30 yo with 100k to invest [Hong Kong]

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Topic Author
helloyou
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30 yo with 100k to invest [Hong Kong]

Post by helloyou »

I am 30, living in Hong Kong. I have been able to save a good chunk of my income since about 2 years ago.

My 'net worth' is currently at 170k and I save around 4k per month. Today, I only have about 18k invested (through mandatory retirement fund). I have read financial resources extensively on BH and I plan to have the following structure

- 6 month emergency fund = 20,000 USD
- Retirement schemes = 18,000 USD
- Deposit for rental property in Europe (purchase planned in 2021) = 40,000 USD

With the remaining 100k, I plan to get a simple World tracker traded in Ireland, and hold long term. Given that I am still relatively young and the current economic environment, I am not sure I would want to add bonds to the mix even though TIPS could be considered. However, the market is high and nobody can predict how long the bull market will last for; hence I was torn between a lump sum of 100k versus DCA over 1 or 2 years (I am no expert but I do not foresee a crash in the market during that time frame, this is purely my opinion and in that case I should just invest the whole sum straight away?).

What do you think?
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anon_investor
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Re: 30 yo with 100k to invest

Post by anon_investor »

helloyou wrote: Mon May 31, 2021 11:54 am I am 30, living in Hong Kong. I have been able to save a good chunk of my income since about 2 years ago.

My 'net worth' is currently at 170k and I save around 4k per month. Today, I only have about 18k invested (through mandatory retirement fund). I have read financial resources extensively on BH and I plan to have the following structure

- 6 month emergency fund = 20,000 USD
- Retirement schemes = 18,000 USD
- Deposit for rental property in Europe (purchase planned in 2021) = 40,000 USD

With the remaining 100k, I plan to get a simple World tracker traded in Ireland, and hold long term. Given that I am still relatively young and the current economic environment, I am not sure I would want to add bonds to the mix even though TIPS could be considered. However, the market is high and nobody can predict how long the bull market will last for; hence I was torn between a lump sum of 100k versus DCA over 1 or 2 years (I am no expert but I do not foresee a crash in the market during that time frame, this is purely my opinion and in that case I should just invest the whole sum straight away?).

What do you think?
How about lump sum 50%, and DCA the other 50% over 1 year?
lakpr
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Re: 30 yo with 100k to invest

Post by lakpr »

Backtesting shows that lumpsum investing wins in approximately 2 out of every 3 outcomes. As such, the standard Boglehead advice is to invest it all at once. Especially if you do not foresee an immediate need for the funds (your post indicates you have already accounted for EF, planned home purchase in a few years, etc.).

The compromise suggested by @anon_investor is also good. Invest $50k right now, then invest $10k per month over the next 5 to 6 months.
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Re: 30 yo with 100k to invest [Hong Kong]

Post by LadyGeek »

This thread is now in the Non-US Investing forum (Hong Kong).

I added the OP's home country to the thread title.
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helloyou
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Re: 30 yo with 100k to invest [Hong Kong]

Post by helloyou »

Thank you Anon and lakpr. I will follow your advice and go with a lump sum of 75k, and DCA the other 25k across 1 year. I hope I am timing this right but nobody knows how many more years we will still be in a bull market ...

Should I get bonds? Given the interest rates I do not see much value into this today (given I am far from being retiring)
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helloyou
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Re: 30 yo with 100k to invest [Hong Kong]

Post by helloyou »

I will invest 50k now and keep the other 50k as lump sum over 1 year
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Re: 30 yo with 100k to invest [Hong Kong]

Post by anon_investor »

helloyou wrote: Tue Jun 01, 2021 9:50 pm I will invest 50k now and keep the other 50k as lump sum over 1 year
When do you need the money?
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helloyou
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Re: 30 yo with 100k to invest [Hong Kong]

Post by helloyou »

anon_investor wrote: Tue Jun 01, 2021 9:57 pm
helloyou wrote: Tue Jun 01, 2021 9:50 pm I will invest 50k now and keep the other 50k as lump sum over 1 year
When do you need the money?
Not anytime soon... maybe not until retirement... but I may buy a house in a few years. However I would probably take a loan and have saved enough for the down payment...
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Re: 30 yo with 100k to invest [Hong Kong]

Post by anon_investor »

helloyou wrote: Wed Jun 02, 2021 6:24 am
anon_investor wrote: Tue Jun 01, 2021 9:57 pm
helloyou wrote: Tue Jun 01, 2021 9:50 pm I will invest 50k now and keep the other 50k as lump sum over 1 year
When do you need the money?
Not anytime soon... maybe not until retirement... but I may buy a house in a few years. However I would probably take a loan and have saved enough for the down payment...
If you will not need the money for a long time, then bonds are probably unnecessary if you thin you will not panic and sell in a market crash. At age 30, I think anywhere from 100% equities to 80% equities/20% bonds is reasonable. However, it is a personal decision based on your own risk tolerance.
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helloyou
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Re: 30 yo with 100k to invest [Hong Kong]

Post by helloyou »

anon_investor wrote: Wed Jun 02, 2021 7:50 am
helloyou wrote: Wed Jun 02, 2021 6:24 am
anon_investor wrote: Tue Jun 01, 2021 9:57 pm
helloyou wrote: Tue Jun 01, 2021 9:50 pm I will invest 50k now and keep the other 50k as lump sum over 1 year
When do you need the money?
Not anytime soon... maybe not until retirement... but I may buy a house in a few years. However I would probably take a loan and have saved enough for the down payment...
If you will not need the money for a long time, then bonds are probably unnecessary if you thin you will not panic and sell in a market crash. At age 30, I think anywhere from 100% equities to 80% equities/20% bonds is reasonable. However, it is a personal decision based on your own risk tolerance.

Sounds good. I will probably take either IWDA or VWRA. I have home biais though was my country or origin has €. Not sure I should get a currency hedged version or not...
Valuethinker
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Re: 30 yo with 100k to invest [Hong Kong]

Post by Valuethinker »

helloyou wrote: Wed Jun 02, 2021 11:27 am
anon_investor wrote: Wed Jun 02, 2021 7:50 am
helloyou wrote: Wed Jun 02, 2021 6:24 am
anon_investor wrote: Tue Jun 01, 2021 9:57 pm
helloyou wrote: Tue Jun 01, 2021 9:50 pm I will invest 50k now and keep the other 50k as lump sum over 1 year
When do you need the money?
Not anytime soon... maybe not until retirement... but I may buy a house in a few years. However I would probably take a loan and have saved enough for the down payment...
If you will not need the money for a long time, then bonds are probably unnecessary if you thin you will not panic and sell in a market crash. At age 30, I think anywhere from 100% equities to 80% equities/20% bonds is reasonable. However, it is a personal decision based on your own risk tolerance.

Sounds good. I will probably take either IWDA or VWRA. I have home biais though was my country or origin has €. Not sure I should get a currency hedged version or not...
If you have a 10+ year time horizon I would not bother with currency hedging.

It's only when you get within 10 years of retirement that you need to "lock" in your FX rate.

Up to that point you can rely on the fact that if the Euro gets too undervalued, eventually it will correct. Or too overvalued. That correction will take years, usually, but it does happen (mostly, sort of). Or at least enough that you can avoid the costs of a fund being FX hedged.

If you hold bonds, it's best to hold safe govt bonds in your home currency. That has the lowest correlation with the global equity index.

However right now in the Eurozone German govt bonds pay a negative return (negative yield). Thus, a bank account, if the deposit insurance is covered by the government and the government is fiscally safe, or term deposit ("CD" in American), is potentially superior to holding a bond fund.
Topic Author
helloyou
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Re: 30 yo with 100k to invest [Hong Kong]

Post by helloyou »

Valuethinker wrote: Thu Jun 03, 2021 4:31 am
helloyou wrote: Wed Jun 02, 2021 11:27 am
anon_investor wrote: Wed Jun 02, 2021 7:50 am
helloyou wrote: Wed Jun 02, 2021 6:24 am
anon_investor wrote: Tue Jun 01, 2021 9:57 pm

When do you need the money?
Not anytime soon... maybe not until retirement... but I may buy a house in a few years. However I would probably take a loan and have saved enough for the down payment...
If you will not need the money for a long time, then bonds are probably unnecessary if you thin you will not panic and sell in a market crash. At age 30, I think anywhere from 100% equities to 80% equities/20% bonds is reasonable. However, it is a personal decision based on your own risk tolerance.

Sounds good. I will probably take either IWDA or VWRA. I have home biais though was my country or origin has €. Not sure I should get a currency hedged version or not...
If you have a 10+ year time horizon I would not bother with currency hedging.

It's only when you get within 10 years of retirement that you need to "lock" in your FX rate.

Up to that point you can rely on the fact that if the Euro gets too undervalued, eventually it will correct. Or too overvalued. That correction will take years, usually, but it does happen (mostly, sort of). Or at least enough that you can avoid the costs of a fund being FX hedged.

If you hold bonds, it's best to hold safe govt bonds in your home currency. That has the lowest correlation with the global equity index.

However right now in the Eurozone German govt bonds pay a negative return (negative yield). Thus, a bank account, if the deposit insurance is covered by the government and the government is fiscally safe, or term deposit ("CD" in American), is potentially superior to holding a bond fund.
Noted, thank you!

I’ll go 100% World etf, traded in USD. If I get the msci world version I might add an emerging market line for the China/South Asia exposure
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helloyou
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Re: 30 yo with 100k to invest [Hong Kong]

Post by helloyou »

So I will have 50k in cash laying on a saving account in HK that gives 0.01% ... I can transfer this money to my country (0.5% interest per year but with a cap to 22k EUR). Should I use this to park some of the cash for the time being? Seems to be good amid the current fixed income environment
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helloyou
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Re: 30 yo with 100k to invest [Hong Kong]

Post by helloyou »

I finally started to invest in ISAC (MSCI acwi) as I couldn’t access Vanguard with the bank. I am 100% in it. No bonds. Just a large emergency fund that can be used to rebalance into equities in times of downturn
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Re: 30 yo with 100k to invest [Hong Kong]

Post by TedSwippet »

helloyou wrote: Mon Aug 16, 2021 7:42 am I finally started to invest in ISAC (MSCI acwi) as I couldn’t access Vanguard with the bank.
Looks good. iShares ISAC is a fine all-world product. As a bonus, it is also 0.02% cheaper than Vanguard's VWRD, so if anything you have probably gained slightly from not being able to access VWRD.
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helloyou
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Re: 30 yo with 100k to invest [Hong Kong]

Post by helloyou »

TedSwippet wrote: Mon Aug 16, 2021 8:05 am
helloyou wrote: Mon Aug 16, 2021 7:42 am I finally started to invest in ISAC (MSCI acwi) as I couldn’t access Vanguard with the bank.
Looks good. iShares ISAC is a fine all-world product. As a bonus, it is also 0.02% cheaper than Vanguard's VWRD, so if anything you have probably gained slightly from not being able to access VWRD.
That’s good to hear. I will probably stick to it for decades to come :)

I had VWRD available, not VWRA and I wanted an accumulating version hence proceeded with ISAC

I might add more bonds (20% when I reach 40 which is in 10 years)
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