After I finally got my American Funds retirement rolled over to my T. Rowe Price 401(k), there have been a few more decisions to make. For starters, how do I distribute the money between assets? After I pick how many ways I want to split my retirement, then I have to pick what assets to acquire with the funds.

I’ve always been told that having four, solid holdings is a good way to go, at least initially. Any more and you’re spreading your money too thin, any less and you’re putting too much in one basket. Once you’ve got more money to play with, it may be wise to add a new holding every few years.

It goes without saying, though, that diversity is key!

T. Rowe Price makes it pretty easy. They give you a handful of securities to pick from, one of which is my company stock. On top of that, they offer target-date retirement funds in which you pick your retirement date and purchase the corresponding fund that matches that target date. Over time, the fund adjusts as your investment strategy changes.

So, here are my initial picks for my retirement account:

Columbia Acorn Fund Z (ACRNX) - This fund invests primarily in the stocks of small- and medium-size companies. The Fund generally invests in the stocks of companies with market capitalizations of less than $2 billion at the time of purchase. The Fund invests the majority of its assets in U.S. companies, but also may invest up to 33% of its assets in companies outside the U.S. in developed markets (for example, Japan, Canada and United Kingdom) and emerging markets (for example, Mexico, Brazil and Korea). This gives me international exposure, along with some smaller cap risk.

Equity Income Fund (PRFDX) - This is a large company stock fund with a current income orientation. Its goal is to provide substantial dividend income and also long-term capital appreciation. Holdings are concentrated in dividend-paying common stocks, particularly of established companies, with favorable prospects for both increasing dividends and capital appreciation. This fund involves less risk than a fund investing primarily in growth stocks that pay little or no dividends, but with less return potential. I’ve always liked dividend-paying companies, so this seems like a good fit for my investment strategy.

Retirement 2040 Fund (TRRDX) - I figure it will be about 30 years until I retire. If anything else, it will be 30 years before I can start drawing retirement. So the 2040 fund seems logical. It is has an emphasis on capital growth and income, allowing the assets to be a bit more aggressive. Over time, the emphasis will shift to capital preservation.

Company Stock - The company I work for has seen some incredible growth over the last few years. The stock has recently split 2:1, and we’re reporting record sales on the products we design and manufacture. We have nearly a Billion in cash and absolutely no debt. While it’s not a sure thing, it’s pretty darn close!

I’ll try to profile each of my holdings in a future post. If you have any comments, fire away!

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