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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.