Asset Class Quilt

Discussion in 'Shares & Funds' started by Redwing, 24th Jan, 2020.

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  1. Redwing

    Redwing Well-Known Member

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    Assets at the top of the chart one year could be at the bottom the next, and vice versa. Much of this is due to reversion to the mean. But over the long-term, those big swings even out. The chart shows annual returns for eight asset classes against a diversified portfolio. Diversification works to smooth out those big swings in the short-term. While you’ll never get the biggest gains of any year, you avoid the huge losses.
     
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  2. Redwing

    Redwing Well-Known Member

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    After hitting a peak in April 2011, Russian stocks dropped 56 percent, last year however Russia’s stock market was the world’s best performer in 2019; It gained 53.2 percent.

    The Iron Curtain Index via VanEck Vectors Russia ETF (RSX) beat Vanguard’s American Total Stock Market Index (VTSMX) over the five (5) years from 2015-2020

    portfoliovisualizer.com
     
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  3. Nodrog

    Nodrog Well-Known Member

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    So does this suggest you’re considering adding EM to your portfolio?
     
  4. Redwing

    Redwing Well-Known Member

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    Not quiet there yet :D

    VEU has 23.1% Emerging Markets though

    Europe 41.4%
    Pacific 28.3%
    Emerging Markets 23.1%
    North America 5.9%
    Other 1.0%
    Middle East 0.3%
     
  5. Nodrog

    Nodrog Well-Known Member

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    But you no longer add to VEU?
     
  6. Redwing

    Redwing Well-Known Member

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    True that, VEU just ticks along

    Of recent years its been VGS, looking at Sharesight VEU has returned 10.79% cap growth and 4.25% dividends over time held for TSR of 15.04%

    I get tempted every now and again to tilt i.e. UK as a developed market has a low CAPE compared to the US, but these thoughts are fleeting as I just stick to the plan
     
  7. Nodrog

    Nodrog Well-Known Member

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  8. Redwing

    Redwing Well-Known Member

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    Update from Vanguard Australia yesterday

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    also

    30-year index chart

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    How extra investments add up over time
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    Source: Andex Charts Pty Ltd. Data based on annualised returns since 1990.

     
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