My FIRE Portfolio

[oslasho]

We’re close to the end of Q1, I’m at ~2% below all-time high. I’ll share a little overview for my portfolio and plans.

ASSET ALLOCATION

Asset	Current	Target	Range	Description
Equities	51.5%	~65%	50%-70%	Country-/Region-ETFs
Real Estate	16.5%	~10%	7%-17%	Swiss Funds w. Direct Holdings
Alternatives	7.5%	~10%	7%-17%	Managed Futures ETFs, CAOS
Fixed/Cash	19.5%	~10%	7%-17%	Accounts, Deposits, Notes, Bonds
Bonds	2.5%	~2.5%	0%-5%	15+ Years
Gold	2.5%	~2.5%	0%-5%	Bars / ETFs

[ Target: strategically // Range: tactically ]

Remarks: Still in the multi-year process of increasing equities to its target. If they do well, less rebalancing will be needed. If they don’t, happy to add at better prices. Recently changed the targets/ranges for the diversifiers, which mostly affects MF Trend and Fixed/Cash (required rebalancing is underway).

EQUITY ALLOCATION

Top Markets & Sectors

Market	Current	Target	Sector	Current	Target
US	39%	~48%	Healthcare	14%	~18%
CH	24%	~18%	Technology	14%	~17%
UK	19%	~11%	Financials	18%	~15%

Remarks: Sector “Targets” here basically mean “if I held the respective ETFs at their market’s target weight”.

LIMITS

Equities: Single Market	50%
Equities: Single Sector	20%
Equities: Single Company	2%
Fixed/Cash	100k per bank/bond (exc. state guarantee)
NW: Single ETF/Issuer	35% (2+ domiciles)
NW: Single Broker	35% (2+ domiciles)

Happy investing to all of you!

[Dr.PI]

My 3.14 Rappen:

@oslasho

Bonds 2.5% ~2.5% 0%-5% 15+ Years

Do you really need this? The whole position is less than the change of your portfolio in a week or on some days. The yield is probably very low if not negative. Are you betting on decreasing interest rates?

@oslasho

Gold 2.5% ~2.5% 0%-5% Bars / ETFs

This position is also insignificant. Unless you keep gold as a resource of last resort, but in this case it should be only physical. Some bars, many coins as a semiapocalyptic scenario currency. Sewn inside your vest. Maybe a bullet-proof one.

[PhilMongoose]

You made me check up on my portfolio:

Asset	%
Stocks (6% pension)	46%
Real estate	30%
Bonds (15% pension)	19%
Gold and commodities	5%

About 7% will be shifted from stocks to bonds as part of the continued filling of my pension pot.

I normally only look at my actively traded portfolio, which represents 50% of the portfolio. It is interesting as in the portfolio view, gold/commodities represents 10% which seems quite sizeable, but put into the perspective of the whole portfolio, it is only 5%.

Mortgage debt is 10% of assets.

[PhilMongoose]

@oslasho

re gold: i’m up ~25% and i don’t really like current prices. but who knows what’s still possible if there’s a crisis, plus the existing position is in phyisical bars.

While I don’t like how quickly it climbed this year, I think we might be climbing a wall of worry on gold. Interestingly, even with the significant moves last year and this year, there’s not been too much hype about it. I figured the wsb crowd would be all over it.

My gold holdings are ETFs, miners and futures. No physical, but tempted to move some to physical ETFs with custody in Switzerland given what is happening in the US.

[PhilMongoose]

@oslasho

bonds (pfandbriefe) that means: ~1% yield if held to maturity [in ~22 years], ~2% interest per year. if we get negative rates again in the next few years,

I’m not sure about bonds. I think maybe in the end, I’ll hold 5%-10% and re-allocate the rest to either stocks or paying off mortgage debt depending on what mortgage rates look like.

[PhilMongoose]

Not really. Gold/commodities are just trading positions.

Real estate is set due to illiquidity unless I sell some of it or downsize.

I think I’d want:

• >5% bonds
• >45% stocks
• no additional physical real estate beyond the existing 30%

Which leaves around 20% to play with.

[assemblyrequired]

Which RE and MF funds are you holding?

[larix.aurea]

Why is the range for RE, MF and Fixed/Cash off and not, as would seem consistent 5%-15%?

[dom.swiss]

Looks like you have a plan!

One thing to consider: what currencies are your fixed deposits, cash and bonds in? If you want to gear up for any inflation, you would probably need to adjust.

[dom.swiss]

@oslasho

can you elaborate?

I expect inflation, as borrowing money to build up the military and fix infrastructure in Europe will lead to that. With EUR or USD, I would have cautioned you. CHF is better, yet you will lose 2% per year, if our national bank is successful with their interventions. Real assets would be better to counter inflation: land, real estate, productive companies, gold.

[PhilMongoose]

It had a little bump the last days.

[Abs_max]

You have defined all sorts of limits quite well. Very disciplined:)

[Just_Ludo]

Hello!

I’m currently gathering information to build my investment portfolio. Since I prefer not to check on it every week, I’m looking for a solid and simple long-term strategy (25–30 years). Naturally, I may adjust my risk exposure over time as I get older.

The MP portfolio is simple and that is appealing. I really like the idea of holding a global ETF like VT as well as a Swiss ETF in CHF (e.g., replicating the SMI or SPI). However, I’m uncertain about other assets such as bonds (corporate vs. government, short- vs. long-term), commodities, and real estate (REITs). My goal is to lower the risk linked to stock, and I see bonds or real estate as options to pursue it.

When I look at bond performance, I’m not particularly impressed. With the SNB recently lowering interest rates, I don’t see much upside. Maybe I am wrong. One idea I’m considering is treating my 2nd pillar as my fixed income allocation and investing the rest in other asset classes.

As for real estate, it seems more attractive (e.g., SRFCHA or the Swisscanto Real Estate Fund Responsible IFCA). That said, there may be some market risk ahead—it’s hard to believe the upward trend can continue indefinitely.

I’m even less familiar with commodities. Everyone seems to be buying gold lately, and HSBC has raised its price forecast. But is gold really a long-term investment?

What are your thoughts? Thanks for sharing!

[Abs_max]

Everything in isolation can have drawdowns . Be is real estate, gold, commodities, bonds or stocks. This is reason why some investors use multiple assets to reduce the risk of their portfolio.

However it’s not good to make changes based on recent moves because that tends to end up being a bad move. You need to think of a long term asset allocation based on your risk tolerance

Maybe some ideas at the link here

[PhilMongoose]

@PhilMongoose

While I don’t like how quickly it climbed this year, I think we might be climbing a wall of worry on gold. Interestingly, even with the significant moves last year and this year, there’s not been too much hype about it. I figured the wsb crowd would be all over it.

So it has been climbing the wall of worry and gold is over bought. It seems to me we are still at the beginning of the hype cycle and so I haven’t trimmed yet. I’m still waiting for the shoe shine boy to tell me to buy gold. In fact, I even went more speculative by adding gold junior miners and silver miners. We’ll see if silver violently catches up with gold.

I still feel that TINA is still in okay so have opportunistically trimmed here and there to fill pension, but haven’t sold large amounts yet.

[mabi]

@PhilMongoose

I seven went more speculative by adding gold junior miners and silver miners.

I also have my eyes on the Global X Silver Miners ETF (SIL) but the TER of that one seems on the abusive (0.65%) side. Which silver miner ETF did you buy?

[PhilMongoose]

Yes, I bought SIL. I considered buying some of the constituents, but I’m not planning on holding this long term.

I’m already up over 30% on SIL, so the 0.65% TER is inconsequential

[oslasho]

Minor changes, nothing dramatic… also adding some “color” to my decision making.

CONTEXT

The main goal is to finance my early retirement. Ideally, I’d want the current stack to last “forever”, i.e. it’s got to at least offset withdrawals as well as inflation over the long run. Some basic, rather conservative assumptions I’m using:

• The “Core/Growth” bucket should return 4.5%+ real & net over the long run.
• The “Diversifiers” bucket should return 0.5%+ real & net over the long run.

Accordingly, a balanced 50/50 portfolio should return 2.5%+ real & net over the long run, as long as the unknown future sequences of returns can be handled by the given diversification. This should not be much of a concern, as my average withdrawal rate for the next ~20 years (pre-OASI) is supposed to be lower than 2% (and, also based on current numbers, shrink to 1% or so, as soon as the OASI situation flips from giving to taking).

In summary, a balanced and boring portfolio should “do the trick”. However, why not also have some fun on that ride, plus learn new stuff along the way? To me, that mostly means two things: get to know different asset classes [with skin in the game], plus have some active stance [with skin in the game].

ASSET MIX

Some of my current views/estimates, which basically lead to what I own or plan to own/change:

Asset	Return	Volatility	Correlation	SORR	Other
Stocks	great	high	-	high	-
Bitcoin	great	high	high	high	new
Cash/CHF	ok	none	none	low	-
Real Estate	fine	medium	medium	medium	-
Futures	ok	medium	low	low-ish	-
Bonds	ok	medium	low-ish	medium	-
Options	ok	low-ish	low	low	-
Gold	ok	high	low	high	-

Return: as in “expected, real & net” // SORR: “sequence of return risk” or “start date sensitivity”

Examples:

• Bitcoin: The return profile is why it’s in the “Core/Growth” bucket. It’s new and unproven, thus the tiny exposure.
• Cash/CHF: The winner as a “placeholder” asset, i.e. to bridge any planned allocation changes.
• Futures & Gold: Both have a similar return profile. However, gold’s volatility is higher and its SORR is way higher (due to its recent performance and due to the long/short capability of Managed Futures). Also, Managed Futures include gold as well as bonds in their trading.

VALUATIONS

As mentioned before, having some active stance is more fun to me. And because it’s usually a loser’s game, I do restrict that “tactical game” to stay within boundaries. Also, it’s more about [perceived]-risk-adjusted returns than pure outperformance of whatever benchmark one might have. Remember, I don’t need to take more risk, so my attempt is to get a “win-win” scenario. So, since [historically] very high valuations lead to higher risk in my book, I simply won’t add to stocks for the time being. I’ve changed the plans in terms of when to add [or letting them run]. I will still rebalance to the minimum threshold of 50%, if needed, but only increase the exposure when a) valuations are normalized and b) markets tank -25% (and another increase in case of another -25%).

ASSET ALLOCATION

Asset	Current	Target	Range	Description
Core/Growth	50.5%	+	50%-75%
Stocks	49%	+	up to 75%	Mostly ETFs
Bitcoin	1.5%	~	up to 5%	Hardware & ETF
Diversifiers	49.5%	-	25%-50%
Cash/CHF	21%	-	up to 25%	Accounts & Deposits & Notes
Real Estate	14.5%	-	up to 15%	Swiss Funds
Futures	9.5%	~	up to 10%	Managed Futures ETFs
Bonds	2.5%	~	up to 5%	15+ Years
Options	2.5%	~	up to 5%	Tail Risk ETF
Gold	0%	+	up to 5%	ETF

EQUITY ALLOCATION

Top Markets & Sectors

Market	Current	Target	Sector	Current	Target
US	40%	+	Healthcare	18%	-
UK	20%	-	Financials	18%	-
CH	20%	-	Industrials	15%	~

LIMITS

Equities: Single Market	50%
Equities: Single Sector	20%
Equities: Single Company	2%
Fixed/Cash	100k per bank/bond (exc. state guarantee)
NW: Single ETF/Issuer	35% (2+ domiciles)
NW: Single Broker	35% (2+ domiciles)

Happy investing to all of you!

[JEPG]

You don’t seem to chase income generation from the PF, more low-vol, risk controlled stash to withdraw from.

So, do you plan withdrawing?