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(Cross posted to REHP)

Well, life has settled down and a bit and I thought it was about time that I looked at my asset allocation again. The numbers have actually gone up a little bit, despite the fact that I have not been able to add anything in the last year. (Going back to school will do that to you....)

Anyway, I was noticing that because my balances are still somewhat low, I am torn by the impulses to maintain an asset allocation and limit fees. That is, if I impose the 75 stocks/15 bonds/10 REITs asset allocation that I chosen onto my investments, then I incur additional fees than if I let them ride at about 62/23/14. This is somewhat complicated by the fact that my money is separated into a Rollover IRA and a Roth.

Now, the fees aren't huge, and the percentages aren't so far off. But I'm just curious how other people have chosen to deal with this issue. How did you analyze the problem, or choose to respond? In particular, since value changes daily and you don't want to fall below the minimum amounts, how much padding do you maintain on your accounts?

One thing to consider is that it is important to set up the proper investment attitude and habits. So that forcing myself to rebalance every 6 months could be a good thing for the long run, even if it costs me an extra $40.

I'm sure most of you have large enough investments that this is no longer an issue, but I'm early enough into the accumulation phase that this is a concern especially in my Roth.

I'm interested in any suggestion that you might have.

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