Allocation |
| Taxable Account | 21% |
| Roth IRA | 36% |
| Traditional IRA | 43% |
| SIMPLE IRA | 0% |
| Variable Annuity | 0% |
Each year I execute a trustee to trustee transfer of SIMPLE IRA asset balances to my Traditional IRA. (This is why my annual investment contribution to the SIMPLE IRA is entered as 0%; the contribution is registered in the Traditional IRA.)
The taxable account consists of my Total Market allocation, as well as tax-managed allocations in Small Cap and International EAFE allocations. I also hold Emerging Market and Gold allocations in this account. Fixed allocations consist of real bonds (I bonds) and a limited term tax exempt fund. For this account, I redirect all dividend and capital gains distributions to my cash reserves (a treasury money fund). Redirection of dividends allows me to more effectively rebalance asset classes in a tax-efficient manner, as well as simplifying tax accounting.
The Roth IRA contains my allocations to Value, Small Value, International Value, and International Small allocations. For rebalancing purposes I also hold a small allocation to an inflation-indexed bond fund in this account.
The Traditional IRA is allocated to inflation-indexed bonds. The SIMPLE IRA plan fiduciary is a high cost, scandal plagued load fund group, so I hold my plan accumulations in the fund group's no-load money fund awaiting my annual transfers to my IRA.
The no-load, low-cost, no surrender fee Variable Annuity Account is allocated among equity REITS and short term investment grade bonds.
The taxable account consists of my Total Market allocation, as well as tax-managed allocations in Small Cap and International EAFE allocations. I also hold Emerging Market and Gold allocations in this account. Fixed allocations consist of real bonds (I bonds) and a limited term tax exempt fund. For this account, I redirect all dividend and capital gains distributions to my cash reserves (a treasury money fund). Redirection of dividends allows me to more effectively rebalance asset classes in a tax-efficient manner, as well as simplifying tax accounting.
The Roth IRA contains my allocations to Value, Small Value, International Value, and International Small allocations. For rebalancing purposes I also hold a small allocation to an inflation-indexed bond fund in this account.
The Traditional IRA is allocated to inflation-indexed bonds. The SIMPLE IRA plan fiduciary is a high cost, scandal plagued load fund group, so I hold my plan accumulations in the fund group's no-load money fund awaiting my annual transfers to my IRA.
The no-load, low-cost, no surrender fee Variable Annuity Account is allocated among equity REITS and short term investment grade bonds.
