My Target Asset Allocation

In my July update, I shared my target asset allocation:

  • 52% US stocks, split 80/20 into 42% 500 Index and 10% Extended Market Index
  • 35% International stocks
  • 13% Fixed income

Investing is pretty new to me, so asset allocation is still something I am struggling with. In June, I finally set that asset allocation and I think I’m happy with it. (At the very least, I haven’t tried to change it in the last couple of months like I did with all of my previous ones, to just “tweak it a little bit”.)

This has taken quite a few iterations, but I like this because it’s fairly simple to implement. I picked one stock fund to use for the International stocks (Vanguard Total International Stock Index) and one fund to use for fixed income (Vanguard Retirement Savings Trust). I would have picked one fund for the US stocks portion, but my 401(k) plan doesn’t offer the Vanguard Total Stock Market Index fund, so I went with using the Vanguard 500 Index and Vanguard Extended Market Index to replicate that.

In October of last year, I actually owned some shares from almost every fund offered in my 401(k)! So I’m quite happy with my four-fund plan.

So far in the month of August (as of the 8th), my investments have seriously tanked. I have lost most of the investment return that I have gained over the last year and a half and my investments have dropped lost over 10% of their value in the last 8 days alone. Somehow, I don’t care. I believe in my asset allocation and will continue to hold. This will be a good learning experience for when I have a larger balance on my investment accounts.

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5 thoughts on “My Target Asset Allocation

    • Yup, it’s crazy! It’s kind of fun to watch and I think this is a good test to see early. Since I started investing last spring, things have mostly been going up, so this is really good to see how I react and so far, I’m doing well.

      It’s especially fun to watch my company stock go up and down with the market, whereas just weeks ago, it was going up faster than the market.

  1. I just returned back to the states and also noticed the tanking that had occurred in my portfolio. However, I am sleeping a lot better at night now. Go figure. I have restarted my IRA contributions and have put in about $1500 in the last week. I was waiting for something like this at the beginning of the year so I have to take advantage of panic sellers.

    • Welcome back! That’s interesting that you’re sleeping better at night, given that your portfolio has just tanked a bit! I’m glad to hear that you’re not panic selling either.

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