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How much time diversifciation is necessary? I contribute bi-monthly to my 401k. But on the ROTHs, I put in the full 3k at once (6k this time for my wife's since I did 03 and 04 contributions at the same time). Their held at Ameritrade, so I'm trying to pay one commision per year.

Most folks do the same with their IRA contributions (lump sum) because it's a small amount. I think in the case of an IRA, once a year for twenty years or so is sufficient time diversification.

I also agree with t on the book "The Four Pillars of Investing" by Bernstein--it really helped me a lot. I have a similar portfolio allocation as you. Yes, it's riskier than all index, but I've made some substantial gains in those others (emerging markets, foreign large and small, etc.). As long as you stick to rebalancing annually, I don't think it's too risky. Of course, Bernstein is the first to point out that when a fund has been climbing 5% a month for 6 months, it's awfully hard psychologically to sell some of it to rebalance because we all get greedy! You have to fight that urge!

My only suggestion is that unless you're paying less than 2% on that car loan, pay it off! Even if you have to reduce your savings for a while to do it. But I'm sure there are others who would disagree with me (not Suze Orman though!).

If after a minimum of five years, based on your returns, you feel that this allocation is too risky, you can slowly adjust it in increments over the next five years. But, as I said, it doesn't sound too risky to me for someone your age.

Good luck, it sounds like you're on the right track.


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