Portfolio advice: 32 years old, Greece. Should I simplify or not?

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whi21
Posts: 3
Joined: Fri Jul 16, 2021 5:05 pm

Portfolio advice: 32 years old, Greece. Should I simplify or not?

Post by whi21 »

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)

_______________________________________________________________

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%)
_______________________________________________________________

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?
Siaigi
Posts: 129
Joined: Sun May 17, 2020 4:24 am
Location: Italy

Re: Portfolio advice: 32 years old, Greece. Should I simplify or not?

Post by Siaigi »

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.
Spgold
Posts: 85
Joined: Fri May 10, 2019 4:52 am

Re: Portfolio advice: 32 years old, Greece. Should I simplify or not?

Post by Spgold »

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.
xxd091
Posts: 492
Joined: Sun Aug 21, 2011 4:41 am
Location: UK

Re: Portfolio advice: 32 years old, Greece. Should I simplify or not?

Post by xxd091 »

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
Topic Author
whi21
Posts: 3
Joined: Fri Jul 16, 2021 5:05 pm

Re: Portfolio advice: 32 years old, Greece. Should I simplify or not?

Post by whi21 »

Spgold wrote: Sat Jul 17, 2021 2:32 am 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.
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!
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