Portfolio advice

nick1234

Hi

Just wanted to get some advice on my self managed portfolio which i have always kept quite simple.   With the recent volatility and over priced USA stocks it has made me think about the allocation and if holding such a large amount in Ftse All share/S+P tracker is diversified enough.   

I have about 10-15k to put into something else, i have considered less heavy US trackers like TDGB or VHYL or equal weighted MWEP.  Or continue with FWRG?   Or even add a multi asset fund like AJ Bell Adventurous? 

Currently portfolio approx split:

50% in FWRG (FTSE All World) 

15% in ETF’s covering EM, Latin America, EU and Pacfic.  The split i set as per outlook

20% EM trackers and a few individual country ETF like Vietnam/Turkey

10%  in single stocks+ IT’s.  Over the years this has been my best performance.  Eg aviva, Bank of Georgia, AUGM, JGGI, Alibaba, Barclays, 3i, CTPE etc

5% in active managed funds predominantly global small caps

Holding for long term eg 5-20 years.   I also have other riskier things like crypto, VCT, physical Gold which makes up 20% of total assets (exc home/pension).  

InvesterJones

So at the moment you're significantly overweight emerging markets (you have them in your all world, plus EM trackers and ETFs). If you think they will perform better than the rest of the investing world does then great, but it's not really adding diversification if that was your aim. With single stocks and other risky assets you are definitely on the higher risk side of things. When you made the decision to do that, were you happy with the thought of future volatility? And if so, what's changed now that you are experiencing exactly the expected volatility?

Linton

I am confused.  You talk about a large amount in FTSE AllShare and S&P 500 trackers   but your "current portfolio" shows neither.

In my view...

Your current portfolio is far more complex than it needs to be.  Investing significant amounts in say Vietnam or Turkey seems eccentric and investing small amounts pointless given you are also holding general trackers.

In my portfolio I have a general policy that holdings of less than 5% are not worth the management effort.  That would also rule out individual stocks.  You can cover the whole world in say 10 or fewer well chosen funds with sufficient flexibility to make your own choice of allocations to major country and company size. 

5-20 years is not long term.  5 years is short term, 10years medium term and 15-20 or more is long term. If you may be selling significant capital in 5 years time it would be sensible to derisk it now.

Why invest in something else - why not just put more into the investments you all ready hold?

nick1234

InvesterJones said:

So at the moment you're significantly overweight emerging markets (you have them in your all world, plus EM trackers and ETFs). If you think they will perform better than the rest of the investing world does then great, but it's not really adding diversification if that was your aim. With single stocks and other risky assets you are definitely on the higher risk side of things. When you made the decision to do that, were you happy with the thought of future volatility? And if so, what's changed now that you are experiencing exactly the expected volatility?

Thanks yes true i am overweight EM as originally saw them as better growth potential but this hasn’t translated to better market performance over the last 10-20yrs versus developed countries.  And i  have a risky portfolio which i was happy with given my time horizon being 20yr + i can go without touching this.   

nick1234

Linton said:

I am confused.  You talk about a large amount in FTSE AllShare and S&P 500 trackers   but your "current portfolio" shows neither.

In my view...

Your current portfolio is far more complex than it needs to be.  Investing significant amounts in say Vietnam or Turkey seems eccentric and investing small amounts pointless given you are also holding general trackers.

In my portfolio I have a general policy that holdings of less than 5% are not worth the management effort.  That would also rule out individual stocks.  You can cover the whole world in say 10 or fewer well chosen funds with sufficient flexibility to make your own choice of allocations to major country and company size. 

5-20 years is not long term.  5 years is short term, 10years medium term and 15-20 or more is long term. If you may be selling significant capital in 5 years time it would be sensible to derisk it now.

Why invest in something else - why not just put more into the investments you all ready hold?

Thanks you are right i assumed 50% being in an all world tracker being a large percentage of the developed world and thus US.   Do you think something like TDGB or VHYL which is global but less US heavy would be a good hedge as it doesnt hold the large tech firms?  

Otherwise i will add to FWRG - all world.  I realise the portfolio has become slightly complex but its just due to stocks i have historically bought and have all gone 100%+ much more than my ETF’s.  I am slowly selling down these and the single country ETF’s

My time horizon is longer i don’t need this cash for at least 10 years or longer based on current situation

Linton

nick1234 said:

Linton said:

I am confused.  You talk about a large amount in FTSE AllShare and S&P 500 trackers   but your "current portfolio" shows neither.

In my view...

Your current portfolio is far more complex than it needs to be.  Investing significant amounts in say Vietnam or Turkey seems eccentric and investing small amounts pointless given you are also holding general trackers.

In my portfolio I have a general policy that holdings of less than 5% are not worth the management effort.  That would also rule out individual stocks.  You can cover the whole world in say 10 or fewer well chosen funds with sufficient flexibility to make your own choice of allocations to major country and company size. 

5-20 years is not long term.  5 years is short term, 10years medium term and 15-20 or more is long term. If you may be selling significant capital in 5 years time it would be sensible to derisk it now.

Why invest in something else - why not just put more into the investments you all ready hold?

Thanks you are right i assumed 50% being in an all world tracker being a large percentage of the developed world and thus US.   Do you think something like TDGB or VHYL which is global but less US heavy would be a good hedge as it doesnt hold the large tech firms?  

Otherwise i will add to FWRG - all world.  I realise the portfolio has become slightly complex but its just due to stocks i have historically bought and have all gone 100%+ much more than my ETF’s.  I am slowly selling down these and the single country ETF’s

My time horizon is longer i don’t need this cash for at least 10 years or longer based on current situation

The US is about 65% of a typical global tracker.  But if the tracker is only 50% of your portfolio that puts yuour US at 32% which is unusually low.  I aim for 40% US though currently its down to about 36%.

Eyeful

1. If you want financial advice you go and see an IFA or FA. Here you will get guidance & opinion.

2. You are happy to buy single shares, crypto, VCT, physical Gold, all which puts you into the high risk category but then you voice concern about the volatility of the USA stock market and think of diversifying. 

3.  Most active fund managers after charges & fees cannot match a simple Global Market Index like the  FTSE All-World Index.
 So I think you will not beat that index either.

4. Considered simplifying your portfolio to FWRG and hold up to 10% for play money to gamble on the other stuff. 

5. If such a simple portfolio is too tame for you, then consider using one of the well know portfolios shown here: 
https://portfoliocharts.com/

Hoenir

nick1234 said:

Holding for long term eg 5-20 years.   

0-5 is short. 5 -15 to medium. 15 plus is long term. 

Investing should be viewed as a marathon not a sprint. 

IanManc

Eyeful said:

1. If you want financial advice you go and see an IFA or FA. Here you will get guidance & opinion.

If you want financial advice, guidance and opinion, see an IFA.

If you want to be sold products from an organisation that someone is linked to and getting paid by, see an FA.

chiang_mai

Linton said:

nick1234 said:

Linton said:

I am confused.  You talk about a large amount in FTSE AllShare and S&P 500 trackers   but your "current portfolio" shows neither.

In my view...

Your current portfolio is far more complex than it needs to be.  Investing significant amounts in say Vietnam or Turkey seems eccentric and investing small amounts pointless given you are also holding general trackers.

In my portfolio I have a general policy that holdings of less than 5% are not worth the management effort.  That would also rule out individual stocks.  You can cover the whole world in say 10 or fewer well chosen funds with sufficient flexibility to make your own choice of allocations to major country and company size. 

5-20 years is not long term.  5 years is short term, 10years medium term and 15-20 or more is long term. If you may be selling significant capital in 5 years time it would be sensible to derisk it now.

Why invest in something else - why not just put more into the investments you all ready hold?

Thanks you are right i assumed 50% being in an all world tracker being a large percentage of the developed world and thus US.   Do you think something like TDGB or VHYL which is global but less US heavy would be a good hedge as it doesnt hold the large tech firms?  

Otherwise i will add to FWRG - all world.  I realise the portfolio has become slightly complex but its just due to stocks i have historically bought and have all gone 100%+ much more than my ETF’s.  I am slowly selling down these and the single country ETF’s

My time horizon is longer i don’t need this cash for at least 10 years or longer based on current situation

The US is about 65% of a typical global tracker.  But if the tracker is only 50% of your portfolio that puts yuour US at 32% which is unusually low.  I aim for 40% US though currently its down to about 36%.

I suggest these are unusual times. I have reduced my US equities holdings from 50%, down to 25%, which is 15% of my total portfolio, on par with my EU holdings. Even experienced professionals appear to be struggling with asset allocation at present it must be nightmarish for a beginner. 

Linton

chiang_mai said:

Linton said:

nick1234 said:

Linton said:

I am confused.  You talk about a large amount in FTSE AllShare and S&P 500 trackers   but your "current portfolio" shows neither.

In my view...

Your current portfolio is far more complex than it needs to be.  Investing significant amounts in say Vietnam or Turkey seems eccentric and investing small amounts pointless given you are also holding general trackers.

In my portfolio I have a general policy that holdings of less than 5% are not worth the management effort.  That would also rule out individual stocks.  You can cover the whole world in say 10 or fewer well chosen funds with sufficient flexibility to make your own choice of allocations to major country and company size. 

5-20 years is not long term.  5 years is short term, 10years medium term and 15-20 or more is long term. If you may be selling significant capital in 5 years time it would be sensible to derisk it now.

Why invest in something else - why not just put more into the investments you all ready hold?

Thanks you are right i assumed 50% being in an all world tracker being a large percentage of the developed world and thus US.   Do you think something like TDGB or VHYL which is global but less US heavy would be a good hedge as it doesnt hold the large tech firms?  

Otherwise i will add to FWRG - all world.  I realise the portfolio has become slightly complex but its just due to stocks i have historically bought and have all gone 100%+ much more than my ETF’s.  I am slowly selling down these and the single country ETF’s

My time horizon is longer i don’t need this cash for at least 10 years or longer based on current situation

The US is about 65% of a typical global tracker.  But if the tracker is only 50% of your portfolio that puts yuour US at 32% which is unusually low.  I aim for 40% US though currently its down to about 36%.

I suggest these are unusual times. I have reduced my US equities holdings from 50%, down to 25%, which is 15% of my total portfolio, on par with my EU holdings. Even experienced professionals appear to be struggling with asset allocation at present it must be nightmarish for a beginner. 

I believe asset allocation is for the long term and one should not adjust it to deal with short term events.  Cutting US now is buying high and selling low which is not a recommended strategy.