Hey everyone, it’s Finance Fridays again. Today is just a quick post about me “Cleaning Up” my Finances.
Cleaning Up?
Yea.
Usually around this time every year is when I try to look at all my finances and clean things up. Part of this is preparation for tax time, but most of it is just because I don’t really pay attention to the retirement stuff at all. I’m a true passive investor in that I don’t really look at the stock market or my index funds except for maybe once or twice a year.
So, let’s see how things went this year:
First, let’s look back at my Portfolios for 2018:
The major retirement accounts I have are:
- Thrift Savings Plan (TSP) [mine]
- Thrift Savings Plan (TSP) [hers]
- 457 (Prudential) [hers] from old job
- 403b (Vanguard) [hers] from old job
- 403b (TIAA CREF) [hers] from old job
- Fellowship 403b (TIAA CREF) [hers]
- Residency 403b (MetLife ) [mine]
“Gambling Accounts”
- Crypto Portfolio [mine, with an ok from her]
Not much has changed for 2019. Although we look back in 2018, it’s pretty much a down year for anyone in the stock market, even with index funds. I know a few people who decided to do some tax-loss harvesting this year. However, since I don’t have very much in a taxable brokerage account, it doesn’t really help me.
That said, for those of you who have significant amounts in a taxable brokerage account (not tax-advantaged) then tax-loss harvesting at the end of 2018 was probably a good idea. I have talked about Robo-Advisors before, some of which allow for automatic tax-loss harvesting.
Anything else?
Yea, I should probably rebalance my portfolios.
With the stock market downturn, my asset allocations have changed a bit.
TSP (~401k)
For our TSPs, the 80/20 portfolio my wife and I use with 50/33/17 for the stocks has changed. Also, to be honest, I forgot what my original allocation was until I looked at the contribution allocation and referred to my prior post. So I’ll rebalance back to my original intent yearly, like clockwork.
Prudential (457)
For the Prudential 457, keeping it simple means I don’t have to do much. That money will stay in Vanguard Wellington for the foreseeable future.
Vanguard
For the Vanguard 403b, the 33/33/33 split has shifted a little as well during this market downturn. However, changing the allocation on this one is pretty difficult, and I don’t think I can do it online because of how it is set up. I think for now, I’ll just leave it as is, since it’s already a pretty conservative 67/33 stock/bond split.
TIAA/CREF
For the TIAA/CREF accounts, the 80/20 split I’ve been using is still pretty similar. I don’t really like messing around with this account too much because it has like 4 different accounts in it and makes balancing it a hassle. As long as it’s “close” to my allocation I’m ok with it.
Fidelity
For my Residency 403b, it changed over from MetLife to Fidelity. I also rebalanced to my 3 fund portfolio of choice with Vanguard. Not much needs to be done here.
Roth IRA
I forgot to include this separately in the original post. However, for our Roth IRAS, I just have them in all in Vanguard Total Stock Market. Since it’s a smaller percentage of our overall retirement and some of the other accounts are more conservative, I felt it was ok to be aggressive in our only account which has tax-free earnings and withdrawals.
Crypto
For my Crypto (gambling) portfolio, I only hold two coins now which are Ripple (XRP) and Cardano (ADA). I don’t think that either of those two will cease to exist, so I don’t plan to change this for at least 6 years. However, this is crypto, so anything can happen. It’s gambling for gamblers.
Why rebalance now in this market downturn?
What the market is doing has no bearing on whether I rebalance or not. I’ve simply chosen to look at these things once a year, usually in January.
Shouldn’t you wait until the market hits bottom before rebalancing into a higher stock allocation?
No.
Although it may seem harmless, this is still an attempt to time the market. How do you know what the bottom is? Maybe this is the start of a 5 year bear market. Or maybe that “bottom” I chose wasn’t the real bottom, and we’re still going to go lower. Slippery slope.
I try to take “timing” out of the equation by sticking to my plan of rebalancing every January.
Stick to the Plan. Stay the Course. 20 Year Career.
TL;DR
Just me talking to myself about rebalancing.
Stick to the Plan. Stay the Course. 20 Year Career.
-Sensei
Agree? Disagree? Questions, Comments and Suggestions are welcome.
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