The Full Motley: 3Q 2009

This week was when I was slated to re-evaluate my allocations, which I somewhat missed but that's not too upsetting because July 2009 was the best single month of the DOW since 2002, so I was probably best off to just let things sit as they were.

But aside from the market boom, Vanguard.com had some restructuring since my last personalized update, so now I can track the progress of my account much easier.  Keep in mind that the most important focus of an active portfolio is the asset allocation, so it matters less whether the current balance in the portfolio is $10,000, $100,000, or $1,000,000, than how the 100% is split.

Here are my current allocation:
Vanguard Total Stock Market Index Fund (fund 85) = 44.5%
Vanguard Explorer Fund Investor Shares (fund 24) = 23%
Vanguard Total International Stock Index Fund (fund 113) = 14%
Vanguard High-Yield Corporate Fund (fund 29) = 10.5%
Vanguard Total Bond Market Index Fund (fund 84) = 5.5%
Vanguard GNMA Fund Investor Shares (fund 36) = 2.5%

So, the first step is to compare these real numbers to my current and target allocations:

Fund # - Real / Current / Target
Fund 29 - 10% / 0% / 5%
Fund 84+36 - 5% / 55% / 10%
Fund 24 - 23% / 15% / 25%
Fund 113 - 14% / 5% / 10%
Fund 85 - 45% / 25% / 50%

At this point, I could simply flip 5% from Fund 29 to Fund 84 and another 5% from Fund 113 to Fund 85, and then set my current allocations to my target allocations.  This was the goal that I had prepared back in February, and it would make future re-evaluations very simple because any change will reflect the performance of the holdings (unless there is a change in my target allocation).

Alternatively, I could continue to direct a higher percent to Fund 84 and Fund 85 than I have going to Fund 29 and Fund 113, respectively, which is what I am doing now.

I don't think we are going to see a big gain until 4Q ("fourth quarter," i.e. Oct-Dec) in the stock market again, so I believe whatever money I add there may be nullified in the next few months, so I would just as soon keep new money going in than I would be to rearrange my existing amounts.  Plus, I have a curiosity to find out how long it will take for me to build up 10% in Fund 84 without dumping new money to it.