Asset Allocation

How different does that chart look if you reset the zero point to (say) 2001, or 2007?

 

So, 50 and the world didn’t end, ya. Just yet another birthday where I’ve failed to feel anymore mature and wise. It might just be me but I think this bit between Juvenile and Senile is feeling like a plateau, I expected it would feel more like an upward slope or a peak of maturing, noticeable changes like when you were growing as a kid but it does seem to be working out that way for me. I still feel mentally pretty much the same as 20, sadly though I wonder who the hell is in the mirror sometimes and why does he have hair growing out his ear.

Thanks for those that wrote encouraging things following my last post. As you could probably tell I was having a bit of a “considering the age” mid-life crisis.

I hit one of those points where my surety about some big questions was faltering which was great because I could put a lot of things on the table for review without baggage.

So, lots of thinking past few months and a fair bit of resolutions in my mind, not a great deal of change though.

The no direct shares lasted about 1 day of scrutiny. I was kidding myself that I could replace the mental stimulation. Lots of things I love to do, I love because I don’t do them all the time, I still need my down time at home relaxing to put those other things into perspective. I tried some new down time stuff and everything else literally puts me to sleep – maybe that’s the age catching up. Time to admit addiction to mental stimulation and researching and crunching data rocks my boat.

I have acknowledged that my relationship with further accumulation is what an economist would call negative utility and I’m unlikely to overcome it now, probably embedded a long time ago. Its something I have to manage. To that end, we have brought the kids into the tent way earlier than I earlier imagined. I hope We're not robbing them of the hunger that dove us but stepping into this process I don’t think it will be the case. Their life story will be different than my wife and I. But we decided right or wrong that we don't need to make anything artificial or hidden from them. My wife and I don't know how to do family money, we have bought the kids in so we can all learn together and multi generation success or otherwise realistically comes down to them anyway. I have no apatite for estate planning, complete handover of excess resources in our lifetime is the desire.

Currently surplus investing cashflows are going towards establishment costs of a small business that one of the kids and her partner will run. No idea how things will go and writing of the expenditure from the get-go but they have employed a couple of people and being part of that is a first for me and is very satisfying. (the direct link between investing via shares and usefulness to society is vague enough to not have achieved the same sense of satisfaction prior)

Still don't know what we are doing but contentment is high and the journey continues.

 

Welcome back!@dunno
Should I buy VAE over VGE? I am leaning toward VAE because of China and Korea. 10% of portfolio outside super from the proceed of CCL and trimming of some deadwood.

Why not VGS? I think later I will add but for now, I am hopeful about Asia in the next 10-20 years.

 

Happy birthday @dunno. Welcome to the other side and back to posting - Ive really missed your thoughtful posts. Ii know the feeling about reaching 50. My father died of a heart attack at age 49 and his younger brother died of the same, at age 45 so, medically speaking, i was quite surpised to actually reach the age of 50 some 19 years ago. I think its from not eating my brussel sprouts

 

I read this book a long time ago when i hit 50, no different from hitting 60 ..
Welcome Back..dunno..

 

Hi @Anne11

Little difference both are dominated by China exposure.

VAE marries better with VGS is slightly cheaper and foregoes non-Asian emerging for developed Asia.

International Large cap developed (ie VGS) is the game changer diversification for Australian equity. Just adding Asia to Australia exposure doesn’t decrease your risk exposure anywhere near as much as adding VGS.

But it sounds like you may want to chase expected return more than decrease your risk. Can’t advise on that, you have to own your own bet on risks.

Just from diversification perspective 15% Emerging / 85% developed would be more balanced.

If you buy emerging, you should be prepared to hold very long term and re-balance into it even in China invades Taiwan type scenarios where it will be smashed. If you don’t think you could do that probably better off avoiding. Emerging has high expected return but you’ll earn that return via holding discomfort at times.

I have a view on Asia but I hold VAE for diversification reasons not because of the view. In thirty odd years I will tell you if it was worth it or not.

 

Thanks very much @dunno
I think I know my bias but it is hard to overcome.

 

Welcome back @dunno. Very happy to have you back.

 

In the end didnt go down the unlisted property path using home equity. Psychologically just didnt want to take on debt after paying all debt off in 2020, and didn't feel the lock up was compensated enough to change my view. The obvious dichotomy of holding fixed interest and debt was also all too clear. @dunno thanks for pointing out my BS. Was action bias at play as usual.

Turns out, I'm probably just your basic home paid off, unlevered 80/20 to 85/15 type vanilla operator....but of course I had to do something (no portfolio turnover..promise) and have slightly increased risk with a little more microcap mwahahahahaha

 

Thanks

Not sure I will be much more than an occasional visitor. I'm not seeing much financial content here (might be missing it) to keep me interested, and in reading some of the non financial threads with titles that catch my interest I soon realize there is a dominant consensus voice that I don't relate to at all but can't be bothered debating it.

Going forward, I am likely to use the limited time I allocate to other site. Probably the RR Community as its great for leads into the papers and data that interest me, and maybe just reading not posting.

 

At the core me too.

But I’ve “nearly” made peace with continuing the direct shares, no bonds and discretion around diversification being different to Market Cap Weight.

Unanswered question is whether I will buckle and retreat to core beliefs under extreme pressure. That determines the impact and stupidness of the un-necessary risks I carry.

20K a month was a Tattslotto game I remember being advertised which resonated with me at a formative stage. So long as I can finance that, the authentic me that seeks contentment has won lotto so to speak, so I guess at least financially I have the risk capacity to indulge in mental stimulation via markets.

But something is still slightly jarring, between doing what I “want” and what I think is best. I may never resolve this. Maybe it’s the discomfort that makes it stimulating.

 

Early last year I made the decision to stop making any further investments. I only spend a fraction of the cash that my investments spits out, and could see no clear reason to buy any more shares. It became clear to me that I had become addicted to buying shares, and I wanted it to stop. I did well, but 5 months later I bought some LIC shares. I was disappointed in myself, and then resolved to stop logging into my online broking site. I have been clean since last October.

I am now spending more on stuff, and also making charitable donations. I realised that I have enough, but it was tough (investment was really an addiction for me) and I still occasionally feel nostalgia. Many years ago, a Saudi workmate said, "Every man remembers his first kiss and his last cigarette". I now appreciate this saying.

 

Holy crap, @dunno is back. Brilliant mind to say the least, must start popping in here more regularly again.

Have replaced my addictive desire to reinvest with the desire to enjoy life to the fullest whilst still capable of doing so. So yes some cash still gets reinvested but no longer is there guilt over spending on those things that I’ve hummed and harred about for a long time because I thought them a bit excessive!

 

here's mine. would love to hear your feedback. cheers

 

I won't comment on gold or crypto as neither are my thing, but for the ETF's, generally would recommend either going for the simplicity of the all in one fund (VDHG) or forego simplicity and roll your own. By adding others to VDHG you are effectively placing a bet towards certain countries or sectors.

VDHG is already pretty overweight with VAS, IMO, no need to add more
IEM and VEU overlap with both each other and VDHG. A significant tilt towards emerging markets. Significantly underweight US as a result.

What is your investment strategy?

 

I agree with this 100%.

90% of your stocks should be either VDHG or VAS/VGS. You have a real weird breakdown of various tilts which leads to an overall confusing portfolio. It has been said here a million times, simple is better.

 

strategy is to buy and hold long term, till i have enough to retire on
keep US exposure equal to or less than 20% till prices come down.
i want crypto exposure no more than 2-3% it could either go boom or bust(ok with that too)

i have 15% emerging markets exposure. is that too much?

 

Kinda understand what you are saying?!?! With the above, why have VDHG at all? I think it complicates it and its more expensive than using the underlying regional ETFs.

 

I’m not a believer it trying to predict which country will outperform but if that’s your strategy, why not
20% VTS
25% VAS
3% crypto
10% gold
42% VEU

That’s about 10% emerging markets which is market cap and you can dial up US when ready

 

2021 update: