New Member - Would like portfolio advice [Mexico]
New Member - Would like portfolio advice [Mexico]
Country of Residence: Mexico
International Lifestyle: I don't expect to move to the U.S in a short - long term , but I work for U.S company remotely
Currency: USD
Emergency funds: 2k
Debt: Zilch
Age: 25
Desired Asset allocation:
- Large-cap stocks 50%
- Mid-cap stocks 12% *
- small-cap stocks 12% *
- Emerging markets 13%
- Fixed-income securities 10%
- cash 12% **
notes:
* means only 12% in total together
** liquid cash it will be used for daily expenses plus startup projects ( business development ), and other day to day expense
Current assets:
Portfolio size: 2.4K and growing
Taxable:
IWDA iShares Core MSCI World UCITS ETF OCF 0.20% weight 50%
EIMI iShares Core MSCI EM IMI UCITS ETF OCF 0,18% weight 13%
WSML iShares MSCI World Small Cap UCITS ETF OCF 0.35% weight 15%
AGGG iShares Core Global Aggregate Bond UCITS ETF OCF 0.10% weight 10%
CASH 12%
Contributions
1.1k monthly
_______________________________________________________________
Questions:
1. do I need to improve my portfolio in order to make it powerful and well balanced portfolio without focusing on active managing my own portfolio ?
2. is a good approach starting out from aggressive to the least aggressive over the years?
International Lifestyle: I don't expect to move to the U.S in a short - long term , but I work for U.S company remotely
Currency: USD
Emergency funds: 2k
Debt: Zilch
Age: 25
Desired Asset allocation:
- Large-cap stocks 50%
- Mid-cap stocks 12% *
- small-cap stocks 12% *
- Emerging markets 13%
- Fixed-income securities 10%
- cash 12% **
notes:
* means only 12% in total together
** liquid cash it will be used for daily expenses plus startup projects ( business development ), and other day to day expense
Current assets:
Portfolio size: 2.4K and growing
Taxable:
IWDA iShares Core MSCI World UCITS ETF OCF 0.20% weight 50%
EIMI iShares Core MSCI EM IMI UCITS ETF OCF 0,18% weight 13%
WSML iShares MSCI World Small Cap UCITS ETF OCF 0.35% weight 15%
AGGG iShares Core Global Aggregate Bond UCITS ETF OCF 0.10% weight 10%
CASH 12%
Contributions
1.1k monthly
_______________________________________________________________
Questions:
1. do I need to improve my portfolio in order to make it powerful and well balanced portfolio without focusing on active managing my own portfolio ?
2. is a good approach starting out from aggressive to the least aggressive over the years?
-
- Posts: 167
- Joined: Wed Dec 02, 2020 12:13 pm
Re: New Member - Would like portfolio advice
You're 25 . . .plow as much into ITOT as you can and chill.
Re: New Member - Would like portfolio advice [Mexico]
This thread is now in the Non-US Investing forum (Mexico). I added Mexico to the thread title.
Re: New Member - Would like portfolio advice
my first big investment was around 20-21 and I mostly want to take another strategy more globally diversified. what your thoughts about my global allocation portfolio and don't depend on a single country?count damoney wrote: ↑Tue Oct 19, 2021 4:11 pm You're 25 . . .plow as much into ITOT as you can and chill.
Re: New Member - Would like portfolio advice [Mexico]
1) This is an answer to your question 1: I would suggest your stock part goes to one of these two:
- Vanguard FTSE all world
- Ishares MSCI ACWI
Your weights are off vs global market cap. global market caps can be easily found online. My suggestion is that instead of you checking market caps and then buying into them, and getting into fiddling... you get only 1 ETF for the stock part and that's the end of the story.
Remember: acc and not dist, so dividends are automatically reinvested, which is cheaper and minimize chances of doing mistakes
Boglewiki can help you find those exact ETFs.
I do not think small caps would make any difference, as it's highly correlated to mid+large caps, so I'd do without. However, there's no consensus on this. if you really feel you want small caps in, go ahead.
2) as an answer to your question 2: I agree with laurizas that given your age you might go for 0% bonds, but we do not know your risk tolerance. 10% is perfectly acceptable. I think 80-20 would still be ok.
3) for your bonds part, I would use AGGU, considering that mexico economy is highly linked to the US$ and US economy, and the objective of your bond part is ballast - while with AGGG a lot of volatility would come from forex
I would suggest against "investing everything in ITOT" because it is not diversified and is only focused on US
- Vanguard FTSE all world
- Ishares MSCI ACWI
Your weights are off vs global market cap. global market caps can be easily found online. My suggestion is that instead of you checking market caps and then buying into them, and getting into fiddling... you get only 1 ETF for the stock part and that's the end of the story.
Remember: acc and not dist, so dividends are automatically reinvested, which is cheaper and minimize chances of doing mistakes
Boglewiki can help you find those exact ETFs.
I do not think small caps would make any difference, as it's highly correlated to mid+large caps, so I'd do without. However, there's no consensus on this. if you really feel you want small caps in, go ahead.
2) as an answer to your question 2: I agree with laurizas that given your age you might go for 0% bonds, but we do not know your risk tolerance. 10% is perfectly acceptable. I think 80-20 would still be ok.
3) for your bonds part, I would use AGGU, considering that mexico economy is highly linked to the US$ and US economy, and the objective of your bond part is ballast - while with AGGG a lot of volatility would come from forex
I would suggest against "investing everything in ITOT" because it is not diversified and is only focused on US
Re: New Member - Would like portfolio advice [Mexico]
what do you mean by Your weights are off vs global market cap. global market caps can be easily found online. ? how can I improve it? I havejg12345 wrote: ↑Thu Oct 21, 2021 3:55 pm 1) This is an answer to your question 1: I would suggest your stock part goes to one of these two:
- Vanguard FTSE all world
- Ishares MSCI ACWI
Your weights are off vs global market cap. global market caps can be easily found online. My suggestion is that instead of you checking market caps and then buying into them, and getting into fiddling... you get only 1 ETF for the stock part and that's the end of the story.
Remember: acc and not dist, so dividends are automatically reinvested, which is cheaper and minimize chances of doing mistakes
Boglewiki can help you find those exact ETFs.
I do not think small caps would make any difference, as it's highly correlated to mid+large caps, so I'd do without. However, there's no consensus on this. if you really feel you want small caps in, go ahead.
2) as an answer to your question 2: I agree with laurizas that given your age you might go for 0% bonds, but we do not know your risk tolerance. 10% is perfectly acceptable. I think 80-20 would still be ok.
3) for your bonds part, I would use AGGU, considering that mexico economy is highly linked to the US$ and US economy, and the objective of your bond part is ballast - while with AGGG a lot of volatility would come from forex
I would suggest against "investing everything in ITOT" because it is not diversified and is only focused on US
IWDA iShares Core MSCI World UCITS ETF , but as you said to buy only one ETF vs having 4 portfolio , however I did this portfolio in order to be globally , and one of the reason was to cut down commissions since all in one ETF commissions are higher than buying individual etf
why Ishares MSCI ACWI and not IWDA iShares Core MSCI World UCITS ETF ?
I only use bonds as a strategy for reinvesting
Re: New Member - Would like portfolio advice [Mexico]
geshiro wrote: ↑Wed Oct 27, 2021 6:05 pmwhat do you mean by Your weights are off vs global market cap. global market caps can be easily found online. ? how can I improve it? I havejg12345 wrote: ↑Thu Oct 21, 2021 3:55 pm 1) This is an answer to your question 1: I would suggest your stock part goes to one of these two:
- Vanguard FTSE all world
- Ishares MSCI ACWI
Your weights are off vs global market cap. global market caps can be easily found online. My suggestion is that instead of you checking market caps and then buying into them, and getting into fiddling... you get only 1 ETF for the stock part and that's the end of the story.
Remember: acc and not dist, so dividends are automatically reinvested, which is cheaper and minimize chances of doing mistakes
Boglewiki can help you find those exact ETFs.
I do not think small caps would make any difference, as it's highly correlated to mid+large caps, so I'd do without. However, there's no consensus on this. if you really feel you want small caps in, go ahead.
2) as an answer to your question 2: I agree with laurizas that given your age you might go for 0% bonds, but we do not know your risk tolerance. 10% is perfectly acceptable. I think 80-20 would still be ok.
3) for your bonds part, I would use AGGU, considering that mexico economy is highly linked to the US$ and US economy, and the objective of your bond part is ballast - while with AGGG a lot of volatility would come from forex
I would suggest against "investing everything in ITOT" because it is not diversified and is only focused on US
IWDA iShares Core MSCI World UCITS ETF , but as you said to buy only one ETF vs having 4 portfolio , however I did this portfolio in order to be globally , and one of the reason was to cut down commissions since all in one ETF commissions are higher than buying individual etf
why Ishares MSCI ACWI and not IWDA iShares Core MSCI World UCITS ETF ?
I only use bonds as a strategy for reinvesting
I am not sure what's unclear about the statement. Let me clarify anyway:
1) EM are 13% of your total portfolio, and 16.6% of your equity portfolio.
2) search on google for "weight of emerging markets MSCI acwi", and 12% comes up automatically as your first result (you might want to look further in case you want to make sure the data is updated). 12% is different from 16.6%
Regarding your point on TER: you think you are saving because of the lower TER (and you are)... but what you save in TER is going to be eroded once you take into consideration bid-ask spread and commission costs of rebalancing those ETFs when you will rebalance. In addition, if you want to replicate market caps, then you have to be careful with market weights - which is going to add complexity and risk of psychological/human error. If you want to stick to the 3 ETFs for your equity part is not too bad though! I am just noting that your weights are not market weight.
I am not sure about the statement "I use bonds as a strategy for reinvesting". You mean "for rebalancing"? Bonds are for ballast when stocks go down. My only point is that AGGG is likely less stable than AGGU, and given that you are in Mexico which is highly connected to the US$, it might be that AGGU is a better choice.
"why Ishares MSCI ACWI and not IWDA iShares Core MSCI World UCITS ETF ?" Because ACWI include EM, so it can be used as a single ETF for your whole equity portion. MSCI world would leave EM out.
With all this said, my points are marginal. the portfolio is bogleheaded already and well diversified, so if you want to go ahead with that, you'd be fine... stay the course and keep reading the boglewiki!
Re: New Member - Would like portfolio advice [Mexico]
jg12345 wrote: ↑Thu Oct 28, 2021 1:04 pmgeshiro wrote: ↑Wed Oct 27, 2021 6:05 pmwhat do you mean by Your weights are off vs global market cap. global market caps can be easily found online. ? how can I improve it? I havejg12345 wrote: ↑Thu Oct 21, 2021 3:55 pm 1) This is an answer to your question 1: I would suggest your stock part goes to one of these two:
- Vanguard FTSE all world
- Ishares MSCI ACWI
Your weights are off vs global market cap. global market caps can be easily found online. My suggestion is that instead of you checking market caps and then buying into them, and getting into fiddling... you get only 1 ETF for the stock part and that's the end of the story.
Remember: acc and not dist, so dividends are automatically reinvested, which is cheaper and minimize chances of doing mistakes
Boglewiki can help you find those exact ETFs.
I do not think small caps would make any difference, as it's highly correlated to mid+large caps, so I'd do without. However, there's no consensus on this. if you really feel you want small caps in, go ahead.
2) as an answer to your question 2: I agree with laurizas that given your age you might go for 0% bonds, but we do not know your risk tolerance. 10% is perfectly acceptable. I think 80-20 would still be ok.
3) for your bonds part, I would use AGGU, considering that mexico economy is highly linked to the US$ and US economy, and the objective of your bond part is ballast - while with AGGG a lot of volatility would come from forex
I would suggest against "investing everything in ITOT" because it is not diversified and is only focused on US
IWDA iShares Core MSCI World UCITS ETF , but as you said to buy only one ETF vs having 4 portfolio , however I did this portfolio in order to be globally , and one of the reason was to cut down commissions since all in one ETF commissions are higher than buying individual etf
why Ishares MSCI ACWI and not IWDA iShares Core MSCI World UCITS ETF ?
I only use bonds as a strategy for reinvesting
I am not sure what's unclear about the statement. Let me clarify anyway:
1) EM are 13% of your total portfolio, and 16.6% of your equity portfolio.
2) search on google for "weight of emerging markets MSCI acwi", and 12% comes up automatically as your first result (you might want to look further in case you want to make sure the data is updated). 12% is different from 16.6%
Regarding your point on TER: you think you are saving because of the lower TER (and you are)... but what you save in TER is going to be eroded once you take into consideration bid-ask spread and commission costs of rebalancing those ETFs when you will rebalance. In addition, if you want to replicate market caps, then you have to be careful with market weights - which is going to add complexity and risk of psychological/human error. If you want to stick to the 3 ETFs for your equity part is not too bad though! I am just noting that your weights are not market weight.
I am not sure about the statement "I use bonds as a strategy for reinvesting". You mean "for rebalancing"? Bonds are for ballast when stocks go down. My only point is that AGGG is likely less stable than AGGU, and given that you are in Mexico which is highly connected to the US$, it might be that AGGU is a better choice.
"why Ishares MSCI ACWI and not IWDA iShares Core MSCI World UCITS ETF ?" Because ACWI include EM, so it can be used as a single ETF for your whole equity portion. MSCI world would leave EM out.
With all this said, my points are marginal. the portfolio is bogleheaded already and well diversified, so if you want to go ahead with that, you'd be fine... stay the course and keep reading the boglewiki!
of course , my weights are not market weight , but they are portfolio allocation. I could cut down TER at a lower price commission , but I could rebalance after the second period (35-40) when I move into moderate level , but in order to avoid risk factor when I rebalance . what should I do then? how can I make it more manageable portfolio to rebalancing ?Regarding your point on TER: you think you are saving because of the lower TER (and you are)... but what you save in TER is going to be eroded once you take into consideration bid-ask spread and commission costs of rebalancing those ETFs when you will rebalance. In addition, if you want to replicate market caps, then you have to be careful with market weights - which is going to add complexity and risk of psychological/human error. If you want to stick to the 3 ETFs for your equity part is not too bad though! I am just noting that your weights are not market weight.
I mean by "I use bonds as a strategy for reinvesting" since some ETF will pay dividends . I will be use it to buy more stocks from the portfolio allocation.I am not sure about the statement "I use bonds as a strategy for reinvesting". You mean "for rebalancing"? Bonds are for ballast when stocks go down. My only point is that AGGG is likely less stable than AGGU, and given that you are in Mexico which is highly connected to the US$, it might be that AGGU is a better choice.
where does 16.6% come from? since I dont have any 16.6% from EM and equity portfolio
Re: New Member - Would like portfolio advice [Mexico]
geshiro wrote: ↑Thu Oct 28, 2021 2:30 pmjg12345 wrote: ↑Thu Oct 28, 2021 1:04 pmgeshiro wrote: ↑Wed Oct 27, 2021 6:05 pmwhat do you mean by Your weights are off vs global market cap. global market caps can be easily found online. ? how can I improve it? I havejg12345 wrote: ↑Thu Oct 21, 2021 3:55 pm 1) This is an answer to your question 1: I would suggest your stock part goes to one of these two:
- Vanguard FTSE all world
- Ishares MSCI ACWI
Your weights are off vs global market cap. global market caps can be easily found online. My suggestion is that instead of you checking market caps and then buying into them, and getting into fiddling... you get only 1 ETF for the stock part and that's the end of the story.
Remember: acc and not dist, so dividends are automatically reinvested, which is cheaper and minimize chances of doing mistakes
Boglewiki can help you find those exact ETFs.
I do not think small caps would make any difference, as it's highly correlated to mid+large caps, so I'd do without. However, there's no consensus on this. if you really feel you want small caps in, go ahead.
2) as an answer to your question 2: I agree with laurizas that given your age you might go for 0% bonds, but we do not know your risk tolerance. 10% is perfectly acceptable. I think 80-20 would still be ok.
3) for your bonds part, I would use AGGU, considering that mexico economy is highly linked to the US$ and US economy, and the objective of your bond part is ballast - while with AGGG a lot of volatility would come from forex
I would suggest against "investing everything in ITOT" because it is not diversified and is only focused on US
IWDA iShares Core MSCI World UCITS ETF , but as you said to buy only one ETF vs having 4 portfolio , however I did this portfolio in order to be globally , and one of the reason was to cut down commissions since all in one ETF commissions are higher than buying individual etf
why Ishares MSCI ACWI and not IWDA iShares Core MSCI World UCITS ETF ?
I only use bonds as a strategy for reinvesting
I am not sure what's unclear about the statement. Let me clarify anyway:
1) EM are 13% of your total portfolio, and 16.6% of your equity portfolio.
2) search on google for "weight of emerging markets MSCI acwi", and 12% comes up automatically as your first result (you might want to look further in case you want to make sure the data is updated). 12% is different from 16.6%
Regarding your point on TER: you think you are saving because of the lower TER (and you are)... but what you save in TER is going to be eroded once you take into consideration bid-ask spread and commission costs of rebalancing those ETFs when you will rebalance. In addition, if you want to replicate market caps, then you have to be careful with market weights - which is going to add complexity and risk of psychological/human error. If you want to stick to the 3 ETFs for your equity part is not too bad though! I am just noting that your weights are not market weight.
I am not sure about the statement "I use bonds as a strategy for reinvesting". You mean "for rebalancing"? Bonds are for ballast when stocks go down. My only point is that AGGG is likely less stable than AGGU, and given that you are in Mexico which is highly connected to the US$, it might be that AGGU is a better choice.
"why Ishares MSCI ACWI and not IWDA iShares Core MSCI World UCITS ETF ?" Because ACWI include EM, so it can be used as a single ETF for your whole equity portion. MSCI world would leave EM out.
With all this said, my points are marginal. the portfolio is bogleheaded already and well diversified, so if you want to go ahead with that, you'd be fine... stay the course and keep reading the boglewiki!
of course , my weights are not market weight , but they are portfolio allocation. I could cut down TER at a lower price commission , but I could rebalance after the second period (35-40) when I move into moderate level , but in order to avoid risk factor when I rebalance . what should I do then? how can I make it more manageable portfolio to rebalancing ?Regarding your point on TER: you think you are saving because of the lower TER (and you are)... but what you save in TER is going to be eroded once you take into consideration bid-ask spread and commission costs of rebalancing those ETFs when you will rebalance. In addition, if you want to replicate market caps, then you have to be careful with market weights - which is going to add complexity and risk of psychological/human error. If you want to stick to the 3 ETFs for your equity part is not too bad though! I am just noting that your weights are not market weight.
I mean by "I use bonds as a strategy for reinvesting" since some ETF will pay dividends . I will be use it to buy more stocks from the portfolio allocation.I am not sure about the statement "I use bonds as a strategy for reinvesting". You mean "for rebalancing"? Bonds are for ballast when stocks go down. My only point is that AGGG is likely less stable than AGGU, and given that you are in Mexico which is highly connected to the US$, it might be that AGGU is a better choice.
where does 16.6% come from? since I dont have any 16.6% from EM and equity portfolio
of course , my weights are not market weight , but they are portfolio allocation. I could cut down TER at a lower price commission , but I could rebalance after the second period (35-40) when I move into moderate level , but in order to avoid risk factor when I rebalance . what should I do then? how can I make it more manageable portfolio to rebalancing ?
=> we are not talking about the same thing here when we talk about rebalancing. I do not mean "rebalancing" as changing your portfolio allocation based on age. I mean rebalancing as a regular action of buying/selling your ETFs (or assets) to ensure that their weight of your portfolio is as per desired portfolio allocation (or close), which should reflect your objective and risk appetite. I kindly refer you to the boglewiki or google for that.
I already suggested you use one MSCI ACWI/FTSE all-world ETF, which would require no rebalancing within your equity portion of the portfolio.
OK, you do not want to use market weights. I am not sure why. your allocation are still OK though.
I mean by "I use bonds as a strategy for reinvesting" since some ETF will pay dividends . I will be use it to buy more stocks from the portfolio allocation.
=> I would go for an acc ETF, and rebalance every 1 year. but then again, up to you. your allocation are still OK.
where does 16.6% come from? since I dont have any 16.6% from EM and equity portfolio
=> 16.6% = 13% / 78%, where13% is your EM port allocation, and 78% is the sum of all your equity port allocations (50%+13%+15%)
Let me reiterate two points I've made already:
1) It's ok to save a bit on TER, and it's ok to not stick exactly to market weights - if you want to. I am just trying to help you understand pros/cons of what you're doing, so that you make conscious choices. Both these issues will largely have little impact in the long run: your portfolio is bogleheaded and good to go.
2) I do however strongly suggest more reading in general, and specifically to understand better the concept of rebalancing. this will be important, sooner or later, given your proposed portfolio allocation. Other specific reads that may help: on hedged vs. non-hedged bonds (search posts on the forum or google search), and acc vs. dist ETF (boglewiki or google search)
Best of luck