Converting existing 401k into permanent portfolio

[jwart]

Hello Everyone. I have been following this forum for the better part of this year after discovering the crawlingroad website. I want to say thanks to all of you who post and share as i have benefited greatly from it. I have already put on three different portfolios this year and its been a very rewarding experience to see all of them work in different economic conditions.

At this point, i am thinking of converting my existing 401k into a pp and wanted to see what what the general consensus is on how to go about it.

I have about 20k in the 401k that i had allocated as such :

Vanguard Prime Money Market   21.45%
Fidelity Emerging Asia 5.30%
Fidelity New Markets Income 7.01%
PIMCO Total Return Instl 35.52%
Vanguard 500 Index 7.74%
Cohen & Steers Realty 6.25%
MFS Utilities A      16.73%

I also have about 2500 hundred in a roth ira that i was looking to use to satisfy the long term treasury purchases.

I am also looking to put the gold portion in a taxable account with additional funds.

These are the list of applicable funds i can choose from

Vanguard Prime Money Market Vanguard Funds VMMXX
Fidelity Emerging Asia Fidelity Investments Funds FSEAX
Fidelity Select Gold Fidelity Investments Funds FSAGX
Lazard Emerging Markets Equity Instl Lazard Funds LZEMX
Vanguard Emerging Markets Stock Index Vanguard Funds VEIEX
Fidelity New Markets Income Fidelity Investments Funds FNMIX
PIMCO Total Return Instl PIMCO Funds PTTRX
Vanguard 500 Index Vanguard Funds VFINX
Vanguard Windsor II Vanguard Funds VWNFX
Vanguard STAR Vanguard Funds VGSTX
T. Rowe Price New Era T. Rowe Price Funds PRNEX
Cohen & Steers Realty Cohen & Steers Fund CSRSX
T. Rowe Price New Horizons T. Rowe Price Funds PRNHX
MFS Utilities A MFS Funds MMUFX
American Funds Capital World Growth & Income R4 American Funds RWIEX
Vanguard Mid-Cap Growth Index Inv Vanguard Funds VMGIX
Dodge & Cox International Stock Dodge & Cox Funds DODFX

In summary, i would appreciate the input of the community in figuring out the equity portion of my permanent portfolio as well as the overall make up of the portfolio.

Thanks for reading.

[KevinW]

I have already put on three different portfolios this year

Does that mean you have more assets than just the 401k and Roth IRA?  It's generally easier to make one big PP out of all your assets than several smaller ones.

Out of that list of funds, only

Vanguard 500 Index Vanguard Funds VFINX

meets all the requirements of a PP asset.  It would be a good choice for PP stock.

Vanguard Prime Money Market Vanguard Funds VMMXX

is IMO acceptable as PP cash as a temporary measure.  T-bills are only a small minority of its holdings, so you should eventually switch to a pure T-bill solution, but it looks like the best you can do in the mean time.

As is often the case, none of those funds are viable for the gold or bond allocations.

Are there really no other bond funds available?

[jwart]

Kevin W,

1.  I have other other assets more than the roth ira and the 401k. I have merged all 3 separate permanent portfolios  in my taxable account into a big one and manage it as such.

2.I agree with your choice of vfinx. What about adding the Vanguard Mid-Cap Growth Index to the mix since it covers even more comapnies (in a 50/50 split) and having that represent the equity portion?

3. VMXXX and PTTRX are the only available bond choices

[KevinW]

OK.  I would go one step further and consider the taxable and tax-advantaged accounts as one big PP.  That will give you a lot more flexibility which will make it easier to work around the limited 401k options.

The PP depends on the stock allocation to reflect prosperity of the economy as a whole.  So I think it should be fully invested in a broad-market index fund.

[jackely]

I thought about doing this too but gave up on the idea. First off, there is no gold option whatsoever, and everything else they have is such a hodge-podge mixture of things I can't even begin to make sense of it to fit it into the PP.

I did think of using the closet thing they have to a stock index fund as the stock part of my entire PP. Might still do that but right now I'm not real confident in the 401k options I have. I have always managed to get better returns than they do and I don't even work at it that hard.