No. of Recommendations: 0
Hi there.. I'm new to this board, but I ran a search and noticed that at least a few people here are familiar with the Coffeehouse Portfolio. My retirement fund is based on the Coffeehouse model (not exactly as of yet, but close enough), but I have a situation that's been perplexing me a bit.

Essentially I converted my 401(k) to a Roth back in March/April. However, due to circumstances, the asset allocation percentages were skewed - with the REIT portion being severely underrepresented. Since then, the REIT fund has outperformed to narrow this gap a bit. I'm looking to start the yearly rebalance process - which forces you to sell high performing funds and buy under performing funds. However, if I want to truly follow the Coffeehouse Portfolio, the REIT should be 10% of the portfolio - not the 6% or so it is now. So, technically, I should buy more REIT, which is contrary to the reallocation theory since this was the highest performing fund. Because of this, I'm thinking of leaving the REIT fund out of the reallocation process for this year and waiting until it 'comes back to earth'.

I guess my question is.. am I making too big a deal out of this? I suppose I could throw next year's annual contribution entirely into REIT to help narrow the gap, but again, I'd be buying high, not low. Other suggestions?

Mark
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement