Updated My Pension Allocation for Diversification

Written by The Dividend Guy on August 25, 2008

Pension Plans

My employer pension plan is a large and increasingly growing part of my overall asset allocation. In fact, it will soon become one of the largest pieces of my portfolio. Each and every month my employer and I contribute to my pension plan through various funds. Over time I have adjusted the amount I invest in the fund choices available to manage my holdings to meet my target asset allocation goals. I have recently done just this and believe that it will further help to diversify my portfolio.

As my portfolio’s asset allocation is in line for the most part of where it should be, I am now in sort of a maintenance phase. I no longer need to direct all my pension money to one fund or another due to shortfalls in various areas. Instead, I can now simply buy pension funds across all my large asset allocation areas. Here are the funds I will now be buying on a regular basis:

1. Bond Index Fund
2. US Equity Index Fund
3. Canadian Equity Fund
4. International Equity Index Funds

These are the big parts of my overall portfolio. They make up the bulk of my portfolio. I still need to continue to add to my smaller asset classes as money comes in from other sources so that they do not get too far out of line. In addition, I will supplement my Canadian and US classes with dividend stocks as I identify quality stocks at excellent prices. However, the structure of a good portfolio is a consistently applied asset allocation and I believe that I am now set up for that.


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8 Comments so far

  1. Updated My Pension Allocation for Diversification | autocarsinsurance August 25, 2008 7:34 am

    […] Original post by The Dividend Guy […]

  2. MultifolDreamS August 25, 2008 8:46 pm

    I’m still not quite sure that I need to have bonds exposure when I have few decades of savings ahead of me. Mine has only 2,3 and 4.

  3. The Dividend Guy August 26, 2008 2:47 am

    Having bonds is all about risk reduction of your overall portfolio. It has been shown that one can early simlar returns to an all equity portfolio with less risk. I don’t have the results handy, but you can go to soundinvesting.com to check out their research.

    For me, it is all about reducing the risk. I am young but I also don’t want to be playing catchup for the next 25 years.

    TDG

  4. The Hoss August 27, 2008 11:10 am

    Looks like you have a good plan for your retirement. I can only tell you that when you do retire you will be glad you took the time to plan your future.

  5. Mad Morris August 29, 2008 1:15 pm

    Is your pension portfolio split equally among the 4 funds?

  6. Carnival of Personal Finance #168 - Fire Up the Grill, It’s Labor Day | One Caveman's Financial Journey September 1, 2008 6:36 am

    […] The Dividend Guy - Updated My Pension Allocation for Diversification […]

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    […] Updated My Pension Allocation for Diversification, The Dividend Guy reminds us the importance of reviewing and re-allocating our investments from […]

  8. BW September 1, 2008 6:43 pm

    That sounds like a good mix. I’m moving towards the portfolio that David Swensen (the Yale Endowment money manager) recommends for investors in his book Unconventional Success.

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