Asset Allocation

When I got married last year, one of the inevitable chores was consolidating financial accounts. As it turns out, my wife and I have similar approaches to budgeting and saving, so our discussions about family spending was relatively easy. However, the shear number of accounts that the two of us held required a good bit of shuffling and closing. We each held checking accounts with both online banks and local banks, primarily in order to have a non-zero interest rate while still retaining access to local ATMs. In addition, because of vagaries with our employers, together we had close to 10 retirement accounts.

After working through the relatively easy task of choosing which bank accounts to keep and which to merge, I was left looking at the bulk of our retirement savings (which was not a lot of money itself, just a lot of accounts) and wondering how to have a coherent management approach.

So after doing some reading, I finally figured out that what I was working on was Asset Allocation. There is no shortage of information, ranging from short definitions and somewhat abstract explanations to straight-forward steps. The best overall description probably comes from the Bogleheads site.

I checked out a few books from the library and found Larry Swedloe’s book on investment strategy to be rather informative. That book was one of the primary ones that convinced me to actually put some thought into which stocks and mutual funds we were choosing as investments with our limited retirement savings.

I found a series of posts from the blog, My Money Blog, to be extremely helpful. Ultimately, I decided to get out of the stock-picking game and move completely to passive investing when our savings went into a number of index funds, rather than actively-managed mutual funds. I wish I could go back to the 25-year self and tell him to stop thinking he was smarter than the rest of the people picking stocks and just invest in index funds instead. Even with the low market returns from the past decade, I think I would still come out better with indexing than picking.

The first decision was how much of the portfolio should go to bonds vs. stocks. I ended up going with 30% bonds, but in hindsight, I’m beginning to think that might be a bit too conservative, given the fact that I’m 36 and my wife is a good bit younger. In any event, here’s how our allocation looks.allocation.png

The two smaller wedges are for commodities and real estate. In our retirement accounts, we have access to a fund that invests in real estate as well as an ETF for commodities. And based on the theory of using different asset classes to reduce risk, I decided to stick 5% in both.

More later about applying a comprehensive portfolio allocation among all of our retirement accounts. I’m a numbers junkie and getting to mess around with Excel has been fun. it’s not like we’re Bill Gates and shifting millions of dollars around, but with our employers contributing to our retirement, we need to make wise decisions about how to plan for our eventual hazy days of retirement!

(I’m writing this post largely because I’ve gained so much knowledge from many of the financial bloggers out there. I wanted to contribute a small bit of feedback.)

One Year Later

A year ago, Pasadena and the surrounding communities were layered in smoke and ashes as the huge Station Fire burned acres upon acres.

Fire above JPL

The Station Fire in the hills behind the Jet Propulsion Laboratory. Photo by Bill Westphal.

One year ago, this is what the hills above my workplace looked like.

Even though I lived through it, it’s still hard to believe such a monster fire was so close.

The D-Day Piper

I just read an interesting story, an obituary of Bill Millin, who played the bagpipes during the D-Day landing in Normandy.

Millin began his apparently suicidal serenade immediately upon jumping from the ramp of the landing craft into the icy water. As the Cameron tartan of his kilt floated to the surface he struck up with Hieland Laddie. He continued even as the man behind him was hit, dropped into the sea and sank.

Millin was surprised not to have been shot, and he mentioned this to some Germans who had been taken prisoner.
They said that they had not shot at him because they thought he had gone off his head.

Rest in peace.

New Tellico Version

I put together a new version of Tellico, version 2.3, and threw it out for release this past weekend. It is dedicated to my lovely wife, Kim, and we could code-name it, Hot Vegas!

The previous release was back in February, so this one has quite a few bug fixes and some new features. Freebase was added as a data source, which is rather useful. Freebase has tons of info available, and is constantly being updated. It even has some limited comic book information, too.

I messed up some of the links on the download page, so embarrassingly enough, for a few days after the release, the links were broken. Those should all be fixed now!

I also jumped off the deep end and downloaded Choqok and registered on identi.ca which is something like the open source version of Twitter. Much less popular, so by definition, much cooler! Software nerds use it a good bit, I’ve heard. Anyways, I took the handle stephero. (Strike that, since changed to AstroRobby for uniformity with Twitter.)

One of the primary features I’d like to work on for the next version of Tellico is better statistics. I’m looking forward to working with the KDE plot widgets.

Hubble's Gotchu!

How have I not seen this before? Jimmy Fallon has a recurring sketch by a guy who loves the Hubble Space Telescope. Bashir Salahuddin, a.k.a. “Milky J”, raps about Hubble’s great images.

And Goddard actually invited the Jimmy Fallon crew to come in and see the information about the James Webb Space Telescope. Sheer awesomeness!

Check out all the details of the visit and previous videos from Jimmy Fallon over at
Geeked on Goddard.

Tim Donaghy is Watching the Watchmen

Deadspin is having Tim Donaghy, a former NBA ref who served time for gambling on games, give critiques of the referees for the NBA Finals. See his reviews of game 1 and game 2.

I think this is great. The NBA has the worst officiating of any sport in the world. Inconsistency, allowances for “star” players, home crowd influence, and so on. It drives me insane sometimes. If a game were called consistently, you’d either have no fouls or 100 fouls. Players are constantly pushing on each other and then they get called for a foul when they hand-check? What?