Personal Investments • Investment Buckets, Rebalancing & Dollar Cost Averaging - The Basics

Hello! Thanks for checking out my post. I'm seeking some basic guidance on investing and rebalancing a portfolio.

After working with a financial advisor for years and learning a lot from this site and various books, I've decided to self-manage my investments. I'm planning to use the 4-index fund approach: total stock market, total international market, total bond market, and total international bond market.

Here are my available amounts for investing (rounded for simplicity):

- Brokerage Account: $400k
- 401k: $220k
- Roth IRA: $110k
- Traditional IRA: $60k

My questions are:

- To maximize compound interest, I plan to invest in one fund per account, as the amounts mostly align with my intended allocations. Is this the best approach, or should I invest in all 4 index funds within each account?
- If I go with one index fund per account, I'm unsure how to handle rebalancing. For instance, if I need to buy $10k in the Roth IRA but don't have that in cash, how should I proceed? Should I keep a small cash reserve in each account for rebalancing?
- What are your thoughts on dollar cost averaging, and over what time period should I invest these funds?

Thanks for the advice!

Statistics: Posted by lrigiks — Thu May 30, 2024 3:42 pm — Replies 0 — Views 28

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