Home Investments My Journey to Millions Reallocates his 401(k) After Analyzing his Portfolio

My Journey to Millions Reallocates his 401(k) After Analyzing his Portfolio

by My Journey to Millions

Last week I reviewed Morningstar’s Free X-Ray Tool using my own 401(k).  I believe that most people should leave their retirement accounts alone, both in terms of invading it and asset allocation within the account.  I personally take a very balanced, hands off approach to my 401(k), choosing to look at my 401(k), as I should…an account I won’t be touching for 30 to 40 years.

As such, I actively made the decision not to reallocate or change anything since I started contributing about a year ago.  My original allocation vs. how it worked out over the past year:

Fund Targeted Allocation Actual Allocation
Amer Funds EuroPac Grth R3 5% 5.1%
Amer Funds Growth Fund R3 25% 23.7%
Oppenheimer Str Income A 2% 1.9%
Oppenheimer Glob Opp A 10% 11%
Oppenheimer Value A 15% 14.8%
Oppenheimer Sm & Mid Cap Val A 10% 10%
Neuberger Ber Partners Adv 10% 10.4%
Oppenheimer Intl Bond Fund A 3% 2.8%
Neuberger Ber Regncy Trust 15% 15.5%
AIM Real Estate C 5% 4.8%

Using Morningstar X-Ray Evaluation to Reallocate my 401(k)

This above allocation led to the following Morningstar X-Ray* evaluation:

Morningstar X-Ray Tool Results 1

Morningstar X-Ray Tool Results 2

First thing I should mention is my expense ratio.  While an expense ratio of 1.1% is not great, when compared to low fee index funds, I do not have low fund index options within my 401(k).  This 1.1% is worth it considering my match, and sometimes a 401(k) is better than an IRA.

The next thing I noticed that my cash position of (6%) is a little high considering my age and risk tolerance; however, I am comfortable with my 70% U.S. Stock, 18% Foreign Stock, and 4.5% Bon positions.

Instead of selling and repositioning, I have decided to just alter my future contributions:

Fund Targeted Allocation Actual Allocation Future Allocation
Amer Funds EuroPac Grth R3 5% 5.1% 5.5%
Amer Funds Growth Fund R3 25% 23.7% 26%
Oppenheimer Str Income A 2% 1.9% 1.5%
Oppenheimer Glob Opp A 10% 11% 10%
Oppenheimer Value A 15% 14.8% 15.5%
Oppenheimer Sm & Mid Cap Val A 10% 10% 10.2%
Neuberger Ber Partners Adv 10% 10.4% 10.3%
Oppenheimer Intl Bond Fund A 3% 2.8% 2.5%
Neuberger Ber Regncy Trust 15% 15.5% 15%
AIM Real Estate C 5% 4.8% 3.5%

We will see how my allocation does going forward!  What are your thoughts? Should I have done something different?

Want to try Your Free Morningstar Portfolio X-Ray Evaluation*?

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