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Subject:  How to diversify into bonds Date:  1/8/2014  7:00 PM
Author:  EnCoderer Number:  35158 of 37017

I'm 31. My portfolio is $70k. Right now, it's split 50/50 between index funds and individual stocks. 8 individual stocks. $40k is in tax advantaged accounts, the rest in brokerage.

I have what I consider a high appetite for risk in the past, but we just bought our first house (In San Francisco. So while it's not big, it's nobodies definition of starter house).

So, I want to diversify myself better. Obviously I have 2 methods at my disposal:

1) Sell existing assets and buy bond funds. I'd do this in my 401k or IRA to avoid any tax bill coming due.

2) Roll new contributions into a Bond fund. I could do this fast or slow.

If you were in my position, what would you do?

Every month, I have $4k to allocate. $1k in my 401k, and another $3k (after tax) in company stock options. I execute my options monthly so every month I have seasoned funds available that I can sell at long-term rates and re-invest somewhere. Until a few months ago, I just sold for cash to accumulate a San Francisco sized down payment. For the last few months I've just let them sit. If the stock hit a rough patch i would consider sitting on the shares but as-is I'm comfortable taking profit and selling at least half these shares. Bottom line is that if I don't, i'll be overly exposed to my employer. I already rely on them for income.

Should I just start cost averaging out of existing assets and into bonds? Any advice? (FWIW, my IRA and Roth IRA (no new contributions allowed) are at Fidelity, my 401k is at Principal. I have some brokerage funds at Sharebuilder that I think I will transfer over to Fidelity soon (or possibly Merrill because I get free trades, etc, due to my BofA banking relationship)
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