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Author: Chilliwilly Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 294  
Subject: Reassessment of Retirement Portfolio Date: 2/9/2009 2:47 PM
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Hi Folks,

I am 41 years old with a wife whose a nurse, and 2 young children. I have worked for small companies my entire life, none of which had any type of 401K or retirement contribution program. This has resulted in getting a late start in my retirement planning. I have made pretty good money over the last several years ($200K+ per year) and have/are basically playing "catch up". (I have resisted the temptation to turn my money over to a professional advisor given my "controlling" nature and believing in my own abilities. Working from home, I have a fair amount of flexibility to research investment options/strategies.)

After losing a significant amount over the last several months, I feel it time to rethink my investing strategy moving forward. I have a fairly high risk tolerance.

Several years ago I took what money I had and invested it across 6 funds in my SEP (and have been contributing to it since). The following is roughly my allocations:

FCNTX FIDELITY CONTRAFUND (Large Cap) - 30%
FDIVX FIDELITY DIVERSIFIED INTERNATIONAL - 15%
FMCSX FIDELITY MID CAP STOCK - 18%
FSLCX FIDELITY SMALL CAP STOCK - 20%
FSICX FIDELITY STRATEGIC INCOME - 15%
FTBFX FIDELITY TOTAL BOND - 2%

I also have some money in S&P Index fund with Vanguard which is just sitting there.

I realize this is all with Fidelity, but at the time, they were the highest rated funds within each category. Some have lost their luster (namely the Mid and Small cap ones) since then.

Anyway, I have become a firm believer in index funds and plan on rolling most if not all of my holdings into them. I plan to roll the Contrafund into the S&P index fund I alread have. I also plan on rolling the Diversified International fund into an index fund that tracks the rest of the world such as the Vanguards, Total International Stock Index (VGTSX) and re-balance the allocation to around 25% to 30%. I may get rid of the Mid Cap and just go with small cap index and put the rest into the International fund. I would also like to put some money into a REIT, but am still researching my options.'

I would really appreciate any advice on the soundness of this approach? Does it make sense to go "Index" where ever possible? Do I need to be more selective such as go with "Emerging Markets", "Established Markets" or with "Total Market" indexes within the category? What is a good allocation for someone in my position across funds? Any ideas on REITs? Is a REITs index a good play?

Your input would be very much appreciated.

Thanks,
Bill
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