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

by Evan

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:

FundTargeted AllocationActual Allocation
Amer Funds EuroPac Grth R35%5.1%
Amer Funds Growth Fund R325%23.7%
Oppenheimer Str Income A2%1.9%
Oppenheimer Glob Opp A10%11%
Oppenheimer Value A15%14.8%
Oppenheimer Sm & Mid Cap Val A10%10%
Neuberger Ber Partners Adv10%10.4%
Oppenheimer Intl Bond Fund A3%2.8%
Neuberger Ber Regncy Trust15%15.5%
AIM Real Estate C5%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:

FundTargeted AllocationActual AllocationFuture Allocation
Amer Funds EuroPac Grth R35%5.1%5.5%
Amer Funds Growth Fund R325%23.7%26%
Oppenheimer Str Income A2%1.9%1.5%
Oppenheimer Glob Opp A10%11%10%
Oppenheimer Value A15%14.8%15.5%
Oppenheimer Sm & Mid Cap Val A10%10%10.2%
Neuberger Ber Partners Adv10%10.4%10.3%
Oppenheimer Intl Bond Fund A3%2.8%2.5%
Neuberger Ber Regncy Trust15%15.5%15%
AIM Real Estate C5%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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