Gyroscopic Investing

Hello all. New to the forum and new to the PP.

In 2007 I received a lump sum payout from a discontinued pension plan and used the occassion to
finally pull all of my scattered investments together in one place. Being a lazy portfolio sort of investor
I chose a T. Rowe price "set it and forget it" retirement fund with a target date of 2020
(the year I have to start taking minimum IRA withdrawals, BTW).

Well, you probably don't have to guess how that turned out (although I must say it did recover
nicely and much faster than expected).

Converted 80 percent of it to PRPFX in January to see how it went and did the remaining 20 percent
yesterday so now I'm 100 percent PRPFX.

Except for my wife's and my 401k's, that is.

Like a lot of people I tend to just go down the list of options and pick a little bit of this and a little bit
of that because I  know you are supposed to "diversify". So it's basically a hodge-podge of
investments with little rhyme or reason behind it, unlike the PP. The total in both accounts now amounts to
about 25 percent of our total portfolio.

So it occurred to me after reading the forum and seeing how easy it is, that maybe I
should switch to my own self-managed HB PP and integrate the 401k's into it by using them as
the 25 percent stock portion. Several index funds are available in both accounts so selection would
be a no-brainer.

Any body see any problems with that idea (the other 75 percent is pretty evenly split between
an IRA and taxable accounts)?

jackely wrote: Any body see any problems with that idea (the other 75 percent is pretty evenly split between
an IRA and taxable accounts)?

Not at all.  

Why do you want to switch to the HB x 4, by the way?

Yep, that's what I would do.

Sounds like a great plan.  If you have some choice in your 401k, you might prioritize bonds, cash, stocks, then gold.  Of course, if you can only find an index fund, that is where you pretty much have to put it.

You might have read craigr's advice on this before, but the reason to prioritize bonds and cash in your 401k is due to the coupon and interest payments they throw off... it's best to keep that in a tax deferred account.

Good luck!

Adam1226 wrote:

jackely wrote: Any body see any problems with that idea (the other 75 percent is pretty evenly split between
an IRA and taxable accounts)?

Not at all.  

Why do you want to switch to the HB x 4, by the way?

Mainly because I don't see any other way to integrate the 401k. Otherwise I'm pretty happy with it.

Storm wrote: Sounds like a great plan.  If you have some choice in your 401k, you might prioritize bonds, cash, stocks, then gold.  Of course, if you can only find an index fund, that is where you pretty much have to put it.

You might have read craigr's advice on this before, but the reason to prioritize bonds and cash in your 401k is due to the coupon and interest payments they throw off... it's best to keep that in a tax deferred account.

Good luck!

Thanks. I'll look for craigr's advice. I thought I read the opposite advice somewhere (keep stocks in 401k). I don't think there is any gold option in my 401k plan and the reason I liked the stock idea is because it would be the simplest to identify out of all the options available. The rest of the funds are a hodgepodge of things.