Posted byon March 29, 2010
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It’s that time of year again! Time when I look at our asset allocation and convince myself to take on more international exposure in our portfolio. After making the update, here’s what our target asset allocation looks like.
Update: Here is my most recent asset allocation update.
When we started using a total market approach for our portfolio I began with a 20% international (18% of the total portfolio) allocation, with plans to increase it each year.
As of our last asset allocation, I had 30% (or 27% of the total portfolio) international allocation.
Now I’ve moved it up to 35% (31% of the total portfolio). This may or may not be the final move; next year I may move it to 40%.
Here’s how our portfolio currently looks.
In addition to the overall asset allocation, I also like to keep the EAFE at 85% and emerging markets at 15% of the total international holding.
Rebalancing our portfolio is always fun. Since our portfolio is split over 10 different retirement accounts (which I cannot combine), in addition to the asset allocation, I try to keep it (relatively) simplified and with the lowest expense ratio possible.
I came up with a plan to shift some of the bond holdings into the EAFE fund in Scott’s 457 plan. That should account for the majority of the change.
There’s still a slight need for some additional emerging markets. I hate to buy more of the Vanguard emerging market fund, since the expense ratio is .40% with purchase and redemption fees.
I recently compared the emerging market ETF shares to the index fund, and the ETF came out on top, so I’m planning to head that route.
However, since it’s a small holding in a small account, I don’t want to pay much for the trades, so I’m going to take a look at some of my other brokerage accounts to make the move.
See our most current Asset Allocation Update.