The Full Motley: 3Q 2011

Wow, things have been moving along at such a fast pace that I am surprised how soon I am to my rebalancing again.  Sunday will be July 10, 2011, so I can submit my changes today or on Monday.  Based on the amount of homework I have to finish, I opted to distract myself by rebalancing today.

When I logged onto my accounts today, I saw this as my current allocations:

Fund # - Real / Current / Target
Fund 24 - 25% / 0% / 25%
Fund 29 - 5% / 0% / 5%
Fund 59 - 25% / 0% / 25%
Fund 84 - 10% / 0% / 10%
Fund 85 - 25% / 0% / 25%
Fund 113 - 11% / -1% / 10%

Due to rounding, I had 101% of allocations in my 401(k) and I had no discernable means of moving the excess 1% anywhere.  Obviously, this glitch was due to rounding.  When I got into the more specific details of the funds, I ascertained that the following moves were needed:

• Vanguard High-Yield Corporate Fund (add small amount)
• Vanguard PRIMECAP Fund Investor  (add small amount)
• Vanguard Total Int'l Stock Index Fund (remove 1%)
• Vanguard Total Bond Market Index Fund (add <1%)
• Vanguard Total Stock Market Index Fund (remove small amount)

Once again, not much activity, but the gain in the Vanguard Total International Stock Index Fund was removed from the fund and dispersed amongst other funds that have fallen.  The overall expectations of the domestic markets right now is that they will fall through October and then hit a sharp rise, although that has not happened quite to the extreme that I have been anticipating.  The markets have been going up lately and they are still above where they were in January 2011, which is especially surprising to me.  My prediction was that the markets would gain under 10% for the year.  At this point, it looks like they are in position to gain 10-15% for the year.

Therefore, I have a decision to make.  I can either continue contributing to my Roth IRA or I can suspend contributions until later.  After a couple days of consideration, I opted to suspend contributions because (A) I was expecting the market would be well below 12,000 (maybe even below 11,000), and (B) I need liquid assets in case I am unable to get part-time work (or if I decide against pursuing work) before I complete my degree.