These two ETFs are well diversified and basically give exposure to small caps globally. They were created to give small cap value exposure to clients who like factor investing.
By buying these you basically placed a bet that small cap value factor will outperform global market weighted stock market (VT) and hence you increased your small cap value exposure.
There is nothing wrong with these ETFs but the challenge would be that small caps beat large caps in very long periods of time and that period can be very long and volatile. So you need to decide if you are willing to wait for a long term or you are better off with VT. That’s all.
And agreed - you should review the split of AVDV and AVUV and also their portion in your total portfolio (VT + AVUV + AVDV)
If you are interested, some comments from Bogle on factor investing and trying to time (not specifically small cap value but still I think it’s relevant)
Maybe. Most likely, someone else more experienced would not take the geopolitical situation into too much account (expecially since it could turn either way, and if it is responsible for the tame drop, then a spike to the moon could also have happened depending on the news and you would have missed that one).
I think what would mostly differenciate a more experienced investor vs you right now is that the more experienced one would consider the current market fluctuations as run-of-the-mill-garden-variety-everyday-not-remarkable stock price fluctuations and anything happening to their stocks from last week as too short a time spawn to draw any conclusion out of it.
My understanding is that seasoned investors mostly become thicker skinned, not more accurate with their predictions.
Edit: Incidentally, my guess would be US inflation and FED rate expectations play a bigger role in current stocks behavior than the geopolitical situation (bar russian stocks), with earning calls influencing heavily individual stocks.
Which is ok
Honestly, you can be right and I’m wrong. I am in that situation now and my brain keeps thinking about it. And yes, I would think the same regarding VT. Basically everything where I paid more (not only 1 CHF or so), I’m asking myself (and in this forum), if it makes sense to sell, wait and buy again after a war or something caused a drop below my entry price. It might be a stupid question or strategy though. A lot of people here are more experienced than I am and that’s why your comments are helpful and appreciated.
You don’tknow if it was bad timing or not, nobody does. You think it was bad timing. I started investing in June 2021, that initial tranche took nearly 2 years to break even, but other subsequent tranches have done a hell of a lot better.
Single stocks are dangerous, a 100% portfolio in VT or equivalent is about as safe as it gets in 100% equity.
AVUV and AVDV are veeeery long plays, talking of selling them a week after buying them means you don’t really understand what they are and why they may be good.
Personal opinion: do nothing (it’s the best thing to do 99% of the time in the accumulation phase), ride it out, selling solidifies a loss, sitting on your hands does not.
Thanks Wolverine. Yes, it is not only the Israel conflict, you are right. Not sure if I made it clear. I don’t really worry much and I can still sleep well It is really more about optimizing, meaning making more money if selling when bought for a high price.
Maybe I can’t really explain it in a foreign language, but maybe you get my point. As an example, before the Ukraine war I sold my portfolio (Robo Advisory) and invested again after some time and made money, which is also a reason why I think about it now again. Sure, there was luck involved. Later I started with informing myself about ETFs and found this website and decided to do it by myself instead of using an active managed robo.
Someone more experienced would have bought regardless of situation. You buy at a pre-set schedule when you have the money. Every time regardless. i.e. 20% of your salary every month.
And more “experienced” people are market timers, that statistically fail to time the market more often then not.
Thanks a lot, I will check out the video. And yes, I should rethink about my current split, no matter if I sell or hold. Currently each of them is about 5% of my portfolio. I probably should get rid of them, also the XHB sector ETF and put this money into VT. I still like SMH (the european version) and SCHG though. 70% VT, 20 SCHG and 10% SMH maybe…
Honestly, I sometimes don’t think too much and sometimea I make decisions that are bad and sometimes good :-), sometimes only because I’m bored.
From what I understood today is, that even when I lately bought and for a much higher price than the current price, it usually doesn’t make sense to sell, wait and buy again. But maybe it makes (more) sense, if thinking about adjusting the split and invest in only 3 ETFs instead of 6. Would that reason, combined with the drop of the prices of my main ETFs make more sense to you, to sell now?
I think I get your point but in investing, better is the dire enemy of good.
Being content with good enough is the path to investing success and financial gains.
You’ll never be right 100% of the time and you don’t have to. You just need to be right enough often enough, for which regular investing in broadly diversified cheap index funds is the surest way (not a sure way, it’s still risky, but more sure than the other ones out there).
This, is very concerning. A portfolio is much like soap: the more you fiddle with it, the less of it you have. Fees are there at each transaction, if you make too many of them, even being successful will have a hard time overcoming the drag.
Thanks, I guess I will do so (do nothing). Except of what I just bought AVUV, AVDV and XHB. I will think about these and probably sell, but not rebuy because it is cheaper now but to optimize my portfolio and put the money into VT, SCHG and SMH. What I would sell and transfer is about 15% of my portfolio.
Got it, I will do so (do nothing). Except of what I just bought AVUV, AVDV and XHB. I will think about these and probably sell, but not rebuy because it is cheaper now but to optimize my portfolio and put the money into VT, SCHG and SMH. What I would sell and transfer is about 15% of my portfolio. The reason would not be to fix a “mistake” because of timing. And then I should keep my fingers in my pocket before buying additional ETFs.
I learned a lot today, thanks.
Thanks to all the users who told me their opinion and experience today.
Most probably I will get rid of:
AVDV
AVUV
Tomorrow, after I read again your comments and thought about it. I bought them last week and I think it was not the best choice for me. That’s about 8.x% of my portfolio. Instead of buying now at a cheaper price, I learned to not do so and instead I will buy VT for these 8k.
Also I will get rid of irobot and Nio stocks (-60% currently) and put that money also in VT. I was afraid about this 6 months holding rule that’s why I didn’t sell it earlier, now I think it is ok to do so.
SCHG and SMH I keep in addition to VT for now. I think they are good choices, just need to think about the split, but for now I will not touch them.
After this is done, I promise to not buy other ETFs again
edit: Sorry I forgot that I also hold IBIT Spot ETF, but I know it is gambling and it is fine for me
Well, small cap value is supported by robust history for potential for overperformance, all factor investing is, but the cost is TIME. It can take a long time to materialise. If you don’t need the money you plugged into it you might as well leave it alone. The money is already spent - that’s just how I see it. XHB i know nothing about, and am not a fan of sector investing but again that’s just me.
Also 1000% what Wolverine wrote, better is the enemy of good.
This sort of organic growth you’re envisaging: selling and then using the same money to rebuy the same for less, taking profits and the like, is more the realm of trading than investing, most recently it’s crypto poison seeping in, I’d say that to me it sounds like a recipe for disaster when (not if) your luck (because it’s luck) changes.
Trading is a zero sum game, there’s always a winner and a loser in every trade, they just don’t know who is who at the time of it, investing is thankfully a lot more kind than that.
Thanks Mirager, I think I got it and learned my lesson. I hope my last post fits more to your opinion. By the way, because we are talking about time. I’m 52 and will retire in 3 to 6 years, not sure, yet. Most of my money is invested in real estate and artwork. That doesn’t mean that I don’t care about my IB portfolio, it is actually pretty important to me. As long as I beat my savings account, it is fine for me, but maybe I was too greedy and aggressive with my portfolio, which is why I now should adjust it and then stop buying other ETFs.
I would say at least 10 to 15 years. I probably might not be interested in that topic when >70 years old, but who knows. If I don’t reach the “beat the savings” account I guess it will be fine as well. I know that my portfolio will still be kind of aggressive after the swap, but not as much anymore. And I know that I should have started with the ETF pocket before, maybe 2016 when I started with Robo Advisors, but that I can’t change anymore.
I will post the portfolio again after the swap, maybe you see other improvements. Thanks for your help
Did you consider speaking to a couple of financial planners or banks to get 2nd opinions on your plan for retirement ?
It is great that you are looking for opinions on a forum but from your posts the plan does not come across clearly and some of the investments seem quite exotic for your situation. Apologies if I misunderstood
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