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Roast Zod's portfolio....
GeneralZod
Posted: 13 July 2017 08:12:13(UTC)
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Right. Here’s Zod’s portfolio.

Pleased to report in the week it’s been up and running, everything in it is up. In fact, the poorest performer is Vanguard 80, which has returned about a score. I’ve actually pumped-in another few thousand to the ‘satellite funds’ this morning (Jupiter India, Sch Brazil, B-Gifford China) but I’ll probably leave things now till Christmas. If this hasn’t turned me a dollar by then, Zod will be furious. In total, there's about £42.5k in there.

(I'll take guesses as to what you think it'll be on Dec 31 2017 and the nearest correct answer will get a pint and a night out with Zod.)

Vanguard 80 50%
Vanguard Pension 2045 12.5%
B-Gifford Greater China 6.25%
B-Gifford International 6.25%
Jupiter India 6.25%
Schroder Brazil, Russia, China 6.25%
Vanguard Emerging Markets 6.25%
Vanguard FTSE 250 6.25%

Now remember. Kneel before Zod.

G.Zod
AJW
Posted: 13 July 2017 10:47:35(UTC)
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25%+ EM would be too risky for me, but good luck to you. Do you not have much confidence in the US market?

I'll have a punt at £45k at year end, but who knows really.
GeneralZod
Posted: 13 July 2017 11:25:38(UTC)
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AJW: Yeah, quite a lot of the Vanguard's are heavy US but you could be onto something: perhaps I should have popped some in...Fundsmith? Thanks for feedback though: if it makes £45k by Xmas, I'll buy you a 4 pack of Special Brew and hand deliver it to your house.
Catch The Pigeon
Posted: 13 July 2017 11:26:27(UTC)
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AJW;48841 wrote:
25%+ EM would be too risky for me, but good luck to you. Do you not have much confidence in the US market?

I'll have a punt at £45k at year end, but who knows really.


He'll have US exposure through the Vanguard LifeStrategy and Pension fund.
GeneralZod
Posted: 13 July 2017 11:44:58(UTC)
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Yeah. Good work. As you can see, I'm keeping away from The UK somewhat right now; too damn unpredictable....
AJW
Posted: 13 July 2017 11:45:43(UTC)
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Catch The Pigeon;48843 wrote:
AJW;48841 wrote:
25%+ EM would be too risky for me, but good luck to you. Do you not have much confidence in the US market?

I'll have a punt at £45k at year end, but who knows really.


He'll have US exposure through the Vanguard LifeStrategy and Pension fund.



Yes, some, personally I would go for more.
King Lodos
Posted: 13 July 2017 12:16:52(UTC)
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I'd say it's too stocks-heavy .. But I like the core-satellite approach .. So half the portfolio's going to give you the market return, and then the Emerging Mkts overweight gives you the potential to outperform, long-term, because these regions are generally cheaper and growing much faster.

Here's Burton Malkiel's personal portfolio (author of Random Walk Down Wall Street):

20% Vanguard Total Stock Market ETF (VTI)
20% Vanguard FTSE All-World ex-US ETF (VEU)
20% Vanguard Total Bond Market ETF (BND)
10% Vanguard Capital Opportunity (VHCOX)
10% Vanguard Emerging Markets ETF (VWO)
10% Templeton Dragon (TDF)
10% Matthew's India (MINDX)

From the article:
"In Malkiel's view, managers in developed markets will be hard-pressed to beat their indexes over time. So he has the bulk of his portfolio's assets in index funds. And Malkiel keeps the majority of the assets in foreign stocks because, he says, foreign markets offer better growth opportunities than the U.S. does."



He's got 30% in Emerging Markets, on top of regular passive exposure through the trackers .. Ray Dalio (runs the world's largest hedge fund) has 60% of his stocks in Emerging Market ETFs.

I've always overweighted Emerging Mkts .. I'm about 30% in my stocks portfolio, and I always hold a certain amount in regions like Russia and Value EM funds because they're really the only things in world that are still cheap .. But you're only rewarded for patience .. There were some really miserable years to be overweight Emerging Mkts not long ago.

Personally, unless you're in accumulation phase, I'd diversify more .. I'd have at least 25% in things uncorrelated to stocks – even if only cash .. There'll come a time again when your performance over 10-15 years will come down more to capital preservation than accumulation – as there always does.

3 users thanked King Lodos for this post.
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GeneralZod
Posted: 13 July 2017 12:33:17(UTC)
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Thanks for response. So, in plain English, what you're saying is "Look, you've got a lot of dollar tied-up here in bits and pieces which looks an Ok selection. Keep some free that you can be sure is 100% secure, even if it's a cash ISA or some bloomin' premium bonds." Is that it?

Actually, I'm sort-of doing that as I always retain a fair £ of cash on the side but I just wanna be clear. Zod is an amateur, remember. Thanks.
Ludditeme
Posted: 13 July 2017 15:09:29(UTC)
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AJW;48841 wrote:
25%+ EM would be too risky for me, but good luck to you. Do you not have much confidence in the US market?

I'll have a punt at £45k at year end, but who knows really.


Then again, Donald may be impeached after pressing the wrong button on his desk whilst trying to order in a pizza. North Korea may have taken out the Fox Islands in retaliation, and Boris Johnson may urge us to invade France again.

If all that comes to pass, I would plan on having about £5K to spend at the end of the year.

Happy Christmas!
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King Lodos
Posted: 13 July 2017 17:32:05(UTC)
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GeneralZod;48850 wrote:
Thanks for response. So, in plain English, what you're saying is "Look, you've got a lot of dollar tied-up here in bits and pieces which looks an Ok selection. Keep some free that you can be sure is 100% secure, even if it's a cash ISA or some bloomin' premium bonds." Is that it?

Actually, I'm sort-of doing that as I always retain a fair £ of cash on the side but I just wanna be clear. Zod is an amateur, remember. Thanks.


As far as stocks go, the simplest way to view it is that the FTSE World tracker, or the Lifestrategy fund, gives you everything.

You're already holding India, Russia, etc. in proportions the market deems best, and whatever becomes the largest economy in the future, you'll be holding more of that .. Great system – hard to beat.

So when you add an India fund, all you're really doing is changing the weightings .. And whether that's a good idea or not comes down to whether you think the market is under or overestimating India's potential .. Statistically, as many people get those bets right as wrong .. Where there can be an advantage to overweighting a region is when it's cheap – Brazil, Russia, China would qualify .. But the time period over which cheap generally reverts towards fair value, in markets, is about 15 years – so you'd have to be prepared to stick with the weightings for 15 years, and what you're be earning is a premium for taking on more risk (accepting a wider possible range of outcomes), and being more patient .. Meant to be a really short post – gone really complicated already
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Tim D on 14/07/2017(UTC)
GeneralZod
Posted: 13 July 2017 20:26:21(UTC)
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Lodos: I get what you're saying. In effect, with a fund like Vanguard, you already have exposure to, say, Asia, so what the buggering hell what you wanna buy into China for...? Except, as you put, you may if you feel that that's a particular region likely to strike, er, gold in the coming months/years. This is where, of course, even the most experienced investor can make errors but India has been ££ for me for sometime, and I know many ppl say it's going to become a superpower in time (!). THAT said, it has some serious corruption and the levels of inequality there are...OMG. Someone on here took the pee a bit sometime back about India, saying it was very high risk and why would you wanna back a crippled donkey? But, is it really any higher risk than the UK or even the US right now? Gosh, that's a question. Meanwhile, the article on China on today's Citywire is interesting. On the one hand, it's still going rather nice price-wise. On the other, national debt levels there are eye-watering. Risky but very tempting.

So what do I do? Do what I've done. Put in some additional dollar but keep it real. Not too much. The majority can say with Van-G. I did that very thing with gold last year and nearly - not quite - doubled my money.

Anyone here seen that film ARBITRAGE? Good movie. Richard Gere millionaire city boy who gets drunk one night, gets on Fidelity.com and pumps all his money into a Russian Copper mine fund. He blows the lot. It's a really decent film.



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Tim D on 14/07/2017(UTC)
King Lodos
Posted: 13 July 2017 22:32:16(UTC)
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I like Wall Street films and that's actually one I hadn't heard of.

And yeah, the big lesson with active investing is it's not reality you're betting on, but rather whether the market's perception of reality is wrong.

So for example there's virtually no correlation between a country's GDP growth and its stock market returns .. Which surprises people, because growth in an economy usually drive stocks higher, and where else do returns come from? .. But of course the market's already pricing in all the growth it expects, from all the information, so as George Soros says: "Money's made in the market by discounting the obvious and betting on the unexpected".

Many would say trying to outguess the market is futile (unless you've got insider knowledge – if you watch Billions, that's how Axe Capital does it).

So what academics look for today are anomalies in how this system processes information .. So we can say maybe it tends to overestimate risk at certain extremes, and maybe it exhibits momentum, and information spreads through the system with a lag, and perhaps you get emergent behaviours through sheer complexity and human behaviour.

The principle of Value investing (which might include adding extra Emerging Mkt exposure), might be that markets have already priced in everything that's knowable, but the further into the future we forecast, the more chaotic prediction becomes .. So assuming good and bad events balance each other out, the original price you paid for something eventually become one of the few predictive bits of information we have about it .. Another way of looking at it is you're being compensated for patience.
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Tim D on 14/07/2017(UTC)
Mickey
Posted: 14 July 2017 00:24:09(UTC)
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Ludditeme;48863 wrote:
... and Boris Johnson may urge us to invade France again....

Nah, Boris is too busy ramping up a war with Russia to be bothered with France.

Back to the portfolio, it would be handy to know what % this represents of total assets as in isolation any comments must surely be a little uninformed.
sandid3
Posted: 14 July 2017 06:06:27(UTC)
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GeneralZod;48879 wrote:
Anyone here seen that film ARBITRAGE? Good movie. Richard Gere millionaire city boy who gets drunk one night...

It is a good Wall Street film but as I remember it, the moral of the tale is that if you cheat your wife and family and you cheat someone buying your company there will be consequences. His wife took him for every penny in the end.
jvl
Posted: 14 July 2017 08:34:39(UTC)
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King Lodos;48847 wrote:
I'd say it's too stocks-heavy...


In this particular case, surely not.

Don't forget that GeneralZod is a teacher and so gets a defined benefits pension linked to his final salary, rising in line with inflation. He "is" bonds/cash.

With that in the bank, he could dip a toe in Zambian shares and the three-legged nag in the 2 o'clock at Doncaster...
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King Lodos
Posted: 14 July 2017 12:13:44(UTC)
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jvl;48891 wrote:
King Lodos;48847 wrote:
I'd say it's too stocks-heavy...


In this particular case, surely not.

Don't forget that GeneralZod is a teacher and so gets a defined benefits pension linked to his final salary, rising in line with inflation. He "is" bonds/cash.

With that in the bank, he could dip a toe in Zambian shares and the three-legged nag in the 2 o'clock at Doncaster...


I think it depends how you regard cash savings and money coming in .. If most of it's paying bills, or your portfolio's grown much larger than your annual contributions – not to mention how difficult it is for most people to buy when markets look terrible – you've still got that problem of a portfolio that could take a huge knock.

Ben Graham said "Never more than 75% in the market; never less than 25%" .. I don't think there's any advantage going above 75% .. I've had to use LT bonds here cos the data for global bonds didn't go back far enough – but you'd do better with 25% in gold .. 100% stocks vs 75:

http://i.imgur.com/Yr38EEn.png

PaulSh
Posted: 14 July 2017 12:36:04(UTC)
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Far too much China in there for my liking. Events may start catching up with China as soon as next week as Trump gave them 100 days to sort out North Korea and that's almost up now.
GeneralZod
Posted: 20 July 2017 15:04:59(UTC)
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Too much China or not, my portfolio is ON FIRE. I've made well over a grand in the space of the 8 or 9 days it's been running!! Every one of my 'satellites' bar that Blackrock UK one is up (a tenner down as of yesterday) and the Schroeder Brazil-China punt has been doing very, very nicely. Vanguard 80, where 50% of the entire folder sits, has also proved a Zod-pleaser so thank you to you people who pushed me in that direction. Vanguard 2045 has been very good and I'm also loving life in the developing countries. India has slowed a little.

So far, so good. :)

Now remember:

Kneel before Zod.
Mr Helpful
Posted: 20 July 2017 15:13:03(UTC)
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GeneralZod;49041 wrote:
my portfolio is ON FIRE. I've made well over a grand in the space of the 8 or 9 days it's been running!! Every one of my 'satellites' bar that Blackrock UK one is up (a tenner down as of yesterday) and the Schroeder Brazil-China punt has been doing very, very nicely. Vanguard 80, where 50% of the entire folder sits, has also proved a Zod-pleaser so thank you to you people who pushed me in that direction. Vanguard 2045 has been very good and I'm also loving life in the developing countries. India has slowed a little.

So far, so good. :)


Noticed also up-thread General
" I'm keeping away from The UK somewhat right now; too damn unpredictable...."

Suggests General that only 'reliable Stocks' that are always going up being sought ?

Repeat after Mr H, "Volatility = Opportunity = Good".
and "whether up or down !"

If we wanted predictability then we would stick our money in Savings Accounts paying sub-inflation interest rates.
Can't beat that for predictabilty !

Thanks for the update from the front.
Watch the flanks.
markus
Posted: 20 July 2017 16:21:40(UTC)
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GeneralZod;49041 wrote:
Too much China or not, my portfolio is ON FIRE. I've made well over a grand in the space of the 8 or 9 days it's been running!! Every one of my 'satellites' bar that Blackrock UK one is up (a tenner down as of yesterday) and the Schroeder Brazil-China punt has been doing very, very nicely. Vanguard 80, where 50% of the entire folder sits, has also proved a Zod-pleaser so thank you to you people who pushed me in that direction. Vanguard 2045 has been very good and I'm also loving life in the developing countries. India has slowed a little.

So far, so good. :)

Now remember:

Kneel before Zod.


Vanguard Retirement 2045 is near identical to LS80% albeit with slightly higher charges (0.24% vs 0.22%)

I'll wager you'll ditch Vanguard retirement 2045 before the retirement feature of "free" rebalancing into bonds takes place.
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