Nice progression!
This part makes me worried - just looked at my IBKR and see 40.7% return YTD in CHF terms! Didn’t realise how insane it has been holding US stocks (with a tech weight).
Problem is, what even is there to rebalance into…
Everything else? 
That‘s the point of rebalancing, no?
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If there’s no other investment you can find value in, then there’s nothing for you to rebalance into and no need for it.
If you think a realistic change of circumstances, either personal or marketwise, would make you enjoy other investments, then now might be the time to buy them in order to have them when the insurance is needed / the opportunity for them to shine happens.
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What is everything else?
- International stocks maybe. But VXUS is up only 10% in the last 5 years compared to VOO up 88%… Huge opportunity cost if other countries keep regulatory burdens / disincentives to invest / other participants just keep going into US
- Crypto with bitcoin >100k?
- US / Swiss bonds or even just CHF when I’m 29 years old and have 30+ years time horizon. This would just be trying to time the market.
- An apartment in Geneva which delivers 1% rental yield?
I think TINA is a big problem today and part of why US valuations keep going up. Every person in US (and outside of it) sees it as the best place to put their cash and leave it passively.
Pension? Cash? Bonds? Gold? Different stocks?
I’ve been shifting into gold and pension funds the last 2 years.
Pension:
- 3rd pillar is maxed every year but thats only 7k and goes into equities
- 2nd pillar isn’t worth buying back until 50+ years old given the opportunity cost of 1% return
Cash/Bonds:
- Sure, if you feel equities are overvalued and a crash is coming. But if you get this wrong its a pretty huge cost. And timing a crash is near impossible.
Gold:
- Has done very well recently with world “de-dollarisation”, non-US central bank buying, and expectations of rate cuts. But then its also at all time highs… And its a “non-productive” asset as it doesn’t actually create value. In fact, it has negative productivity because you have to pay for storage, insurance, and financing costs. So to me this again has to be a trade > investment.
Different stocks:
- Meaning non-US?
Probably diversifying into ex-US stocks and bonds is logical to “de-risk”. But feels like it can be such an opportunity cost of returns given the amount of money happy to pile into US stocks + 4 years of incoming Trump pumps. And the “when the US sneezes, the rest of the world catches a cold” adage is more true today than it has been in a while so diversification may just cap your upside without protecting your downside.
Abandoning US stocks any time over the last 15 years would have been just about the worst portfolio decision possible.
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That’s probably how it must have felt in 1999 and just before the Japan stocks crash. I’m not saying that’s what lies before of us and past outperformance can continue in the future when supported by good fundamentals but outperformance is also what happens in a bubble, before a crash.
That being said, I think where our views differ is on the fundamentals behind US growth, their future prospects and those of other countries, which is fine. Different views on different assets is what makes a market.
We seem to have a different relationship to risk and missing out on gains too, which is also fine. Just keep in mind that with an all-in profile (“I don’t want to carry the loosers when the future winner is so obvious”) can also come greater falls and that we should be psychologically and life-circumstances wise ready to handle them too.
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First of all there is nothing wrong being exposed to US stock market 100%. It’s an individual decision. However it’s always worth considering the WHY
In your comment you listed most of the things as not interesting because in your view they fall in two categories
- already high in price and hence less expected return (Geneva RE, Crypto)
- Not risky enough and hence less expected returns (Bonds)
However at the same time , your reason to pick US equities as sole investment opportunity also exposes you to an asset class which is highly priced and hence most wealth managers are projecting lower expected returns versus past. You can read reports from Vanguard, Goldman Sachs & JP Morgan.
The point I am trying to make is that most of the times investors when they make a decision, they build a narrative in their minds. They might be right or wrong. Only time will tell.
- Your narrative is that „US stocks is only place to be and if they fall everything will fall as well, so doesn’t matter“
- someone else‘s narrative could be that „US stocks are overbought because of their „safe“ perception and hence market correction could be in cards. If US stocks fall money might flow into other assets / regions, so might be good to diversify „
Btw, I think Real estate in Zurich or Geneva has become such low yield because of the similar reasons -: they have higher demand than supply because people consider them to be safe place to put money and a good way to capture capital appreciation. So their expected returns have fallen
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We and many others are off topic @Dr.PI. I don’t know how it felt and probably neither does anyone who wasn’t there, and those who were there are probably massively blindsided by the tons of ink spilled to explain what happened. They probably look back now and say “it was obvious”. Well, if it was so captain obvious then the actually obvious question is “so why didn’t you do something about it?” (edit: I don’t mean nickel and dime retail, I mean big institutional investors with the knowledge and resources and means to actually do something meaningful), meaning it wasn’t at all obvious.
Edit: In 1999 you had paper napkin “companies” with no staff, no books, no offices being valued in the millions/billions, and Japan’s overall PE was in the high 70s, some companies spiking to 200, that’s more obvious to me!
Again, reaching back to my own recollection f the Greek stock market bubbleS of 1995-2005, it was obvious to even my teenage brain who had zero interest in finance: when you see a host of 25-year olds prancing around in shinny double-breasted, pinstripe Vito Corleone suits and BMW Z4s, Porsche Boxters and Mercedes SLKs, where one day before they didn’t have two coins to rub together, and you see literal village butchers and barbers talk about “limit ups” and “shorting” and ticker screens being in every goat shed…it was obvious, yet people still got copulated. I do get vibes of that craze myself right now, I think it’s because of the massive bull this year, it didn’t sound like this in 2022 OR EVEN 2023. Most people have short plans and shorter memories.
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This is a nice graph by Societe Generale showcasing, how the US is further drifting off its fundamentals:
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Recent FT opinion article: How ‘the mother of all bubbles’ will pop
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Thanks for sharing, that’s why I like my tilt to VEUR ETF 
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I was around in 2000 bubble. The atmosphere was euphoric and everybody was buying stocks thinking it was a sure-bet. There was no fear - at least not that I noticed. I was young and not paying too much attention.
The atmosphere was somewhat like the recent covid boom as people plowed into one fad after another: cannabis, NFT, ARKK, crypto, 3d printing, plant-based meat.
Who knows? Maybe there will be another bout of euphoria when Trump is inaugurated and drives another leg of the bull run.
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That.
And from the article: “The certainty of Wall Street has spilt over into the popular media, which often picks up on market trends only when they are well established and near an end. Hype for American superiority is now the stuff of TV, radio, podcasts, newspaper columns and magazine cover stories, which have a record of pointing the wrong way on future trends.”
I’m not buying since June this year, not selling either, just saving cash. Rationale that my projected saving/year is <10% of my total portfolio (ok, my portfolio is small for these parts!), so continuing buying will do less for me than the existing portfolio if the bull continues, and do much more harm if there’s a crash, while holding cash will do the exact opposite: it’s good to have and will come in handy to plug in if there’s a crash. I suspect many here without stonking big portfolios of stonks may be thinking along the same lines, as well as diversification away from equity (which I am also thinking about, just don’t have the cash at hand to plug right now).
One thing that does worry me is what Warren Buffett is doing. He’s the ultimate buy and hold and never sell investor. Yet he’s been a net seller for many quarters in a row now. Even selling long-standing holdings and has stopped buybacks of BRK.
He owns various business and so has a direct real-time read of the economy through those. Now for sure he’s deliberately getting out early and will miss out on any Trump inauguration boom, but I suspect his read is that everything is now priced to perfection and a move back to reality can come at any time and be triggered by any number of unexpected events.
He’s been there and done it all and knows he can be patient and pick up bargains after the SHTF and everybody else is panic-selling. He doesn’t need to sell at the top.
It’s crazy that someone who doesn’t have much longer to live has more patience than the average investor many decades younger than him.
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I agree with all of the above and have been thinking about it for at least 1.5 years already. That’s the basis of my thesis for buying BRK.B after reading most of the shareholder letters, I expect BRK will skyrocket if the SHTF 
There can be many reasons why Buffet is cashing out. It could also be that they are planning a big acquisition over next years and cannot risk to have money locked in equity bear market.
There is no way to know if he is doing this due to a positive thing or a negative thing. He will never say this (if it was negative thing) because that would definitely crash the market.
I think the issue we as investors face is that our life is only going to be once. So we can do all the math we want, we can read as many papers as we want, but if we get stuck in 50-60% crash which lasts for 10-15 years, it would definitely hurt our plans in our lifetime even though those 10-15 years would be called “greatest opportunity to buy” in future.
This is what happened to those who got burned in dot com bubble, in Japan crash, in Greek market crash , in Swiss RE crash of 90s and many more crashes.
P.S -: people can write off Ray Dalio as old or outdated but I think some things he says makes a lot of sense. One of them being “your portfolio should be built to withstand many scenarios because you don’t know which scenario you will face tomorrow”
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This was also a bit of the inspiration for my recent concerns 
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Thanks for all the points everyone shared. There is definitely a lot of validity to them. In the end I think I am still just too biased by all the arguments for US stocks. 
Things like:
- Better historical performance than any other stock market (capitalist culture / shareholder friendly regulations)
- Continued increasing global presence of US companies (growing % of global profit chart for example, non-US companies all choosing to IPO in US)
- Passive investment is super convenient (as opposed to buying and renting real estate for example)
- Tax efficiency: a portfolio of VUG+BRK.B has a dividend yield of just 0.25%. Compared to a bond or dividend/international stock at ~4.5%. With a marginal tax rate of 40% and a wealth tax of 0.5% this would give a tax drag of 0.6% for US portfolio vs ~2.3% for alternatives.
- Inflation efficiency: ties into the above, higher tax drag is applied on “nominal” returns while investor needs real returns to justify parking cash away. Trump policies are pretty pro-inflation as it stands… Some of these less tax efficient investments could easily yield negative real returns after costs.
- Fee efficiency: expense ratios of <0.05%. IBKR paying just $1 commission for a $50k order…
- An actual “productive asset” with studied and justifiable long term returns (investment deriving more future value, paying for “discounted” future free cash flow for someone who needs the cash today). Wins over crypto/gold to me for this fact alone.
- A huge network of incentives at play to keep stocks moving higher. The economy is built on the value rising. Increasingly pensions (401ks in US in particular) are over-reliant on them. Politicians have huge exposure, both personally and politically. Overseas investors. Increasingly sovereign wealth funds (see Masayoshi Son and Trump’s announcement…) When the economy struggles QE starts again (V shaped recovery of covid…).
The idea of diversifying is appealing because 40% real returns in 1 year is clearly unsustainable. But it really feels like it would just be a move to trading>investing. No other asset class seems competitive if we’re talking a 20-30 year time horizon.
Maybe the answer is just to be a bit more patient with buying when getting paychecks/bonus. And then if we do have a sizeable crash take it as an opportunity to first invest side cash, and then even potential to leverage up while young (of course thats a whole other topic…).
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The chance of a 50%-60% of a crash of everything is not that huge. If you are broadly diversified, then parts of your portfolio will do well and the total impact might be less dramatic.
And on the way there would be lots of volatility up and down. If you are still accumulating in the coming 10 years, it is one of the best outcomes anyway; if you live off your portfolio, then the story is different.
It depends on what you are after too. Some people are chasing 40% annual gains.
What I would like is a 6% real rate of return. That would do me fine. Unfortunately, inflation makes this difficult to guarantee.
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