This Week’s Make-Over

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* Subject: Rich Neel, 26

* Annual income: $65,000 to $70,000

* Goals: Improve investment performance, provide for a comfortable retirement and eventually buy a home

Current Portfolio

* Retirement account: $45,000 in a 401(k) plan, divided evenly between company stock and a money market fund

* Mutual funds: $4,500 ($4,000 in Oakmark Select and $1,500 in Meridian Value)

* Stocks: $1,200, divided between Cisco Systems and Sun Microsystems

* Debts: None



* Diversify 401(k) by putting 30% in the plan’s stable value fund, 30% in the large-company index fund, 20% in the small-company index fund, 10% in the international index fund and 10% in company stock.


* Sell mutual funds and stocks and reinvest the proceeds in less volatile investments. If buying a house within three years, invest in short-term fixed-income securities only. Otherwise, split the money between a short-term bond fund and a balanced stock and bonds fund.

* Boost emergency fund to at least $3,000.


Meet the Planner

Margie Mullen is a fee-only certified financial planner with Mullen Advisory in Los Angeles. She specializes in retirement planning and portfolio management.