Comments on: How to Manage Your Asset Allocation With Multiple Accounts http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/ personal finance tips, tricks, and commentary Sat, 21 Nov 2009 22:11:52 -0500 http://wordpress.org/?v=abc hourly 1 By: Thankful http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/comment-page-1/#comment-126288 Thankful Wed, 29 Oct 2008 22:12:02 +0000 http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/#comment-126288 Little late to the party, but I love Morningstar's Instant Xray--I just found it a couple of weeks ago, and breaks down stocks and mutual funds across several accounts into one big, easy to understand allocation analysis. http://portfolio.morningstar.com/NewPort/Free/InstantXRayDEntry.aspx?dt=0.7055475 Little late to the party, but I love Morningstar’s Instant Xray–I just found it a couple of weeks ago, and breaks down stocks and mutual funds across several accounts into one big, easy to understand allocation analysis.

http://portfolio.morningstar.c.....=0.7055475

]]> By: Chris I. http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/comment-page-1/#comment-116175 Chris I. Fri, 28 Mar 2008 15:30:38 +0000 http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/#comment-116175 Hi Nickel, While your approach sounds promising for the reasons you mention, it seems that it might make it difficult to rebalance because you can't easily rebalance across accounts. A big benefit of asset allocation in my mind is that it gives you the opportunity to rebalance in times when one asset class does well and another does poorly, e.g. a year in which bonds have increased in value, but stocks have decreased in value. By rebalancing you are systematically buying low and selling high, one of the basic tenets of successful investing. When one of your retirement accounts exclusively holds one asset class while another exclusively holds another asset class, rebalancing becomes difficult because now you MUST look at all of your accounts in order to rebalance, presumably in a third account. In that sense, it seems like the work you've saved yourself by requiring fewer rebalancing transactions in a subset of the accounts has increased the amount of work you have to do (evaluating all of the accounts together) to determine what transactions need to be made. On the other hand, you are wise to allocate between your taxable and tax advantaged accounts to minimize your overall tax burden. Hi Nickel,

While your approach sounds promising for the reasons you mention, it seems that it might make it difficult to rebalance because you can’t easily rebalance across accounts. A big benefit of asset allocation in my mind is that it gives you the opportunity to rebalance in times when one asset class does well and another does poorly, e.g. a year in which bonds have increased in value, but stocks have decreased in value. By rebalancing you are systematically buying low and selling high, one of the basic tenets of successful investing.

When one of your retirement accounts exclusively holds one asset class while another exclusively holds another asset class, rebalancing becomes difficult because now you MUST look at all of your accounts in order to rebalance, presumably in a third account. In that sense, it seems like the work you’ve saved yourself by requiring fewer rebalancing transactions in a subset of the accounts has increased the amount of work you have to do (evaluating all of the accounts together) to determine what transactions need to be made.

On the other hand, you are wise to allocate between your taxable and tax advantaged accounts to minimize your overall tax burden.

]]> By: Eli http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/comment-page-1/#comment-116171 Eli Fri, 28 Mar 2008 02:02:13 +0000 http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/#comment-116171 This is a great way to allocate investment types. I've done it this way for a few years, but I ran into a small problem. I focused all my energy on the account with the largest holdings, and as such the others became stagnant. It's easy to lose sight of the smaller accounts, so you have to be very disciplined when you take this allocation approach. This is a great way to allocate investment types. I’ve done it this way for a few years, but I ran into a small problem. I focused all my energy on the account with the largest holdings, and as such the others became stagnant. It’s easy to lose sight of the smaller accounts, so you have to be very disciplined when you take this allocation approach.

]]> By: Kyle http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/comment-page-1/#comment-116165 Kyle Thu, 27 Mar 2008 14:46:20 +0000 http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/#comment-116165 The Diehards forum (http://www.diehards.org/) has a LOT of information on asset location most people have never thought of. I highly suggest every investor with serious money on the line frequent that forum. The beauty of tax-advantaged accounts is you can buy and sell as often as you want to get your asset allocation just how you want it without having to worry about taxes. The Diehards forum (http://www.diehards.org/) has a LOT of information on asset location most people have never thought of. I highly suggest every investor with serious money on the line frequent that forum. The beauty of tax-advantaged accounts is you can buy and sell as often as you want to get your asset allocation just how you want it without having to worry about taxes.

]]> By: nickel http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/comment-page-1/#comment-116164 nickel Thu, 27 Mar 2008 14:42:25 +0000 http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/#comment-116164 Chris: Quicken does the same thing (though I don't think it allows you to split up things like Target Retirement Funds into their component parts). But... Knowing the percentages isn't want I'm concerned about. I'm more concerned about managing them in the simplest and most tax efficient way possible. I don't want to have to tweak seven different accounts to keep things in line. Chris: Quicken does the same thing (though I don’t think it allows you to split up things like Target Retirement Funds into their component parts). But…

Knowing the percentages isn’t want I’m concerned about. I’m more concerned about managing them in the simplest and most tax efficient way possible. I don’t want to have to tweak seven different accounts to keep things in line.

]]> By: CJB http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/comment-page-1/#comment-116162 CJB Thu, 27 Mar 2008 13:33:19 +0000 http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/#comment-116162 I have been using Microsoft Money for about 10 years now and I think it is an excellent way to look at the "big picture" of your finance. I have about six different equity accounts (Etrade, Schwab, Ameritrade, 401k, etc) and Money puts them all together and shows me what my TOTAL allocation is. It does not matter if one account is all cash, and the other all stocks, it's my total allocation that I am be concerned with. Chris I have been using Microsoft Money for about 10 years now and I think it is an excellent way to look at the “big picture” of your finance. I have about six different equity accounts (Etrade, Schwab, Ameritrade, 401k, etc) and Money puts them all together and shows me what my TOTAL allocation is. It does not matter if one account is all cash, and the other all stocks, it’s my total allocation that I am be concerned with.

Chris

]]> By: Ryan http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/comment-page-1/#comment-116161 Ryan Thu, 27 Mar 2008 13:11:27 +0000 http://www.fivecentnickel.com/2008/03/27/how-to-manage-your-asset-allocation-with-multiple-accounts/#comment-116161 You could go over to the diehards forum and post your idea. There are some smart people there that will give perceptive tips. You could go over to the diehards forum and post your idea. There are some smart people there that will give perceptive tips.

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