Portfolio Advice

[edee]

Hi all,

I am building my boglehead portfolio and I am thinking about two options:

PORTFOLIO 1
90 % - SWRD - SPDR MSCI World UCITS ETF (TER 0,12)
10 % - EIMI - iShares Core MSCI Emerging Markets (TER 0,18)

PORTFOLIO 2
40 % - SSAC - iShares MSCI ACWI (TER 0,20)
60 % - VUSA - Vanguard S&P 500 (TER 0,07)

First option is a well-known EU boglehead classic. Second one is more performance oriented with a tilt towards US market.

I am 24 y.o. Slovak and currently I can invest 200€/month. I do not consider bonds since I am still young, willing and able to take the risk.

What do you think? Which portfolio should I pick? Any advices?

Thank you! Have a nice day!

 

[dub_97]

@edee Hi, Slovak here. Unless you want to fill taxes every year I would avoid ETFs that distribute dividends. (VUAA instead of VUSA)

Your post confuses me a bit since you seem to understand markets but I think 'VWCE and chill' is still general consensus of this subredit.

 

[abiah]

@dub_97 Sometimes people don't have access to a broker that provides Vanguard, but _does_ provide iShares. I believe the iShares ACWI is quite similar to the VWCE, no?

 

[edee]

@abiah Hi, yes, both VWCE and SSAC track large and mid cap stocks in developed and emerging markets. However, SSAC accroding to MSCI and VWCE to FTSE index.

 

[edee]

@dub_97 Hi Dodo, thank you for pointing this out. Definitely I want acc ETFs, just made a mistake there and did not check properly that VUSA is distributing.

VWCE and chill is interesting, but I find a 2-3 fund portfolio more appealing.

 

[lovelygrace]

@edee Why? With more than one funds you might be tempted to tweak your allocation when one of them is underperforming for some time. This equals to performance chasing which lowers your expected returns.

If you have the choice to combine multiple funds into one, with reasonable cost, take it. VWCE doesn't cost a lot more than the combination of those two, so I would choose VWCE personally.

 

[edee]

@lovelygrace Hi, as I suggested in other comments, I will go into:
80% SSAC or VWCE / 10 % IUSN / 10 % VUAA. Maybe even without IUSN with VUAA at 20 % which would leave me with a 66 % US exposure.

 

[iamriteone]

@edee I actually have never seen those tickets before, except for VUSA lol.

You could also do VWCE (all-world index accumulating consisting of about 3800 companies, excluding small cap stock). Then add IUSN (all-world small cap). And if you want to have more exposure to USA, then you could try VUAA (S&P 500 acc). Or if you want more exposure to emerging markets then you could try VFEA (acc).

Another one that I see quite often is this: IWDA (developing countries) + EMIM (EM) + IUSN.

But those you mentioned I don’t really know about.

I see you have €200 a month to invest, so maybe you could do IWDA + EMIM + IUSN. But I’m just here to provide information, and you could decide yourself what you wanna do, maybe I suggested more options than you thought would exist and then you research further and maybe you can decide what you want.

 

[edee]

@iamriteone Hi, thank you for these alternatives, I was thinking about them too. I think I will go with the first one you suggested: 80% SSAC (or VWCE) / 10% IUSN / 10 % VUAA.

 

[victoriase49896]

@edee SSAC (or VWCE) plus VUAA instead of VUSA. You determine VUAA percentage. I personally wouldn’t go beyond 30-40% VUAA myself

 

[starlight541]

@edee Hey! I already have a simple 70%/30% Porfolio with MSCI WORLD and MSCI EM. Performance so far is good, relatively stable and most importantly, very wide diversified! Been like this since 2020. Also 200€ per month!

 

[mlevans]

@edee Do you think that stocks will perform well over the next 3-5 years?

In the current meta with rising inflation and a stock market that has only gone up for most of 14 years I'd recommend adding some commodities.

Personally I am currently at 0% stocks and 50% commodities and inflation protected bonds each.

 

[edee]

@mlevans Hi, thank you for your comment. Currently I am saving up some money (as I said 200€/month) and have not invest in anything yet.

I was thinking about buying gold first and then invest in stocks. So, everything is open for me right now and I am thinking long and hard where and how to invest.

 

[mlevans]

@edee With 200.- € a month I'd take a close look at the trading conditions and prices. Otherwise 10% of anything might be quite expensive. Basically the most important part when you start is that you save. Your saving´s rate will be the prime source of asset growth for quite some time.

If i were you, I'd choose one fund 100%. An MSCI world ETF is quite diversified, so not the worst choice.

 

[mlevans]

Thanks for the downvotes. Apparently people think that investment will stay the same forever, and that the stock market will never ever correct again for 50%.

Inflation is rising, real estate is overvalued in Europe, and the stock market is overvalued in quite a few key long term metrics. Commodities are a good investment during inflationary times and have outperformed stocks significantly in recent months.

 

[all2jesus]

@edee Portfolio 2 is good. American exposure historically outperforms rest of world. I think most people will recommend portfolio 1 due to brainwash.

 

[bethlehem57]

@all2jesus I am giving a downvote for the second sentence.

 

[all2jesus]

@bethlehem57 Thanks appreciate it

 

[erekyth]

@all2jesus I’m upvoting you because I also can’t understand this whole sub going all-world even though it underperforms historically compared with sp500. I’m not American by the way

 

[all2jesus]

@erekyth Same here. British.