Redistribution strategy after 1st year with ETFs - portfolio feedback please

Discussion in 'Shares & Funds' started by d3outguncom, 4th Apr, 2021.

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  1. d3outguncom

    d3outguncom Well-Known Member

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    I am coming to the end of my first year as an ETF investor. Firstly thank you to everyone who contributes to this forum, especially @Redwing, @Fargo, @Wombat, @SatayKing, @dunno and probably too many others to mention. The plan was to look at whether it was worth selling anything after the 50% capital gain reduction kicks in to redistribute gains to other ETFs that may have better potential in the following year.

    The current strategy is a core (80%), satellite (15%) and speculative (5%)

    The portfolio currently site at:

    Code Profit/Loss (%) Weight
    VAS 17 41.82%
    VGS 17 41.67%
    WES 5 4.15%
    ACDC 3 3.72%
    NDQ 0 3.60%
    RAC -7 2.26%
    DUB 11 1.09%
    SOL 13 0.94%
    CXO -4 0.32%
    LTR -7 0.31%
    CLU -11 0.11%

    Some questions I have are:
    For rebalancing how do you decide when you have extra cash to invest which one you will invest in this time?

    For example, if someone believes the next year looks better for value focused companies, would you put into VDHG rather than VAS? Do you have a core/satellite strategy that puts 80% into total index funds (e.g. VAS/VGS) and 20% into tilts in certain industries (e.g. ACDC)? If so, how do you choose which ones you will put into this time?

    Or is it by weighting to keep your portfolio at its target weights? Or by % below moving averages for better capital yield?

    Would love to hear how people choose which ETFs they purchase when they have spare cash, or are rebalancing, and any feedback on portfolio or strategy as mid-May will be 1 year into investment.

    Thank you
     
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  2. Hockey Monkey

    Hockey Monkey Well-Known Member

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    Try to become a level 3 investor (from Why not just invest everything in the US market? — Passive Investing Australia)

    Market timing seems to make a fool out of most of us.

    Level 1 investors buy what has been moving up, only to find the market reverts to its mean.

    Level 2 investors try to outsmart the market by buying what has lagged, only to find the market continues along its run for longer than you ever thought possible.

    Level 3 investors realise that nobody knows anything, and they just buy the whole lot and stop trying to outsmart the market. At least they are guaranteed not to be made a fool of by the market and instead can get the market return and not less.
     
  3. Oats

    Oats Well-Known Member

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    I have a spreadsheet that calculates my weighting’s and I buy whatever is further from the plan
     
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  4. d3outguncom

    d3outguncom Well-Known Member

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    Thanks @Hockey Monkey, I guess we're all trying to get that "Hockey Stick" :)
     
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  5. Hockey Monkey

    Hockey Monkey Well-Known Member

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    Your profit/loss of VAS/VGS compared to the rest tells a story on how that’s going ;)
     
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  6. Big A

    Big A Well-Known Member

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    My plan is 50/50 VAS/VGS. Last few months I have added slightly more to VAS over VGS. This was purely because international has had a stronger run and I believe Aus will catch up at some point soon.
    So far I have been wrong and international continues to be performing better than Aus. For now anyway. When that will change is anyone’s guess.
    Once again I return to the same conclusion. Stop trying to tinker with the plan and just go 50/50 and let the market do what the market does.
     
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  7. SatayKing

    SatayKing Well-Known Member

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    As I'm not into precision guesswork I'm not qualified to say what may or may not happen tomorrow let alone in a year's time when it comes to the share market. Keep it simple and diversified according to your determined Home v International allocation is the best I can suggest.
     
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  8. twisted strategies

    twisted strategies Well-Known Member

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    i am unfamiliar with some of your holdings so will not comment on them

    both VAS and WES have DRPs would that be better for you than adding extra cash regularly

    investing extra cash ( for me ) depends of price and future prospects , i CAN become pessimistic on a holding from time to time ( and yet buy up carefully a different holding during the same market dip .)

    is a mathematical rebalance a good thing ( for you ) , i prefer to let holdings grow at their own rate ( unless they turn toxic , say like AMP , or ORG ) , and adding extra cash when a sensible opportunity arrives .

    all that being said , i have in the past slashed a holding when it has been absurdly outsized in the portfolio ( PME i sold 90% , MQG i sold 66% , WOW i sold 80% as examples )


    i guess it depends on which you trust most , your calculator or your instinct ( i use both in making my decisions , roughly equally )

    if regular rebalancing appeals to you maybe an ETF like MVW ( equal weight on selected ASX 'blue-chips ) will have it's charms ( if parking extra cash )

    when and where to park that extra cash ... that is the magic question ... what suits me may easily scare you ,
     
  9. Redwing

    Redwing Well-Known Member

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    @d3outguncom see also the Optimal Portfolio response

    With rebalancing I always try and bring my AA up to set % if rebalancing bands breached, if not I'll usually top up the lagging index, nice and simple and easy to execute for me, the pklan that you can stick with is probably the best plabn for 'you'

    As @SatayKing says, IAAM.

    upload_2021-4-4_14-5-11.png
     
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  10. SatayKing

    SatayKing Well-Known Member

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    You inadvertently omitted the prefix so I fixed it for you.
     
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