I’ve retired and become more conservative with my portfolio. This month I received my Morningstar portfolio report and it shows me lagging about 95% of mutual funds. I’m not sure what benchmark the report is using, and every month I just ignore it. My question is, “is there a way to set up a more appropriate benchmark for the monthly report?”
I’m 100% invested with Vanguard and have large holdings in Vanguard Wellesley, Target Retirement 2020, and a variety of index funds (500, Mid-Cap, Small-Cap, Total Bond, etc.) in our IRA’s. Almost all of my funds are 4 or 5 stars. I’m about 46% stocks, 38% Bonds and 16% cash equivalents. This is the lowest stock allocation I’ve ever had, and I’ve worked on lowering it this past year following my recent retirement. Now I sort of feel like I’m missing the party, but maybe I shouldn’t be concerned. I was about 70% stocks.
My goal is to hang on to what I’ve got with some potential for growth. I’m not taking any distributions yet as pensions, SS and some small part time work gigs meet our needs. Should I just ignore the monthly report that I’m lagging behind? Thoughts and opinions?
Looks like an asset allocation you are comfortable with. I'm not a lot different 40stock/45bond-FI/15cash, there is no precise benchmark. Something like the S&P500 will out perform and under perform at different times. I would just ignore other benchmark information, it isn't your AA. What are you going to change Wellington? VG 2020? Looks like you are going to let it ride (appropriate to your AA).
I benchmark VG VBIAX (60/40 blend) but that is just reference info, if I don't match it I don't worry. I do expect to 'about' equal that fund but would have to have a large deviation to dig into my portfolio to consider changes.
I’am in the ignore camp. You don’t plan on chasing results your whole retirement do you? You’ve achieved your more conservative goal of less risk with possibility of growth. Putting everything on dividend reinvestment will add even more growth. Over 50% of our portfolio, bonds, stocks and funds are on reinvestment and our portfolio balance is still increasing. Don’t care about any comparisons or allocations with that setup. Just remember the bull market won’t last forever. Then you can be thankful your balance isn’t decreasing as much as others which is what you want.