FTSE All-World ex-US Tracker GBP?

grey_gym_sock

DairyQueen wrote: »

I definitely need to invest more in the US but I am suspicious of the drivers supporting the current highs. I believe that every bit of optimism has been rung-out of the US market since Trump was elected. I'm no expert but investing a lump sum now doesn't feel 'right' and I would rather miss out on some gains than have a niggly feeling of unease. Last time I felt like this was was about 6/12 months before the dot.com crash post 2000. I sold out prior to the crash and missed some gains but still banked good profits (and I slept well at night).

i have some unease, too, but if stock markets crash, they are all likely to crash, and i wouldn't be surprised if the US were 1 of the more resilient markets in those circumstances.

though it does depend on the cause of the crash. if it happens because people finally decide that the FAANG stocks are over-valued, then that will hit the US market hard. but if it's GFC #2, it will hit various markets (including the US, but the FAANGs will probably do relatively well, since they are sitting on large cash piles).

limiting how much you invest in 1 market is 1 way to limit exposure to any bubble. another way is to include a bias to value shares (though it varies how well that works: it was very helpful in the tech bubble crash, but not helpful in the GFC crash).

I am neither greedy nor a high-risk investor. Moderation is the approach that suits me best. I don't feel comfy investing a single lump sum in the US market right now. I am 8 years from retirement and this will therefore be a relatively short-term investment. I think I will buy into the US market in tranches over the next year or so.

8 years is a bit short to be invested in shares. however, presumably you will keep holding a significant amount of shares after retirement. i wouldn't be buying many more shares if i planned to sell them again after about 8 years. so i'd think about where you want your portfolio to be after retirement, and not stray too far from that now.

pinkllama

Bankers Investment Trust - BNKR
It has about 30% of its portfolio in the US

Thrugelmir

Sally57 wrote: »

Which global income trust would be appropriate?

Fidelity offer such a fund. Where the US weighting is around 16% rather than 35%. There's a fair number of the top companies that pay no to minimal dividends, i.e. the tech stocks. One suspects because their cash piles are offshore out of reach of the US taxman. Instead relying on borrowed money to use share buybacks to boost EPS. Unsure as to the performance of the fund .

DairyQueen

darkidoe wrote: »

Ah ha!

This is one of the reasons I opted to build my own world tracker portfolio with the various Vanguard regional ETFs

Picking from:
USA
Japan
Asia/Pacific
Europe
Emerging Markets

I can then set the percentage allocation of the portfolio as I desire. I think the key mentality is not to time which market to invest in at a particular time but to fix the allocation right at the beginning of building your portfolio and then when there are imbalances, to rebalance the allocation back to its original allocation. That way you are taking advantage of the volatility of the markets to get better value ever so slightly.

And I get to do some homework to work out how each region does relatively to each other and perhaps learn something out of it. But looking at the graphs, it seems that the global economy is pretty much interwined and correlated anyhow.

I like the discipline your strategy imposes. Any idea which encourages me to keep my eye on the ball, and learn in the process, is definitely worth considering. I agree re: markets being intertwined to some degree but the performance of Vanguard's Global Ex-US ETF since the crash reveals the impact the US market has on the performance of most global funds. Like you, I would rather see at a glance how regions are performing and rebalance according to my own rules and instincts.

DairyQueen

grey_gym_sock wrote: »

8 years is a bit short to be invested in shares. however, presumably you will keep holding a significant amount of shares after retirement. i wouldn't be buying many more shares if i planned to sell them again after about 8 years. so i'd think about where you want your portfolio to be after retirement, and not stray too far from that now.

I am in that awkward investment phase (leading up to retirement) so I realise that I should protect the first tranche of income (to be drawn down within the first five years of retirement) now.

The plan is to drawdown tranche two in 12-20 years from now, and tranche three in 20+ years. Tranches two and three will therefore be more weighted toward equities as the timeline is longer.