Investment allocation - getting the balance right

Discussion in 'Share Investing Strategies, Theories & Education' started by Sick_of_scams, 3rd May, 2020.

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  1. Sick_of_scams

    Sick_of_scams Well-Known Member

    Joined:
    31st Mar, 2018
    Posts:
    121
    Location:
    Gold Coast
    Hi investors.

    I am looking at my self funded retirement investment spread and I wanted to get ideas from others as how they decide what percentage of their wealth do they allocate to certain investment classes.

    I currently hold 13% cash - is enough to live off if really needed for the meantime.

    I have 15.5% in P2P lending (not feeling good at moment with all the job losses going on)

    Superannuation 2.5%

    Property 39%

    Shares 30%

    (You may say that shares exposure is actually 32.5% as Super is mainly share allocation)

    I am feeling very nervous right now as all my investments other than cash are exposed in a risky environment.
    P2P 'RateSetter' CEO released data assuring that loan defaults remain low, tighter borrowing requirements and a healthy provision fund for loan defaults. So, I am hoping that even worse case scenario, that I would not lose too much there.

    Shares are my greatest fear. 45% in a managed fund and 55% in my own managed portfolio. My holdings are mostly large cap with some mid cap and strong balance sheets. I am a long term hold investor but right now I am not confident and foresee further large corrections and a long term recovery. My fear is that this recovery may take many years.

    Property is my next fear with talks of a property crash that could be as high as 40%. That is severe. And my rental income has already been reduced due to COVID19 to the point it is basically just covering running costs.

    Any suggestions? Thanks.
     
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  2. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    1,461
    Location:
    QLD
    welcome to InvestChat ,

    gee allocation ..

    currently i have some property ( i never guess at the value they have been in the family for over 40 years and no mortgage )

    luckily i put a solar array on each property and they generate a positive return , even when the tenant isn't working

    but i am pretty sure the state government has messed with the incentives to install solar now , so the new deal might be not so attractive , now

    my only current exposure to interest-bearing securities is via two LICs , i have had in the past direct holdings in interest-bearing securities ( up to 25% ) but they have matured or been redeemed and have not found suitable replacements

    so ignoring the property , i am about 95% invested in shares , REITS , LICs and ETFs using the REITs as pseudo-bonds

    feeling concerned is natural ,
    this might be truly historic times , nobody can remember when half the world is in lock-down PLUS both a demand shock AND , a supply shock add, an oil price war , and epic debt liabilities in MOST of the developed world

    if this happened to one major market ( say Japan or EU ) that would be BAD , but nearly every major market AND a trade war ( two if you count oil ) makes this terrible

    i see a similar near-term to you , but remember history will give you SOME clues

    try to stockpile some cash and keep watch for bargains ( property , shares , collectibles they could be anything )

    if we have a second fall of 40% in the coming 12 months , i would expect some more forced selling

    i like interest-bearing securities but NOT at any price , they HAVE TO BE good value , the market is awash with risk , i don't even put cash into term deposits at 2% interest

    arguably a wise person might have hidden a few gold bars under the bed , but that is probably too late now

    i suggest save extra cash if you can , research and WAIT

    you could always plant a vegetable garden and save some cash that way

    cheers and good luck
     
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