Investment Portfolio Sense Check

lonewolf123

Hi,

I'm trying to build a balanced global investment portfolio that hits all the big global players in all different sectors in an attempt to just keep investing into this portfolio till retirement and get a good return out it.

I'm specifically looking at 100% equity, nothing in bonds or gilts just yet due to the relatively long timeline I have so willing to take on that extra risk and use time to ride it out.

Below I have attached a snapshot of my attempt in achieving this and I welcome and appreciate greatly any comments all you guys might have on this.

Holding for a particular region too high / low? Holding for a particular sector too high / low? My coverage elsewhere isn't good enough?

Please let me know and do comment on anything.

Many thanks all.

Linton

It looks like a well diversified global portfolio. Everything is covered, all geography or industry sector allocations are reasonable and nothing predominates, the largest underlying holding is less than 1%. It is fine. One could discuss individual %s in a band of perhaps + or - 5% but that is a minor detail and very much personal preference.

Alexland

Why not just buy the low cost HSBC FTSE All World index fund?

lonewolf123

Alexland wrote: »

Why not just buy the low cost HSBC FTSE All World index fund?

Because I'm 99% certain it doesn't give you this more balanced unbiased weighting in that one fund alone.

Alexland

lonewolf123 wrote: »

Because I'm 99% certain it doesn't give you this more balanced unbiased weighting in that one fund alone.

It will give you most of it, maybe with a small cap if you really think it's worth it.

Alex

lonewolf123

Alexland wrote: »

It will give you most of it, maybe with a small cap if you really think it's worth it.

Of course, I agree with you and a global fund makes up a good portion of my current investment.

I was just highlighting how it's difficult to find and invest in one fund that gives coverage to what is deemed "balanced and diversified" therefore I have added a couple more funds to give it a more rounded balance.

Thrugelmir

Many fund managers are sitting on cash currently as view larger companies as offering little value. A good portfolio should be well diversified across different sectors. The extra risks you are exposing yourself to at the moment. Is whether Trump and Xi can broker an agreement, and whether the USA economy is losing impetus as Trump's one off tax stimulus peters outs.

Alexland

lonewolf123 wrote: »

I was just highlighting how it's difficult to find and invest in one fund that gives coverage to what is deemed "balanced and diversified" therefore I have added a couple more funds to give it a more rounded balance.

I'm unconvinced there is any clear advantage to trying to make the tables look neater over a market cap lead approach. For example if they came up with a new analysis method that merged the consumer cyclical with consumer defensive sectors would you then decide your investments were overweight in the consumer sector?

Although I am not 100% equities (given where we are in the market cycle) my view is that the HSBC fund does the job at a very low cost with no messing around so that's where my equities money is invested.

Alex

lonewolf123

Thrugelmir wrote: »

Many fund managers are sitting on cash currently as view larger companies as offering little value. A good portfolio should be well diversified across different sectors. The extra risks you are exposing yourself to at the moment. Is whether Trump and Xi can broker an agreement, and whether the USA economy is losing impetus as Trump's one off tax stimulus peters outs.

Yes those are definitely risks that you mentioned and risks everyone should consider.

Call me by the book but I suppose you can turn that round and argue using the old saying "Time in the market and not timing the market"?

But very interesting that many fund managers are just holding onto cash right now but hopefully like I mentioned because I still have a good amount of time in the investments playing field before I plan to do anything with the money, hopefully time can ride any ups and downs and give a stable return.

On that note, when you mentioned "A good portfolio should be well diversified across different sectors." Do you have any comments on my portfolio diversity and balancing?

Many thanks

lonewolf123

Alexland wrote: »

I'm unconvinced there is any clear advantage to trying to make the tables look neater over a market cap lead approach. For example if they came up with a new analysis method that merged the consumer cyclical with consumer defensive sectors would you then decide your investments were overweight in the consumer sector?

Although I am not 100% equities (given where we are in the market cycle) my view is that the HSBC fund does the job at a very low cost with no messing around so that's where my equities money is invested.

Alex

I mean stock sector allocation I completely agree with you, they can mess around with the numbers and jumble things around for presentation and there is little benefit for the average investor to try and get a good split between everything.

What I was more concerned about with your comment on just one fund was the fact that close to 60% of your holding will be in the US compared to my 40% if you buy that one HSBC fund.

Now everyone is different and 60% in the US to you may seem balanced but for me that is just too high and you kinda disregard the Euro and Pacific markets a little especially if trying to reduce risk by building a global balanced portfolio.

Alexland

lonewolf123 wrote: »

Call me by the book but I suppose you can turn that round and argue using the old saying "Time in the market and not timing the market"?

Sure you need to go to the party and get invested taking an appropriate level of risk but it takes some judgement on how the party's going before you strip off and start singing Bon Jovi to everyone. Sometimes it's totally appropriate and at other times you hold back a bit. You can still have a good time without losing your skin.

On the other point remember that US companies are very successful and operate globally.

Alex