PP for each account or PP overall?

[PFG]

I've read the book. Two or three times. And I don't recall if this was addressed.

Do you view your entire portfolio as the PP, or do you look at each account as an individual PP?

Example 1:
- 401K PP
- IRA PP
- Taxable account PP

or

Example 2:
- Use my 401K, IRA and Taxable accounts as vehicles to execute the PP. Meaning, my 401K might have stocks, IRA might have Bonds and Cash, and gold held in taxable account.

To me - keeping it simple means using my Example 2. It also helps get the MOST PURE PP possible. As we all know, trying to do individual PP's in each investment vehicle is difficult and requires you verge off the path of PP.

Maybe I just answered my own question.

Interested to see what others do and if there is a better option over the long haul.

[flyingpylon]

Personally, I have a few different accounts that I manage together as one PP (plus others that make up a VP).  However, unlike your example #2 I tend to have multiple asset types in each account partly because one account is significantly larger than the others and also for institutional diversification.  There are lots of variables that will influence each investor's plan.

[ns2]

Now that I've bought I-bills for me and my wife on Treasury Direct our PP consists of 11 different accounts.

I do a separate one for my wife's IRA/401k but I try to do the rest of it together as one. The problem with doing each account separately is the tax implications. Ideally you want the assets that are throwing off taxable income in your tax-advantaged accounts. But don't make the same mistake I did when I re-balanced last year of not leaving enough of each asset in the taxable account to be able to do some tax-loss-harvesting.

I think this is the biggest pain in the assets as far as the PP goes but there is one thing possibly good about it, at least for me. It makes me highly motivated to leave it alone and not look at it very often.

[KevinW]

IMO this is a fine-tuning issue; either approach is fine, there probably isn't a very significant difference between the two, so you should do whatever you prefer.

Personally I started out using your Example 2 method and then switched to Example 1, i.e. now I have a separate 4x25 PP in each account. The reason was because there was a period where I had assets split between a Roth IRA and 401k, and the Roth went way down. The loss was offset by the assets in the 401k in PP fashion, but I was still uncomfortable to see the Roth, with its more preferable tax treatment, decline, and felt some regret that I hadn't allocated things differently. So then I decided to allocate each account to its own 4x25. That way I won't ever have regrets about how I positioned the assets.

[Ad Orientem]

Your mileage will vary here as each person's situation is different. FWIW I find it a general pain in the @$$ trying to keep all the different accounts in sync with each other. And as I've noted elsewhere, for most people 401Ks just aren't PP friendly. I usually just recommend doing a Boglehead type portfolio in those cases. But as I noted above, your mileage will vary. I'd just go with whatever is most convenient for you.

[Tyler]

I personally manage my taxable accounts (brokerage, savings) as one PP, and my tax-deferred accounts (401k, IRA) as another. I find it simpler that way, and like how it keeps both my near-term money and long-term money equally less volatile.