I'm in Advanced Portfolio Modeling Mode 2. I have allocated overall targets of 10% cash, 70% stocks, and 20% bonds.
However, when I go to Review --> Tabular Projections --> Portfolio, I see:
cash 12.7% to 13.5%,
stocks - roughly 67.9%,
bonds at 19.3-ish %.
Not mightily off, but also not the allocated targets.
And in my tax-deferred account, which was set to 60% cash and 40% bonds, I see 56.8% stock, 34.4% bonds, and 8.8% cash. The cash shouldn't be there at all.
What is the most probable source of the error?
@tienchiu You raise 2 questions:
1) Why doesn't the portfolio's overall allocation match my overall targets?
This is a good question and I am surprised it has not come up before. Your portfolio includes the Cash account which maintains a sizeable amount of cash from year-to-year due to your cash floor and ceiling. You can see this on the Balance Sheet.
The Portfolio > Asset Allocation tab 'Overall' columns add in the asset class balances from all accounts, including the Cash, HSA and 529 Plan. Prior to July 2025, The
"Overall" totals excluded the Cash account, but a subscriber requested that the cash account be included, so it now includes all accounts.
As noted on the Mode 2 Portfolio Allocation page: "The HSA and 529 accounts are exempt from the Mode 2 allocation process and will always receive the asset allocation you specify below, regardless of your Overall Targets".
What it does not say is that the Cash account is also exempt from the Mode 2 allocation process....it always contains 100% cash. I will add a note on the page about that. This is why these 3 accounts (Cash, HSA and 529) are not shown on the Mode 2: Prioritization.
If you temporarily change your Cash Floor and Ceiling to $0, you will see that your overall portfolio allocation matches your Overall Targets exactly. So it is the Cash account (not included in the overall allocation process) that skews the portfolio total allocation some. It would be difficult or maybe not possible to factor in the Cash account's cash balance because it can vary widely during the year. If I did make a change to factor it in, I would have to use each year's starting cash balance.
UPDATE Dec 18, 11:30am ET: On the Portfolio Allocations tabular projection, I have added explanatory text and a checkbox to allow you to exclude the Cash, HSA and 529 accounts from the Overall totals. If you check this box, you will see that the allocations for the other accounts do match your Overall Targets. This change will be in the next release, probably tonight. I thank you for raising this question because the change it prompts will benefit all subscribers.
2) Why doesn't your tax-deferred account get its target allocation?
It is last in the allocation priority and gets whatever asset class balances are left after the other accounts are allocated. For more, see the user manual or More > Resources > FAQ:
| Q: When using Mode 2 of Advanced Portfolio Modeling, why are my accounts not getting their target allocations? A: When using Mode 2, accounts are not guaranteed to get their target asset allocation. Consider Mode 2 like a school cafeteria lunch operating first-come, first-served:
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