Panic selling is something I flushed out of my system in 2008. A week after I poured all our savings into the market, we “lost” 25% of it on paper. It cost me months of discussions at home and foregoing many “this time you sell and never invest again” conversations - ultimately, we recovered and then some. I am a buy-and-hold (is that what they call a hodler?) investor, so trying to be measured on entry, as exit is not in the cards for the foreseeable future.
As a question of principle, what’s the rule of thumb: 1/3 each month till end of year, or all in?
Undusting this thread as we are adjusting to Trump 2.0 and a big makeover of the geopolitical situation while markets continue to trade close to record highs.
What does your investment portfolio look like now and what are the trends you are anticipating? I am shifting away from US and growth into cash, short term treasuries and “value”. But I am unsure I am doing the right thing.
Maybe. But US stocks have been overvalued for a while and yet sentiment is super bullish. Which I find very hard to reconcile with the growing political instability.
Yes, they have been over-valued for a while, but I feel Trump doesn’t really change that. If anything, his instincts is to juice the market more and he will push for tax cuts and de-regulation which all else being equal is positive for stocks.
Of course, he could also trigger the whole thing to blow up with his antics, but after his first term, people maybe people are now desensitized to his antics.
The chaos monkey that is the new US administration is a blessing and a curse. I am looking to park my last bonus and am drawn to VGT as a growth ETF; sadly, it overlaps 95% with my QQQ, which makes is a slightly cheaper (TER) more-of-the-same…
Since I bought BRK-B, it went up 10%, so my vision is distorted seeing it ‘expensive’ all of a sudden
As always, long investment horizon - where can I find me some growth that is not more-of-the-same?
You then need to look for once in a lifetime opportunities as I got with Apple in 2013, nobody wanted it as it was never going to be a trillion dollar company again. Stripping out the cash the PE was around 6 & it was the most valuable trademark in the world. Everybody on the old forum said I was mad as I was prepared to invest 90% of my net worth in Apple, I never got there as the price rose to quickly.
Any Growth or even Large market cap fund will have huge overlap as those are the liquid stocks you can actually deal in large quantities. Remember with highly rated tech stocks, it took 15 years until 23 April 15 for the NASDAQ to hit 5060, where it was in 2000
Look closer to home, e.g. ISIN CH0130595124. SPI mid and small caps have performed rather well, and without the (direct) currency risk you have with QQQ et al. Germany’s recession over the last 2-3 years shows, but that might well be a thing of the past given the incoming government’s announced spending spree.
A 5-yr gain of 40%? Uhm… I must have different perception and scales of growth, looking at 100+% over 5 years. XLY is another one I am considering as broad coverage but with recession looming on the horizon, I am not sure if consumer discretionary will fare as well as the past 5-10 years.
Fair points and accumulated wisdom, as always - I am grateful to have you replying in this thread. Once in a lifetime. Apple. The only thing that comes to mind is bitcoin - everyone thinks it is crazy (check), once-in-a-lifetime (check), ten years from now it will be 20/20 hindsight (could go either way). Let’s see how deep the bears go after the Trump Pump of “strategic BTC reserve” gone sideways
In all honesty, time is a factor: nuggets like Apple are hard to match for the desktop newbie investor, when surrounded by AI robo-advisors that sniff out value and both put/call in a span of milliseconds, while I casually chat away on forums a few times a week. This perhaps to explain my pull to ETFs and why I buy+hold and then not look to flipflop on change of market directions…
I think you may misunderstand currency risk of equities, Nestle for example earns 2% of its profits in Switzerland & more than that from India, but shareholders don’t fret about the Ruppe, it merely books it’s global profits in CHF, for a Swiss person this is a CHF currency risk, for a foreign investor there is only 2% exposure to CHF so the Swiss Franc is irrelevant.
Apple, Amazon, Microsoft Google etc all earn money globally so USD currency risk is not that important to them, although many will think it is. If the USD drops, profits in USD will be higher so the share price will rise. Moral of the story is don’t use a currency hedge when buying international equities.
You have to take the opposite view to the noise, most people like to agree on an investment. When I first mentioned Fundsmith on the ol;d forum everyone said they would not invest until they had a 5 year or 10 year track record, once they were the no 1 fund over 10 years people got excited & the performance has been disappointing since. I am sure 5 years on it will be back in the first quartile & have no intention of reducing my huge position, several multiples of that I have invested with them, Investing takes time, just people want to get rich quick.
I seek to learn and improve myself. I invested into BRK-B after that mental note I made to myself upon your mention of it higher up in the thread.
I am now equal parts:
BRK-B
SSON
Fundsmith
QQQ
The new cash I am trying to park puts me in front of a new decision for me: go 20% across 5 positions, or increase one of the 4 (or maybe top up each of the current four)?
Years ago a MotleyFool article left an imprint on me, saying that beyond a certain number of portfolio positions diversification decreases (in our interconnected world). It advocated simple portfolios, 4-5 positions max.
I wonder if this is still true, and if the current 4 are enough?
Even if you have an individual stock portfolio, once you have 25-30 stocks you are diversified, managed funds with 100-200 stocks will usually underperform the index they are trying to beat.
Berkshire SSON & Fundsmith have a small amount of diversification because the fund managers have a good idea of what they are doing. Buying more means you will know less about the business’s you are investing in & they won’t be your favourite investment, 35% of the S&P500 is in 7 stocks, when most people would believe there is less than 1% in each company!
Plus 2% distribution and no direct currency risk, that’s far from bad. Not least considering the influence of Germany’s anemic economy, which seems bound to change.
That’s why I said no direct risk. Of course there is some level of that for the individual companies, that gets managed by a couple hundred CFOs. You will have some internal balance of costs and revenue to reduce the exposure, possibly to a much bigger extent than is apparent from the outside.
Btw the SMI companies are neither small nor mid caps.
