How to get started using Simple Allocation
Below is a high level summary of how to get started; details follow.
Using Simple Allocation is really that simple; just select an Allocation Plan, then check back each month/quarter to update your allocations to match the plan you are following.
The rest of this page has additional details regarding risk, appropriateness, our strategy, how taxes/fees affect returns, etc.
Is Simple Allocation appropriate for you?
Simple Allocation is designed for the experienced individual investor.
Understanding the Simple Allocation strategy
The Simple Allocation method assumes you want a fixed portfolio from which to allocate your investments. We call these fixed portfolios "allocation groups"; they are groups of securities from which investments get selected each month or quarter. Using allocation groups is a necessity in retirement plans (401A, 401K, etc.), where you only get to choose from the investment options you are given. Since each retirement plan has a different portfolio from which to choose, we model each retirement plan individually. Using a fixed portfolio from which to choose investments can also be desirable outside of a 401K, as you know your investments will be limited to only funds in the portfolio.
The Simple Allocation strategy is based on this assumption; you want to limit your investments to a select portfolio (or are limited by a retirement plan), and you have decided that this portfolio is suitable for you. Further, you have decided you want to actively trade the portfolio, and you want to use the Simple Allocation model to guide your allocation decisions.
Understand why there are both ETF/Mutual fund based allocation plans and retirement based allocation plans
We currently model two types of allocation plans: plans based on company's retirement plans, and plans based on a portfolio of ETFs, mutual funds, or a combination. All allocation plans are listed on the Simple Allocation Plans page.
The primary difference between the retirement based allocation plans and the ETF/mutual fund based plans is that the retirement based allocation plans are reallocated on the last trading day of each quarter, while the ETF/mutual fund based allocation plans are reallocated on the last trading day of each month. This is because retirement plans commonly have stipulations regarding frequent trading that don't allow you to reallocate more frequently than once a quarter. Please understand any restriction/limitations on trading frequency to which you are subject.
If you are looking to allocate your retirement plan, use the plan for your company. If we don't currently have an allocation plan for your company, please contact us to create an allocation plan for your company. (See the About Us page for contact information.) Also check with your plan provider and find out if they offer a "brokerage" option that allows you to trade your account like a standard investment account. This is becoming more common and gives you more flexibility in the allocation plans you can use
If you have a self directed IRA, or any other investment plan that allows you to freely choose which ETFs and mutual funds you would like to purchase, you can use an allocation plan from either group, as you are not restricted in what securities you purchase. Please look at the various plans and decide what is most appropriate for you. We have a summary of plan metrics on the Simple Allocation Plans page.
Allocating your investments
Once you have decided what type of plan to follow (ETF/Mutual fund based or retirement based plan), and a specific plan, following a Simple Allocation plan is, well, simple.
Following us on social networks
We won't send you email. You can follow us on one of our social network to get information for site users. We post the same information to Twitter, Google+, LinkedIn, and Facebook; so feel free to follow us using the network that suits you.
Note that you can check updates on our Google+ page without adding us to a circle; all updates are public.
Let us create an allocation plan for your retirement plan (401A, 401K, etc.)
See our page on adding allocation plans for information on how to have a Simple Allocation plan created for your company's retirement plan.