I have been talking about analyzing and re-balancing my 401(k) since May, 2010 and haven’t actually done anything about it since August of 2009! That is ridiculous, for anyone, nevertheless a guy who works in the financial industry and runs this fantastic personal finance blog. So today, I am going to analyze my 401(k) using MorningStar’s Free X-Ray Portfolio tool and then changing those holdings if needed.
Analyzing my 401(k) Holdings
Let us first take a look my holdings as they were set last August and how future contributions will be put in.
|Holding||Percentage of Account||Current Future Contributions|
|RERCX - Amer Funds EuroPac Grth R3||5.2%||5.5%|
|RGACX - Amer Funds Growth Fund R3||24.20%||26%|
|IARCX - Invesco Real Estate C||4.8%||3.5%|
|NBPBX - Neuberger Ber Partners Adv||9.9%||10.3%|
|NBREX - Neuberger Ber Regncy Trust||16%||15%|
|OPGIX – Oppenheimer Glob Opp A||11%||10%|
|OPSIX – Oppenheimer Global Strategic Inc A||1.8%||1.5%|
|OIBAX - Oppenheimer Intl Bond Fund A||2.6%||2.5%|
|QVSCX – Oppenheimer Sm & Mid Cap Val A||10.1%||10.2%|
|CGRWX – Oppenheimer Value A||14.4%||15.5%|
As you can see a few of my mutual funds have deviated from where we set them a year ago. Why? It is because that particular fund has grown larger in comparison to the others within the portfolio; alternatively, that fund may have decreased in value as compared to the rest of the portfolio.
Well if we take IARCX, my REIT, for example (which is close to where we are at from my last Re-Balancing) is up 36% this year. It would have been nice to put all contributions into this fund last August, but I didn’t because I prefer a more balanced approach. This is when I use MorningStar to determine whether I have that balanced approach.
401(k) Review With MorningStar X-Ray
I know that I am young (29 in one week!) and that I have 30 or so years before I can even begin to think about taking money out of my qualified accounts, but I I don’t have a naturally high risk tolerance.
However, knowing that I am unlikely to touch my retirement account (hell, it took me a year to write this post) my goal is/was to create an equity heavy portfolio that is a little bit out of my risk tolerance range, knowing that I won’t change it.
According to MorningStar X-Ray allows you,
Pinpoint your portfolio’s strengths and weaknesses.
At a glance, understand the basic characteristics of your portfolio including its asset allocation, exposure to different investment styles, geographic regions, and sectors. Plus, easily analyze how well your holdings and expenses are adding up to meet your financial goals.
As you can see I have a blend of growth and blend mutual funds with a small position in bonds, real estate and cash. My Mutual Fund Expense ratio is around 1.19% – not fantastic but not horrible considering I don’t have the choice to use index funds.
Before I tell you what small changes I plan on making, I’d love to hear your ideas.