Take a peek at my hand?

Update #3. Quarter 3, 2015.

Faced with a choice. Should I keep posting here, airing my dirty investment laundry in public? I decided yes, but changed the title. Maybe I'll learn something. Maybe someone else will learn something - even if it is simply "don't buy Greek ETFs" (who would have thought, eh)

Three things have happened to my portfolio this month.

First, I sold a share: My holding in Spanish engineering company Gamesa had outgrown its place in the portfolio, so I took some papas fritas off the table.

Secondly, I reinvested those chips plus some more in my catch-all of choice, Vanguard's World Stock Index ETF. My target is for this to make up 30% of my portfolio.

Thirdly, and you can slap me with a fish for this, I just bought shares in Volkswagen. I did no research, I had no plan. It was a punt good and proper.

My Top 10 holdings are now:

1) 28% Vanguard FTSE All World ETF
2) 19% Cash
3) 9% Lyxor ETF Commodities
4) 7% Aluminium ETF
5) 6% Tesco PLC
6) 4% ISHARES FTSE BRIC 50
7) 4% SAINSBURY(J)
8) 4% GLOBAL X FUNDS GREECE 20 ETF
9) 3% ETF - Brent Oil 1 month USD
10) 3% Electricite De France

It has been a quarter of falling prices & the bottom line has taken a pummelling. But overall, events have brought me quite close to my target asset allocation. Which is now cash 19%; commodities 20%; world stock market tracker 28%; other equities 33%. To answer Bowlhead99's question, how many moves did it take to get there... Nine. Seven buys, two sells.

Sitting within a shout of target asset allocation, how do I feel? Unsure. Maybe I'm wrong about commodities. The reason I included them was because they seemed low in value and I thought might offer some protection against unexpected inflation. Clearly it was wrong-headed to think I could identify when commodities were cheap (my oil, aluminium ETFs are now down 30%). But was I wrong to think that they might offer some protection against inflation? What else might I consider to do this?

I have come up with another "rule" to protect me from giving in to this sort of thinking while commodity prices are low, for example. The rule is: when tinkering with target asset allocation, wait a full year before doing anything.

So my full ruleset is now:

1) Target asset allocation: 20% cash, 20% commodities, 30% Global equity ETF, 30% other equities.
2) At most three trades per quarter: 2 buy + 1 sell.
3) Rebalance once per year on 31st March.
4) Don't sell stuff at a loss. Wait.
5) If thinking of changing asset allocation, hold that thought for a year before acting.

Regards, RB

Grey Gym Sock and Linton, thanks for your feedback. A lot of that makes sense. GGS I agree with your comment about needing some sort of plan for equities outside of a global tracker. Although my overall approach is now only 30-50% random, it was 100% random until last year! Room for improvement, absolutely.

Commodities... back in 2009, share prices were in freefall but the price of gold kept on rising. Interested in this, I came across a link described as "a permament portfolio" - something "for all seasons" - It was 25% stocks, 25% cash, 25% bonds, 25% gold. The historical performance of this was good - almost as good as anything else including 100% equity. But the volatility was less. There were fewer great years and there were fewer terrible years. That is the kind of thing I'm chasing. ETFs may not be a perfect way to do it but I certainly don't want to buy anything real, wet or shiny (what would the wife say). All I can do at this stage is watch and learn, with skin in the game. No meddling for one year.

Bonds... I just don't see the advantage over cash for a small ISA investor like me. Except, I'm interested in TIPS & if I move away from commodities at any stage, it may be towards TIPS.