Um. Ok. Got you there!
Now the same chart, logarithmic scale.
Still so scary?
Whats the difference? You may lose a lot within short time and I think individual investor can not effort losing money.
One of the most widely quoted pearls of wisdom of legendary investor Warren Buffett is: "Rule No. 1: Never lose money
Rule No. 2: Never forget rule No. 1
You are just as likely to lose money with your choice of stocks. I’d argue, even more likely. You are vulnerable to global events, such as a global market crash as observed in 2001 and 2008 as well as single company events, such as fraud, mismanagement, losing market share to competition etc.
No, not really. However I am also not fully covered against those but I am less vulnerable. It is because I am way more picky when I decide to take a company to my portfolio than the total market. I take only those who are showing more resistancy against all things you mentioned. Only the time will tell if Iam right, specially bad times will tell.
Good luck waiting for Godot
why do you say that?
I did not say I am not investing until then in to others but I only said I did not “born early enough” 
1 Like
Just because you made me interested I let the IB making a report since I started investing and it says that I am head to head to the VT
However I do not think this has any meaning, apart from showing it up in such pity online arguing where you only want to make yourself visible.
And you know what, If I add the received dividends to the total it makes it far ahead comparing to the VT
But again, I dont believe it has anything to do with it in real life.
What would be more important to see real input from any of you guys who all seem to be agreed upon believing in sum ETF-s…
I am not saying that investing in ETF can not be part of a diversified portfolio but investing only to those ETF-s , that seems to be mistake for me.
Yes, I have a different opinion & I thought it is space for development here in case there is need for opened discussion
1 Like
Now, take it easy with ad hominem arguments.
Did you also account for VT dividends?
I’d rather discuss solid arguments, not opinions. Perhaps you could tell us what stocks did you pick, why did you pick them, how did you chose the right time to buy and how will you chose the right time to sell.
1 Like
Sure
What was not solid enough in between my arguments for you?
I would rather discuss basics first and then we can go in to details but at this time I only see firm opposition withoug good reason, and when I deliver a solid standing point of one typical subject in the whole investing cloud I receive only critics and no interest of even thinking about it but " godoing" . I am still having the ambition of discussing things but not on this way.
Hi everyone,
I’m revamping this thread as I have been studying all your advice (thanks a lot, amazing as always) and indeed simplified A LOT and here we go
|GEO DISTRIBUTION||VT| MY TARGET|
|—|—|—|—|—|
|North America|VTI (Vanguard Total Stock Market ETF), TER 0.03%|58.6%|55.00%|
|Europe|?|18.4%|15.00%|
|Pacific|IPAC, (iShares Core MSCI Pacific ETF), TER 0.09%|12.8%|10.00%|
|Emerging Markets|EIMI (iShares Core MSCI EM IMI UCITS ETF), TER 0.18%|9.8%|10.00%|
|REIT|IPRP (iShares European Property Yield UCITS ETF… EU ex-UK), TER 0.40% |0%|10.00%|
|Middle East|-|0.2%|0.00%|
|Other|-|0.2%|0.00%|
|||TOT|100.00%|
I have added the distribution of VT as term of reference. Also, notice that “middle east” is there because of VT but I plan to not explicitly have exposure in that region. At the moment I have only bought VTI back in July. Some questions/request for advice for you:
- what do you think about this new distribution?
- Any advice on Interesting ETF that covers Europe both small and big-medium cap? something like VTI for Europe basically
- Considering REIT is basically Europe ex-UK, I’m thinking if I should probably reconsider the distribution of REIT and Europe ETF since both count as exposure to europe (total would be 25%).
- EM I’m still in doubt between EIMI and VWO, thoughts?
I know I could simplify even more by buying something like VEU or VEA next to VTI, but I would still prefer to have the flexibility to rebalance my geographical exposure myself.
Thanks a lot
The more I read and the more I know, the more I can recommend VT only (I have over 17 years since I started).
From your wished allocation to VT, the difference is so small that it does not make sense to go for anything else than VT, at least in my opinion. Still you can add your REIT ETF separately if you really want. VT will be very cheap, easy to stick to your plan and add regularly into it.
Other considerations:
VT: Very easy to stick to your plan continously, rebalancing is time consuming and tends to be emotional driven.
Europe: ETF are normally more expensive than VT, you can buy VEA but again, more time and assuming you are so self-disciplined to follow it.
Final comment, we all tend to think that VT is very simple, for people without knowledge or we just think we can/want to beat the market. However, in the long run, I doubt you (or me) can beat it continuously for the period you plan to invest. So => buy VT based on your allocation plan above.
1 Like
I concur - even (or especially) as someone who doesn’t necessarily believe VT’s allocation is the be-all and end-all to choose.
But if you decide to follow VT’s allocation as closely as you seem to do, I’d just go with go with VT for simplicity’s sake. At least for the equity part. As long as capital gains are tax-free, you can still switch later.
1 Like
I don’t disagree in general principle, that’s why I’m trying to simplify (and yes, I could do it even more, agree)… and definitely I don’t think I’m gonna beat the market.
However, I would be really curious to know how many people on this forum do actually only, only, hold VT !!! (other than @finance84 :)). I’m sure it is many, not sure it is everyone who says “just buy VT” (referring in general in the forum, as it comes up all the times, not picking on your replies here guys).
I say this because: then why do we all keep discussing about ETFs, strategies, what is best portfolio, rebalancing, etc., … just have one page where we all sign and say “We believe in VT” and we are done.
I did/do read it, and in fact the most “famous” three-fund portfolio is not VT, rather actually VTI+VXUS (I’m discussing only about the equity part in this thread), and the other most “discussed” are the different four-fund which include REIT. Here I’m basically considering whether to split VXUS further, in 2 or 3, and adding REIT or not. Also because VXUS has still 7% of North America anyway, so it adds up to my VTI, not purely “ex-US”.
I’m taking VT as initial reference, and having it split into as few as possible macro geographical allocation helps me adjust later on (eventually) when rebalancing.
1 Like
I need to confess you something… I do not own VT! But my wife does it, so partially guilty.
The reason can be a very long discussion, but most of the topics are already discussed intensively everywhere including this forum: It is a matter of portfolio allocation and tastes.
In your case, as your allocation is almost the same as VT, I can only recommend you VT.
In case you wonder, and for the sake of adding my 2 cents to the portfolio discussion:
VT: Simple and covers all markets, very unlikely to be beaten by any other strategy with an horizon over 10years.
So why not VT?
- I am very uncomfortable with Europe and Australia, I do not believe in these markets due to regulation, growth and politics and do not want to allocate nearly any %. I really doubt they can beat either VTI or VWO. However, this is just an opinion (emotional and can be right or wrong).
- Sectors weights. Not all sectors brings me the same peace. i.e. I do not like at all Financials it is a matter of my opinion on the industry, their behavior and their future with new generations. Also you can see the annual return since 2007…On the other side, I fully trust on Healthcare and Technology. Why should I buy underperformed, obsolete areas that I just do not like… Please do not be influenced by this, past performance does not guarantee future returns and industry can be disruptive or a new Goverment in the US might over regulate Healthcare and cut all earnings, who knows.
See here: Annual S&P Sector Returns • Novel Investor
-
We are not the same in this forum, otherwise there will be one post “Buy VT or die”. I share the view on index funds and understood already that stock picking is prone to kill you except if you are a professional reading and understanding strategy, finance, industries and competitors… a full time job, luck and still, many will be dead by commissions and emotions. Still some people with few years, that have not live the 2000 and 2008 at home, might think that it is not that difficult… time will come for them. On the other side, I do not share the mantra of always “ALL IN”, I am always invested but I do not put all my savings the next day in the market as I am also concerned of the lost of capital. The blog big ERN explains this well and why we should not underestimate the crisis. Here there is partially Market timing, but if you understand the markets and earnings projections, you can run what is the expected return in the next years and then decide your % IN. Again, assumptions, beliefs, emotions… all food for Mr.Market.
-
Everyone should have personal circumstances such a House to buy (might influence your Pillar 2), retirement in the next 5 years, a difficult decision at home, etc.
-
Allocation should be done carefully, rushing into it is not the way to do it. You should have knowledge, read a lot (a lot), the more you know, the more you will understand areas that you totally overlooked.Backtest it, feel confidence to hold to it… much difficult than with VT + Bonds and/or Cash.
-
Time. You cannot do everything in life, there is a theory that you can be very good at one thing and acceptable at another (based on the 10000h rule to excel). I assume most of us have family or will have, or a sport we love and a full time job. Fitting investing on this will means you leave something behind. In my case, my job brings me money and satisfaction and I still want to be a full time parent and husband at home, so the less I spend in markets the better.
I took the time to explain my view, thanks for reading it, my advise and why I personally do not walk the talk (my family and wife do it for me under my influence).
This is just my opinion! and I am certainly, that VT will beat me
10 Likes