Portfolio advice

InvesterJones

nick1234 said:

 And i  have a risky portfolio which i was happy with given my time horizon being 20yr + i can go without touching this.   

But in your original post you say the recent volatility has made you think about your portfolio. Which is it?

chiang_mai

Linton said:

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.

Investing rules change with age and I think this might be one of them, What you say makes complete sense when there is still decades  left to run on the investing time horizon, but less so for investors aged over, say 70 years. The ratio of equites in a portfolio is meant to reduce with age, I think that the usefulness of index trackers also reduces. Simply put, if there is no time for recovery, the advantages of these things is minimised,  The case for maintaining a stable asset allocation, throughout an extended geopolitical downturn, just for the sake of it, fits into this same classification....I think.

bobfredbob

I think you have far too much EM.

Personally, I'd sell the 35% EM and buy some tech tracker (such as Nasdaq EQSG).  I have the L&G Global Tech.  Just be careful since a lot of "tech trackers" don't track companies that you may think of as tech, such as Google (aka Alphabet).  Of course, if Trump's 25% tariff on Apple occurs then tech may be a bad choice.

I have a world tracker.  The problem I think they have is that if one region is down then it drags the whole thing down.  Having separate S&P 500 (US), Europe, and Asia trackers may mean that when you need cash you can sell the one that is doing well at a higher price than you would've been able to see a combined world tracker.

Monevator had an article on building your own world tracker for cheaper than the all-in-one World tracker you may have.

What to do with the 10k would depend on what percentage that is of your investable money.

I find the website justetf.com useful since it allows you to easily compare fees and has graphs and heat maps of the performance over the months and years, and details of how big a fall they have had.  I've been looking at it a lot recently to see where to invest some money.

It also allows easy sorting by "how much have people invested in this ETF" and "what is the lowest ongoing cost."  I find it far easier than most other sites.

There are also some "portfolio testers" on the web that allow you to see how various portfolios would've worked out over long periods.

Now is a perfect time to look at ETFs that hint at their master market-beating strategy and check out the graphs of their performance for "year to date" and see how they fared.  I tend to click on the "add ETF for comparison" and then see how things fared against S&P 500 (the main US stock market benchmark), and FTSE All World.  Zoom out to 3-years, 5-years, and max-years and see how they fare against each other over the recent crises. 

They almost all fail to beat the S&P 500...by a lot.

NY Times today had an article about how Europe and US used to be the same economic size a decade-or-so ago.  Now Europe is apparently a third of the size of the US.  Europe, it seems, never really recovered from the 2008 crash.

With your 10/15k, I'd consider either S&P 500, or continue with a World, or Developed World, or roll-your-own World (depending on transaction fees).  I'd also buy Tech because I remember when people used to say Apple was over-valued at 500 billion...and 750...and how it would never hit a trillion and the stock market will crash.  Now it's almost three trillion.

My feeling is that if the US stock market falls, many trackers are heavy US anyway so they'll be heavily hit, and experience suggests the world will take longer to recover than the US.

Just don't blame us when your 35% EM would've outperformed all of our crashed portfolios.

dunstonh

Now is a perfect time to look at ETFs that hint at their master market-beating strategy and check out the graphs of their performance for "year to date" and see how they fared.  I tend to click on the "add ETF for comparison" and then see how things fared against S&P 500 (the main US stock market benchmark), and FTSE All World.  Zoom out to 3-years, 5-years, and max-years and see how they fare against each other over the recent crises. 

They almost all fail to beat the S&P 500...by a lot.

You are relying on recency bias.

In a cycle when US equities has been best, then by default, US equities will be best. 
However, what about cycles when global excluding US is best?

Historically, Global ex US vs US cycle with each other as to which is best.    

NY Times today had an article about how Europe and US used to be the same economic size a decade-or-so ago.  Now Europe is apparently a third of the size of the US.  Europe, it seems, never really recovered from the 2008 crash.
Going by GDP measured in USD, that is correct.   However, it's a flawed argument as it overlooks the fact that EU GDP (measured in USD) was one-third smaller than US GDP in 2000 but grew to be bigger than US by 2008.

The failure of the NYT article was they failed to take into account exchange rates.   Europe didn't become bigger than the US over 2000-2008 and didn't suffer over 2008-2022.  If you measure something in USD then its going to be impacted by exchange rates.    In 2000,  1 Euro was $0.92.   In 2008 is was $1.47.    Over 2008 to 2022, it cycled back again.     A very normal cycle that occurs time and again historically (with legacy currencies pre Euro).

You need to go back generations.   Not 3 or 5 years.     Is this the point where the global ex US becomes better than US?   It may be, it may not be but it will happen if it already hasn't started. 

Linton

chiang_mai said:

Linton said:

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.

Investing rules change with age and I think this might be one of them, What you say makes complete sense when there is still decades  left to run on the investing time horizon, but less so for investors aged over, say 70 years. The ratio of equites in a portfolio is meant to reduce with age, I think that the usefulness of index trackers also reduces. Simply put, if there is no time for recovery, the advantages of these things is minimised,  The case for maintaining a stable asset allocation, throughout an extended geopolitical downturn, just for the sake of it, fits into this same classification....I think.

i dont think age changes the rules of investing.  It may change the overall asset allocations as your future needs change, but at whatever age you are (and I am sadly well over 70), modifying your allocations in response to short term events is unlikely to be beneficial overall.  If Trump is causing you palpitations then you were poorly invested in the first place.

There is no "meant to" about decreasing equity with age.  There may be a need to but that is a different matter. Though in our case the success of the short/medium term strategy has made any change to the long term allocations unnecessary.  

Hoenir

Linton said:

chiang_mai said:

Linton said:

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.

Investing rules change with age and I think this might be one of them, What you say makes complete sense when there is still decades  left to run on the investing time horizon, but less so for investors aged over, say 70 years. The ratio of equites in a portfolio is meant to reduce with age, I think that the usefulness of index trackers also reduces. Simply put, if there is no time for recovery, the advantages of these things is minimised,  The case for maintaining a stable asset allocation, throughout an extended geopolitical downturn, just for the sake of it, fits into this same classification....I think.

 If Trump is causing you palpitations then you were poorly invested in the first place.

Don't recall any warnings on this board last year. The UK media gave scant coverage to what Trump said during his pre-election campaign. Even those in the US that pre-empted the Tariff rhetoric have been caught totally off guard.  There's going to be plenty of shocks and surprises a plenty as the reality dawns. Suspect that the complancencey will in time evapourate. 

InvesterJones

Hoenir said:

Linton said:

chiang_mai said:

Linton said:

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.

Investing rules change with age and I think this might be one of them, What you say makes complete sense when there is still decades  left to run on the investing time horizon, but less so for investors aged over, say 70 years. The ratio of equites in a portfolio is meant to reduce with age, I think that the usefulness of index trackers also reduces. Simply put, if there is no time for recovery, the advantages of these things is minimised,  The case for maintaining a stable asset allocation, throughout an extended geopolitical downturn, just for the sake of it, fits into this same classification....I think.

 If Trump is causing you palpitations then you were poorly invested in the first place.

Don't recall any warnings on this board last year. The UK media gave scant coverage to what Trump said during his pre-election campaign. Even those in the US that pre-empted the Tariff rhetoric have been caught totally off guard.  There's going to be plenty of shocks and surprises a plenty as the reality dawns. Suspect that the complancencey will in time evapourate. 

Well indeed - this board would tend to advocate an investment strategy that doesn't require thinking about short term events like what Trump says or does - if you're happy with the risk level/high valuations of US equities then you shouldn't mind when they do what they're doing. Of course there's guessing what your risk appetite is, and then seeing how you actually feel about it when it's tested, but that's all part of learning.

Linton

Hoenir said:

Linton said:

chiang_mai said:

Linton said:

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.

Investing rules change with age and I think this might be one of them, What you say makes complete sense when there is still decades  left to run on the investing time horizon, but less so for investors aged over, say 70 years. The ratio of equites in a portfolio is meant to reduce with age, I think that the usefulness of index trackers also reduces. Simply put, if there is no time for recovery, the advantages of these things is minimised,  The case for maintaining a stable asset allocation, throughout an extended geopolitical downturn, just for the sake of it, fits into this same classification....I think.

 If Trump is causing you palpitations then you were poorly invested in the first place.

Don't recall any warnings on this board last year. The UK media gave scant coverage to what Trump said during his pre-election campaign. Even those in the US that pre-empted the Tariff rhetoric have been caught totally off guard.  There's going to be plenty of shocks and surprises a plenty as the reality dawns. Suspect that the complancencey will in time evapourate. 

You didn't need to predict Trump, you should  merely be very aware that unexpected major events can occur and structure your investments accordingly.  It is unwise to assume they wont.

During last year and probably before I was stating my opinion that 60%+ in US was of itself an unacceptable level of risk as a single point of failure.

coyrls

Hoenir said:

Linton said:

chiang_mai said:

Linton said:

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.

Investing rules change with age and I think this might be one of them, What you say makes complete sense when there is still decades  left to run on the investing time horizon, but less so for investors aged over, say 70 years. The ratio of equites in a portfolio is meant to reduce with age, I think that the usefulness of index trackers also reduces. Simply put, if there is no time for recovery, the advantages of these things is minimised,  The case for maintaining a stable asset allocation, throughout an extended geopolitical downturn, just for the sake of it, fits into this same classification....I think.

 If Trump is causing you palpitations then you were poorly invested in the first place.

The UK media gave scant coverage to what Trump said during his pre-election campaign.

Really????

Rollinghome

chiang_mai said:

Investing rules change with age and I think this might be one of them, What you say makes complete sense when there is still decades  left to run on the investing time horizon, but less so for investors aged over, say 70 years. The ratio of equites in a portfolio is meant to reduce with age,

It's an old rule we should be sceptical of. The level of risk it's reasonable to take will always depend on individual circumstance and, as already suggested, will not strictly correlate with age.

A retired septuagenarian with an IL pension that meets all needs and no debt may be able to take far more risk than a younger man with young children, a mortgage, and an insecure job. 

It's true that we never know what's round the corner, but that applies at all ages to some extent.

Warren Buffett's words "Never risk what you have and need, for what you don't have and don't need," makes a lot of sense, but for some, how much margin they should leave in the calculation of what they may need will be more difficult for them than for others.