Time to Review Your Retirement Plan

[snafu]

The stock market is touching on all time high and while it's good news, it may be time to lock in some profit. What I'm trying to emphasis is that since it's mid year, we need to review our retirement/savings portfolios no matter what type is held. If you participate in some type of retirement plan you need to know what you hold in your plan, the fees/charges/MER and whether it is still appropriate for your age and gross income. It's easy peasy to Google the name of the Fund you chose. That name will show you the top 10 holdings. Are you happy with results?

[feh]

While I agree with the advice to stay on top of your retirement accounts, I'll have to disagree with the recommendation to lock in gains. That is simply market timing.

[snafu]

Good point. Perhaps I didn't put it well. I was not suggesting taking out/removing profit. I was trying to ask SAers to consider re-balancing their holdings. If you prefer to ride it up and ride it down, ok.

[disneysteve]

Rebalancing is fine and is something everyone should be doing on a regular basis, especially in a volatile market. If your intended allocation was 70% stock and 30% bond and the stock market goes on a great run, you could find that your real allocation has become 80/20 or 90/10. You can rebalance by either shifting assets from the stocks to the bonds or by changing the allocation of new money going into the account which will rebalance more slowly over time.

[kork13]

This brings up a question I've not really been able to answer.... At what point do you NEED to rebalance? I normally do it annually (occasionally semi-annually), but even over that relatively long period (at least as far as the markets are concerned), my portfolio is never more than 1%-2% off from its intended allocation. I still rebalance my portfolio every year regardless of how little or great it's off kilter, but because it's always just been a relatively minor deviation, I simply add some additional cash to balance things out, and call it good.

So the thought has occurred to me multiple times: at what point is your allocation so far off that you NEED to go in and fix it? 4%? 5%? 8%? 10%? Just curious what you all think.

[ktmarvels]

I've seen recommendations to do it either based on time or % deviation. Sounds like you are doing it based on time, since you do it annually. The percentage I saw recommended was +/- 5% from your goal, although I believe others were mentioned. 5% just sticks out to me.

We have just started investing outside of target funds and monthly I will allocate money to the appropriate fund to maintain my goal percentage. Almost like the best of both worlds?!? (Or maybe just more work )