• Planning the Joint Retirement Portfolio: Slicing Up The Allocation Pie

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    This is part 4 of our planning the joint portfolio series. To see how we got here, read this intro post, then read part 1: The Magic Number, part 2: Currently, It’s A Mess, and finally part 3: Large Scale Allocation.

    In the past four months since the last post in the series, we were mostly waiting for my SIMPLE IRA transfer from my old brokerage to Vanguard. Since that transaction is now complete, we have had some time to talk about the finer points of our retirement investment portfolio.

    In that timeframe we also read a few good investing books. Her read A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, and I read All About Asset Allocation. Both of these books provided us with a good foundation for investing.

    In order to come up with a diversified retirement portfolio, we had to know ourselves a little bit. We know that we don’t plan on retiring for another 30+ years, we are buyers and holders, and we can tolerate a lot of risk right now. If it were a perfect world and Her and I had one brokerage company that handled our accounts, the breakdown of our asset allocation would be as follows:

    We’re going to have a heavy investment in small-caps, leaning towards value stocks. I know, I know, past performance isn’t necessarily an indicator or future performance, but 50+ years of data is pretty compelling. The large- and mid-cap stocks will probably be covered by investing in total stock market index funds. In fact, we’re going to try and get most of our portfolio in low-expense index funds. Yes, REITS are still there, mostly because the companies in many REIT index funds manage commercial properties and not residential housing. And of course good ol’ bonds, just in case the market goes splat.

    There you have it. Now all we have to do is implement it. Your comments are welcome.


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