401k Model Trades - March 2021

The FIRE Letter -

Editor's note: This article is public for paid and free subscribers.

Included in this issue of The FIRE Letter:

  • Introduction to The FIRE Letter for 401k Plan Participants
  • 401k Model and Benchmark YTD Returns
  • 401k Model Trades for March
  • Preview of March Articles

The FIRE Letter Introduction

Welcome to The FIRE Letter! This newsletter follows my investing models as part of my financial independence, retire early (FIRE) journey. Additionally, I provide personal finance, money saving tips, and other related articles.

I decided to add a 401k Model to this newsletter to provide updates to my fund holdings within my 401k account as well as establishing a documented track record of my trades and historical returns of my 401k model. I've already been doing this for my FIRE portfolios in two of my Roth IRA accounts.

I will provide the recommended trades that my 401k tactical asset allocation (TAA) model signals each month. I have been using this TAA model and other TAA models in my Roth IRA accounts for years as some of my coworkers know, so I thought to share them for educational and informational purposes.

This is short notice and I haven’t sent you any previous articles explaining how my TAA model works, so I’ll follow up with more information during this month.

Just a brief summary of why I developed my 401k TAA model - I wanted a mechanical (unemotional) system to follow that would match or beat the market over time, have equal or lower volatility than the market, and lower drawdowns than the market. You can follow as I put it to the test with the scrutiny of an audience.

401K Model and Benchmark YTD Returns

  • 401k Model YTD - Up 6.19%
  • Benchmark (S&P 500 Index) YTD - Up 1.71%

401k Model - March 2021 Trades

My 401k Model positions for March are listed below. I am following the Aggressive Growth Model in my account.

PPSF

401k Model Aggressive Growth - CIPSX Fund 100%

401k Model Moderate Growth - CIPSX Fund 67%, PTTRX Fund 33%

401k Model Conservative Growth - CIPSX Fund 33%, PTTRX Fund 67%

Generic 401k Plan

Generic 401k Model Aggressive Growth - Stock Fund 100%*

Generic 401k Model Moderate Growth - Stock Fund 67%, Bond Fund 33%*

Generic 401k Model Conservative Growth - Stock Fund 33%, Bond Fund 67%*

*The generic 401k model stock fund should be an S&P 500 index fund such as Vanguard’s VFINX or iShares’ WSFPX. The generic 401k model bond fund should be an aggregate bond index fund such as Vanguard’s VBMFX. Many 401k plans include an S&P 500 index fund and an aggregate bond index fund.

If you’re not sure which funds in your 401k plan you should use, include your company’s fund choices in an email and I’ll point out which ones are most similar to VFINX and VBMFX.

Looking Ahead

Expect articles about how my 401k model works, how a 401k plan fits into retirement planning, how to get the most out of your 401k plan, and asset allocation strategies for your 401k plan. I welcome any suggestions or requests.

Thanks for reading!

Take care,

Mike Bishop

Editor, The FIRE Letter

Disclaimer: All strategies including recommended trades published here are for educational and informational purposes only. They are not recommended for any specific individual, business, or other legal entity. I don’t know your age, income, personal or financial circumstances and cannot possibly suggest any financial or investing decisions for you. Seek advice from your accountant, financial advisor, and attorney before making any investing decisions. Always conduct your own due diligence before making any investing decisions. Seriously!