My Current Asset Allocation and Net Worth Growth – May-June, 2011

• Have contributed the maximum allowed by law for 2011 to my Vanguard Roth IRA ($5000). I am very proud to have achieved this!
• Am maintaining slightly over my target of 6-9 months of expenses in a cash reserve fund in my Dollar Savings Direct high yield online savings account. This is due to being paid my entire summer salary (through August) at the end of May. However, this should correct itself as we get towards the end of the summer.
• Have rebalanced my mutual fund portfolio to meet my asset allocation target %’s (75% equity, 25% fixed income overall) 
• Have donated $1,300 to Multiple Sclerosis Foundation in 2011 (5% of income) and passed my target fundraising amount of $5000 for my MS 150 ride that took place June 11-12, 2011. I will most likely be shooting for raising $7500 for 2012. Rock n’ Roll!

For a detailed list of my short term, mid term, and long term financial goals, click on the link below:

My Personal Finance Journey – Financial Goals

• Overall Fixed Income / Equity Allocation
• Currently, 29% of my net worth is invested in fixed income instruments (cash or bond funds), and 71% is invested in equity.
• This is 4% off from my targets for these categories of 25% (fixed income) and 75% (equity), but still within my +/- 5% allowable band limits.

• Equity Allocation
• In the equity portion of my portfolio, 73% is invested in US Domestic Equities with the remaining 27% being held in international equities. 
• This is almost perfectly aligned with my equity breakdown targets of 71% and 29%, respectively, for US Domestic and international holdings.

While the overall percentages for these categories looks fairly good, a detailed look (table below) at the allocation breakdown reveals the real story and provides for better analysis of the current state.

Remember: a red flag goes off if your current % allocation in a category is greater than +/- 5% off of the target allocation. This is my trigger that I need to rebalance that aspect of my portfolio.

% Cash (money market target 5%) 10%
% non-inflat Bond Funds (target 15%) 15%
% TIPS Bonds (target 5%) 3%
% International Equity (Target 11%) 10%
% International Emerging Markets (Target 11%) 10%
% Domestic Large Cap (Target 8%) 7%
% Domestic Small Cap (Target 8%) 9%
% Domestic Small Cap Value (Target 14%) 14%
% Domestic Large Cap Value (Target 13%) 13%
% REIT (target 10%) 9%

Analyzing my current asset allocation percentages, it appears that my current asset allocation is aligned with my target levels with the exception of the cash portion of my portfolio. This is once again due to the fact that I have more cash than normal on hand in my money market portfolio from being paid in advance for the entire summer period at the end of May.


Because of this, no action needs to be taken at this time, as this will correct itself as we move forward in the summer and I naturally spend more money.

My next moves for the June-July, 2011 time frame will be to do the following:

• Now that I have fully funded my Roth IRA, any extra money I have will most likely go towards paying off my condo loan and obtaining even more equity in that investment. The only other option I would have is to invest in my individual mutual fund (taxable) account. But, I feel that it would be a more efficient use of my time to build up more equity in my condo. What do you all think?
• Continue investing $41.67 each month in microloans to help the working poor in Peru and/or Nicaragua  This is part of my 2011 goal of having $500 in microloans. I am currently more than half way there!
• Save 30% of any income from blogging for 2011 tax payments next year at tax time.

Wish List 

• At some point, purchase the Vanguard Total Stock Mkt Idx (MUTF:VTSMX) to replace S&P 500 index fund. This gives better, broader diversification to the US stock market.
• Install a stacked washer/dryer combination unit in to my condominium. This one will be a long shot, but it just may be possible! More than likely, this will be something that I will do in 2012-2013.