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403Bing good

October 13th, 2009 at 08:56 pm

Saving log - $4 tip box
Spending log - $1.75 coffee
Found money - $0.33 (1 dime on road, 1 dime on edge of sidewalk, 1 dime on gravel driveway, pennies on sidewalk and bus stop)

Lest you think that my current financial news is all about small time dime-dar (which was excellent today), I note that the big stuff - current strategy on my 403B - is paying off.

My strategy started in early 2007, when I re-allocated from 80% stock/ 20% bond to 40% stock/30% bond/10% gov bond/20% cash. In other words, my portfolio looked like a 60 yr old man. In hindsight, I was a bit early. Still, the proportions held within 2-3% of each other even through the big happenings of Sept 2008.

I "lost" about 10% of 403B during the gyrations. By October 2008 I was researching the funds available to me to re-mix and re-allocate. I made my choices and re-allocated only on the new money in late October. In other words, what I had already was the 40/30/10/20, the new money (added as I got paid, bi-monthly) was re-allocated as 90% stock/10% bond.

I still "lost" a little bit in the 1st quarter of 2009, but I was patient with the stocks the new funds were buying...and especially happy that the price was cheap.

2Q 2009, my 403B net worth jumped 11K. 3Q 2009, my 403B net worth jumped 12K. During those two quarters, I contributed 8K to the mix, so about a 1/3 my net worth jump is due to injections of new money. Still, we are talking about a 15K increase in just those 2 quarters. (I'm in the 90K range).

The mix has shifted to 52% stock/25% bond/8% gov bond/15% cash. Still fairly conservative, if you believe conventional wisdom. Now I have several choices - if I think that we are in for another stock crash, I can rebalance back to the old 60 yr old man portfolio mix, and wait. Or I can re-allocate the new money into something more conservative, or I can do nothing and wait until I'm at the 65% stock/35% everything else range (my target). And if I wanted to not wait, I could deploy the 15% cash into stock.

Right now I see issues with everything. Stocks could crash (stock), bond values will drop as soon as interest rates go up (bond), no interest, no FDIC-like insurance, and the dollar is weakening (cash), and a whole lot of federal debt (gov bonds). Might just as well stay the course, keeping myself conservatively diversified. Worst comes to worst, the 403B is a glorious tax deferral.

1 Responses to “403Bing good”

  1. merch Says:

    I agree in that I see another dip coming. I believe the market rose too fast, too soon. I also don't see a lot of good news - employment, cap and trade, health care reform, Bush tax rates expiring, second stimulus.

    I would say keep your core investments on your long term allocation (no one can perfectly time th emarket). I would then take a samll amount (maybe 5%) and use that for more speculative plays. Maybe invest that in a commodity fund or emerging market.

    I had my in financials and REITs. In September, I solid off all thfinacials and cyled them into EM. So, I am speculating on REITs and EM via mutual funds. Again, it's only about 5% of my retirement.

    Good luck.

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