About a year ago I hired a financial planner to manage assets in my retirement accounts but am starting to think about doing it myself.
I don’t disagree with the general approach they’re taking, but it seems like it should be simple enough for me to do myself every 6 months or whatever.
The gist of the strategy is a balance across large/mid/small cap and sectors at certain percents along with some % of bond funds and some real estate funds.
I think my main questions are how do I identify and compare various funds that fall into these broad categories to try and pick the ones I want to actually invest in.
Just out of curiosity, since I’m also considering bonds, what is “close to retirement” enough to consider non insignificant bod allocation?
That’s totally up to you. My personal number is about 5-10 years from retirement, though I’m pretty risk tolerant.
My plan is a rising equity glidepath. Basically, I’m going to load up on bonds (20-40% bond tent) a few years before retirement, and then ramp back down to no bonds in the first 10-20 years of retirement. I’m planning to retire early, and this plan seems to have a higher chance of success vs a consistent bond portfolio given a >30 year retirement.
The same strategy works for a shorter retirement, and you can keep your bond allocation constant as well. This strategy makes sense if you have a high risk tolerance, but recognize the need for portfolio stability in retirement. If you have a lower risk tolerance, do the “normal” strategy that target date funds use: 10% starting out, and increase as you get older.