AdmiralAdama wrote:I will check out all my loss-harvesting options and proceed along that line.
But you think the AA is okay, if a little aggressive?
And should I/can I switch the 401K/IRA investments immediately?
As a general rule, once you have made a decision, you should implement it immediately. At the very end of the year, you may want to time investments (by only a week or two) to avoid year-end distributions and other tax consequences.
Your 80/20 AA bothers me a lot. Even though it worked for me. I would suggest 60/40 or even 50/50. Here's why:
The Boglehead philosophy has evolved from active management doesn't work to invest in index funds to invest in the total market to invest in the total international market. The total global market is more bonds than stocks.
If you look at the Efficient Frontier graph, it says that 100% bonds has a certain risk (beta). As you add stocks, that risk decreases, up to about 20% stocks. When you get to 40% stocks, the risk is the same as 100% bonds, and the returns are substantially higher. Increasing stocks beyond that shows a diminishing reward/risk ratio.
If you accept the Boglehead tenets, that active management and market timing doe not work, etc., you are left with only two knobs: Your savings rate and your asset allocation. I think it is dangerous to trade these two against each other.
In other words, fix your AA at 60/40 and then save as much as you can.
There is one final knob, the date on which you can safely retire, but you won't know until you get there.