Last month we introduced Bruce, a forty-something investor with a balanced portfolio (tilted towards equities).

Bruce spent the last three weeks of August on vacation and tuned out the noise in the markets as best he could. The single malt helped. While catching up on his reading this week, however, he came across two pieces by Tom which encouraged him to make an adjustment to his portfolio (What Now? Part II and When Fear Rules the Market, it’s Time to Say ‘Buy’).

Upon reflection, he decided to reduce his position in the Income Fund by 5% (of his overall portfolio’s value) and invest the proceeds in our equity funds.

Recall that Bruce’s portfolio at the beginning of the year was broken down as follows:

  • Savings Fund - 10%
  • Income Fund - 30%
  • Equity Fund - 24%
  • Global Equity Fund - 24%
  • Small-Cap Equity Fund - 12%

As at August 31st, his fund mix was:

  • Savings Fund - 10.1%
  • Income Fund – 31.4%
  • Equity Fund – 24.0%
  • Global Equity Fund - 21.9%
  • Small-Cap Equity Fund - 12.6%

Even though his current mix hadn’t drifted significantly from his strategic asset mix (SAM), he felt it was a good time to take some profits out of bonds (Income Fund) and add to stocks. Sticking with our suggestion, he trimmed 5% from the Income Fund. Straying somewhat from our advice, however, he added 2.5% to the Equity Fund and 2.5% to the Small-Cap Fund. He understands the Global Fund’s role in his portfolio’s diversification, but has a sour taste for anything Europe and didn’t add to the fund.

With his portfolio now tended to, Bruce can focus his energy on finding an excuse to get out of the Keith Urban concert his wife’s trying to drag him to at the end of the month.