This is my first post and I just have to say that I love the community and all the valuable information I have found here! Below is the information about my recently chosen portfolio:
Country of Residence: Greece
International Lifestyle: Permanent resident
Currency: EUR
Emergency funds: 1 year of expenses
Debt: None
Age: 32
Desired Asset allocation: 80% stocks / 20% bonds (following the 110 minus age rule)
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Current retirement assets
General investment account on Interactive Brokers, tax-free
Core Portfolio (Ticker) (Expense Ratio)
72% VWCE Vanguard FTSE All-World UCITS ETF (USD) Accumulating (0.22%)
8% VFEA Vanguard FTSE Emerging Markets UCITS ETF USD Acc (0.22%)
20% AGGH iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) (0.10%)
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New investments
New annual Contributions
I plan to contribute 15% every 6 months with rebalancing.
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Questions:
1. I just invested in this portfolio last week. Now I see that there is probably some overlap between VWCE and VFEA, making it more biased towards Emerging markets. Should I remove VFEA and just increase to 80% VWCE? If so, should I wait until VFEA goes in the green (giving me a small return) and then reallocate?
2. Is there any other weakness in my portfolio allocation?
3. Is my contributing and rebalancing plan (15% of the initial investment every 6 months) good enough?
Portfolio advice: 32 years old, Greece. Should I simplify or not?
Re: Portfolio advice: 32 years old, Greece. Should I simplify or not?
Welcome aboard whi21!
I think, at your age, you made some very important choices. I guess you know the effect of compound interest so the other important element now is perseverance.
I believe that you yourself can verify that VFEA is already practically contained in the VWCE.
If you plan to keep your portfolio forever and if you have just bought the VFEA quotes and immediately resell them at par you should only have the cost of the commissions. Later you will also have the taxes to pay.
As for rebalancing, when you periodically reinvest you will make sure to keep the 80% -20% split. I think you need also to determine with what discrepancy do you intend to rebalance. I mean, one day, would you rebalance at 81%-19%?
Last thought. Think also about investing in yourself so that your future contribution can be much greater than the current one.
I think, at your age, you made some very important choices. I guess you know the effect of compound interest so the other important element now is perseverance.
I believe that you yourself can verify that VFEA is already practically contained in the VWCE.
If you plan to keep your portfolio forever and if you have just bought the VFEA quotes and immediately resell them at par you should only have the cost of the commissions. Later you will also have the taxes to pay.
As for rebalancing, when you periodically reinvest you will make sure to keep the 80% -20% split. I think you need also to determine with what discrepancy do you intend to rebalance. I mean, one day, would you rebalance at 81%-19%?
Last thought. Think also about investing in yourself so that your future contribution can be much greater than the current one.
Re: Portfolio advice: 32 years old, Greece. Should I simplify or not?
Hi whi21,
You could sell the EM and increase allocation of all world to 80% , I guess commission would not be that high with IB, but it also depends on the size of the portfolio which you do not mention.
If you plan to stick with 80/20 “for ever” you could just put all future contribution to VANGUARD LS 80. This way you save on costs for purchasing 2 different funds and also rebalance costs.
You do have an overlap now, but if portfolio is not that big it might not make any difference, unless you keep adding to EM as well.
GL with whatever you chose.
You could sell the EM and increase allocation of all world to 80% , I guess commission would not be that high with IB, but it also depends on the size of the portfolio which you do not mention.
If you plan to stick with 80/20 “for ever” you could just put all future contribution to VANGUARD LS 80. This way you save on costs for purchasing 2 different funds and also rebalance costs.
You do have an overlap now, but if portfolio is not that big it might not make any difference, unless you keep adding to EM as well.
GL with whatever you chose.
Re: Portfolio advice: 32 years old, Greece. Should I simplify or not?
Well done at such a young age
Sensible choices over which one could quibble but basic structure is very sound
Now work hard at your day job, invest as much as you can ,keeping this chosen Asset Allocation intact as you invest new money and live frugally
Constant reading and learning is good and will only reinforce your initial good investment decisions
xxd09
Sensible choices over which one could quibble but basic structure is very sound
Now work hard at your day job, invest as much as you can ,keeping this chosen Asset Allocation intact as you invest new money and live frugally
Constant reading and learning is good and will only reinforce your initial good investment decisions
xxd09
Re: Portfolio advice: 32 years old, Greece. Should I simplify or not?
The portfolio amount is currently at 10,000 EUR. I guess that commissions would not hurt that much.
Indeed, I plan to sell the VFEA and go full VWCE for the stocks part of the portfolio, after everyone's advice here. Thanks!