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Old_Skeet's New Portfolio Asset Allocations (2016)

edited December 2015 in Fund Discussions
Below is a description of my portfolio sleeve management system along with my new portfolio asset allocation targets for 2016. In short, the cash target was raised by five percent from fifteen to twenty percent while the growth area target was reduced by five percent from twenty percent to fifteen percent. The income and growth & income area targets remain the same at thirty percent and thirty five percent respectively.

Old_Skeet's Portfolio Sleeve Management System (12/18/2015)

Here is a brief description of my sleeve system which I organized to help better manage the investments that were held in five accounts. The accounts consist of a taxable account, a self directed ira account, a 401k account, a profit sharing account and a health savings account plus two bank accounts. With this I came up with four investment areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is the income area which consists of two sleeves. … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area, where the most risk in the portfolio is found and it consist of five sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty sleeve and a special investment sleeve. Each sleeve consists of three to six funds (in most cases) with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and amounts held. By using the sleeve system one can get a better picture of their overall investment picture and weightings by sleeve and area. In addition, I have found it beneficial to xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets and wish to weight accordingly. All funds pay their distributions to the cash area of the portfolio with the exception being those in my 401k, profit sharing, and health savings accounts where reinvestment occurs. With the other accounts paying to the cash area builds the cash area of the portfolio to meet the portfolio’s monthly cash disbursement amount with the residual being left for new investment opportunity. In addition, most all buy/sell trades settle from or to the cash area with some nav exchanges between funds taking place.

Here is how I have my asset allocation broken out in percent ranges, by area. My current target allocations are cash 20%, income 30%, growth & income 35%, and growth 15%. I do an Instant Xray analysis on the portfolio quarterly (sometimes monthly) and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc. Currently, going into 2016, I am about 20% in the cash area, 30% in the income area, 35% in the growth & income area and 15% in the growth area.

Cash Area (Weighting Range 15% to 25% with target being 20%)
Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual)
Investment Cash Sleeve … (Savings & Time Deposits)

Income Area (Weighting Range 25% to 35% with target being 30%)

Growth & Income Area (Weighting Range 30% to 40% with target being 35%)
Global Equity Sleeve: CWGIX, DEQAX & EADIX
Global Hybrid Sleeve: BAICX, CAIBX & TIBAX

Growth Area (Weighting Range 10% to 20% with target being 15%)
Large/Mid Cap Sleeve: AGTHX, IACLX, SPECX & VADAX
Small/Mid Cap Sleeve: PCVAX, PMDAX & VNVAX
Specialty Sleeve: LPEFX, PGUAX & TOLLX
Spiffs: None

Total Number of Mutual Fund Positions = 47

I wish all ... "Good Investing."


  • edited December 2015
    @ Old_Skeet - an impressive collection of funds. Do you have a benchmark that you measure your portfolio's performance against? How have you fared over the years?

    I now use mostly index funds for equities, mostly actively managed funds for fixed income and only actively managed funds for my "non-traditional" alternatives (long-short, managed futures and equity market neutral). I was fortunate to have bought into some AQR alternative funds before the minimums went through the roof (at least on Fidelity, for taxable accounts).
  • I'd be curious to see how performance has been for the overall portfolio over time, including the cash position since that is a call you're making.
  • edited December 2015
    Hi @Bitzer and @JoJo26,

    Thank you for your comments and questions.

    The below link will, perhaps, provide the details you seek.
  • @old_skeet
    Need to know where are you in life? Are you retired living on your investments, pension and SS?

    47 funds look like a lot to me. Have you considered creating a shadow portfolio of about 20 funds or less to see if you can get the similar returns as the 47 funds?
  • edited December 2015
    Hi @Dex,

    Thank you for your questions.

    I am retired. Catching pension income, social security income and drawing on investment income when needed. In addition, being a former corporate credit manager, I do some consulting work form time-to-time.

    To run my portfolio form a win, place, show perspective requires at least three funds per sleeve. And no, I have not given much thought to reducing the number of funds held for many reasons one being having to pay large capital gains if I sold off some of these funds, to reduce their number, with one being held since to my teenage years (FKINX).

    And, so it goes ...

  • Old_Skeet said:

    if I sold off some of these funds, to reduce their number, with one being held since to my teenage years (FKINX).

    And, so it goes ...

    I had that plan when I was young but go sidetracked. I wish I would have stuck with it.

  • @Old_Skeet I found that the additional reward (if any) gained from managing a varied portfolio of active funds did not justify the effort involved.

    But if I may borrow a (in my opinion) corny phrase from another investing website, "there's more than one road to Dublin"
  • edited December 2015
    Hi @Bitzer,

    Thanks again for making comment.

    I feel my active management has indeed been worth while. Let me explain. Take a million dollar portfolio and the difference of my ten year annualized return of 6.9% vs. my buddies ten year return of 5.6% as noted in the post that I linked equals a spread of 1.3% or about $13,000.00 per year. And, when ths is carried out over a ten year period this amounts to about of $130,000.00. I score this as being worth my time. At least, it has been for me.
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