Mid Year Investment Portfolio Update

Posted by Madison on July 28, 2008

Mid year is a great time to review your portfolio and asset allocation. It’s the first task I listed in 10 Important Tasks for Your Mid Year Checkup.

Since we’ve had a few big changes in our life lately, we’ve tweaked our portfolio to account for the new lifestyle. Here’s a closer look into our investments and the performance so far in 2008.

Year To Date Return

Our portfolio has returned -7.8% year to date. While it’s in the negative and nowhere near our goal, at least it’s doing better than some of the benchmarks I use:

Asset Allocation – Total Market Approach

We still use the total market approach for our overall portfolio. Here’s what it looks like currently.

Asset Allocation

Recent Updates to Our Asset Allocation

Moving a Portion to Cash Equivalents

Our old asset allocation was a 90/10 stock/bond split. I debated whether I should include cash and bonds together for the old 10% bond portion, or if I should do a 90/10 split of what was left after the cash.

For some stability in the upcoming withdrawals, I decided to average them. The result is the a 7% bond position and an 88/12 stock/bond split.

Increasing our International Exposure

I had 20% of our stock position in international, with plans to increase it by 5% each year. Instead I decided to make one move to 30% (or 27% of the total portfolio).

New Option – Target Retirement Funds at Vanguard

Anytime you get access to new funds, it’s time to reevaluate. I had a chance to access Vanguard target retirement funds at work. I’m a huge fan of these funds and recommend them to family and friends who don’t want to keep track of their investments.

It turns out through access to institutional funds, I’m actually able to put together a lower expense ratio set of funds with all my choices I have; I’ll be skipping the target fund for now.

New Expense Ratio

I worked to optimize my expense ratios with the changes. The old expense ratio for our portfolio was 0.158%. The new asset allocation will reduce the expenses to 0.148% overall (excluding the cash portion).

Portfolio Holdings

The main investments that make up our portfolio consist of retirement accounts. They are held in 401k, Roth 401k, 403b, and 457 plans at work. We also have Roth IRAs and traditional IRAs at Vanguard, each of our pension plans, and taxable accounts holding DRIPs, cash, and CDs.

Total Stock Market Index 51%

Total International Index 27%

Small Cap Value Index 5%

REIT Index Fund 5%

Total Bond Market Index 7%

Cash 5%

The stock portion isn’t included in our overall asset allocation.

Money Writers Portfolio Updates

Check out how all The Money Writers are doing with their portfolios so far this year. I’ll link the portfolio updates here throughout the day as everyone posts them.

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Comments to Mid Year Investment Portfolio Update

  1. Why so many S&P 500 index funds? Is it because you have so many different types of accounts?

    MITBeta @ Don’t Feed The Alligators

  2. @ MITBeta: Yes, I explain it here for you: Ask Madison: Reader Mail


  3. Yikes, you must have lost nearly half of your assets through yesterday. Have you made any changes, and will you have to go back to work?


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