Ok, I am almost two weeks away from reorganizing my 401(k) investments! If you recall, I added the Vanguard Total Bond Market Index fund (Fund 84) to my portfolio in February and I directed 75% of my incoming assets to that fund (I didn't go with 100% at the time, because I didn't want to miss a market rally, which we saw for six weeks in March and April) and my goal was to get it up to 10% of my overall balance*. I am happy to report that it is currently at 5% of my overall balance! Therefore, I will most likely keep 50% going to Fund 84 and decide on my proposed mix for after Fund 84 is 10%, then use the remaining 50% to reflect that breakdown. If I want to continue to have 10% of my incoming money in Fund 84, then I will have the first 50% like I said, and 5% from the planned 10% mix, so in reality 55% will be going to Fund 84. But that's what I have to consider over the next couple weeks.
I have been listening to Market Wrap with Moe Ansari most evenings on the drive home, and while he is typically bearish, he has made a few bullish statements to make me think that I should be more bull-ready. But as noted above, only 65% of Money.CNN.com readers thought the markets would be above 8,000 at the end of June, and they are hovering at that mark now, so a sharp retraction could be expected.
Additionally, I will look at my recent returns in the bond markets and if they are greatly above 8%, then I would consider scaling back on money going into those funds. I think the stock markets are pretty much shot right now, so their recent returns will not be reliable indicators at this point. Common sense would be more useful.
Again, I like to examine my 401(k) money quarterly and my portfolio annually. I have found it best to use your birthday as the starting date because you're typically thinking about your future then anyway, so if you were born in February, then May, August, and November are your other "quarter" months. As such, I will wait until May to make my actual move, but it's good to keep in on your mind in the meantime.
* - overall balance in my 401k plan, not including retail investments outside of my 401k.
