Managing finances effectively is an important part of a man’s responsibilities. If you can not support yourself and those in your care you are not living up to your potential.
The funds I need for short/mid term are mostly in liquid accounts right now earning practically nothing in interest. That’s ok because that is my emergency stash and the money is where it belongs based on my possible time horizon.
My 401k is where my current investment philosophy is best reflected. I like to manage my own future so do not follow the boiler plate recommended guidance. I tend to time things when I feel a broad move is in order but I typically wouldn’t do it with more than 50% of my portfolio since I am a long term bull and not hoarding gold and guns.
401k September 2011 % Breakdown
45% – Liquid Money Market Option
It has been earning nearly 4.5% per year but no I am not typically this conservative. I moved from fully invested near Dow 12,300 thinking it looked a bit overheated. It was up for a bit when I did this but overall the move has been a good one.
20% – S&P 500 Index
The actively managed SP 500 mirror under performs the index due to the higher fees so I decided to stick with the index and overall I am bullish long term (next 25-30 yrs) for S&P 500.
15% – Actively managed international fund
I do not believe international gives as much diversification as originally thought by others since markets seem to move together these days. If I want true diversification at some point I will consider a commodity index fund.
10% – REIT fund
I started buying into the REIT fund due to the nice yields and so far they have performed very well for me.
5% each for mid cap/small cap index fund
Mid cap and small cap indexes were a bigger part of my portfolio before I moved more into cash and mid cap performed very well for me over the last year.
How are you managing your 401k asset mix?