After I'm done with asset allocation for my 401k, I move on to Roth IRA. I decide to max out the its contribution limit ($5,000 for year 2008) as well. Since I'm not limited to pick from a few costly but mediocre performing funds like in the case of my company 401k, and my 401k is really a conservative approach, I can afford to be more aggressive for my Roth IRA. I set the mix target via the following aggressive-conservative-conservative levels:
| 1st Level | Target | |
| U.S. Stocks | 50% | |
| Foreign Stocks | 40% | |
| Bonds/Cash/Others | 10% | |
| Total | 100% |
| 2nd level | Giant/Large | 80% |
| Mid | 20% | |
| Small/Micro | 0% | |
| Total | 100% |
| 3nd level_non foreign | Giant/Large | 60% |
| Mid | 20% | |
| Small/Micro | 0% | |
| Total | 80% |
Like my 401k, when I do my contribution allocation, I will follow the above target in the level-ordering fashion because I think the first level has most dominant power on my portfolio. To avoid things going wild, I have to hedge the risk involved in the second and third level significantly by allowing only 20% exposure to the mid/small caps.

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