New portfolio, would love feedback

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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jbonne84
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New portfolio, would love feedback

Post by jbonne84 »

Bit of background. I'm in my early 30s and fortunate enough to have a few million to my name. I used a few advisors in the past such as PHN & RBC DS and both have just taught me that investing publicly is not that tough providing you control your emotions on the downs and both charge me currently 1% to primarily just buy RBC or PHN funds which consistently return bland results over many years... :(

Anyways, I'm very analytical and work in tech so researching and organizing this wasn't tough. Most of my money is in USD with a bit in CDN and I would likely prefer to keep it that way unless I'm CDN bullish long term (which I'm not). I don't plan on living in the US currently but that may change in a few years. Anyways, here is what I was thinking.

US Large:
SPY 20%
QQQ 10% - slightly high but I'm in tech and obviously bullish in this category

US Mid:
IJH - 10%

US Small:
IJR - 10%

Canadian Equity:
ZLB - 2%
VCN - 3% - I like VCN combo'd with ZLB to better complement the mixed years
NCE721 - 5% (actively managed small/mid but a very strong management team)

Fixed: (I wanted a mix to smooth out some of the ups and downs)
ANGL 4%
HYG 4%
LQD 4%
PMO005 4% - pimco monthly income managed
FID255 4% - fidelity high yield managed

Global/Foreign:
ACWV 15% - I know it's 50% US but I adjusted it to a higher number to compensate for that
VEA 10%

Any thoughts on what I should consider tweaking?
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gobsmack
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Re: New portfolio, would love feedback

Post by gobsmack »

This other thread may offer some ideas: http://www.financialwisdomforum.org/for ... 9&t=118600

Given that you have no plans to live in the US, it may not make sense to keep the fixed income portion of your portfolio in USD. This is because the gains are likely to be small and, as a result, the forex rate will end up dictating most of your returns.
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AltaRed
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Re: New portfolio, would love feedback

Post by AltaRed »

I think your numbers add to 105%, but that isn't the issue. The issue to me is way too much slicing and dicing.
- I'd not have have any ETF/Fund holding at leass than 10%
- SPY and QQQ overlap. Why not just SPY?
- Unless you are specifically wanting to slice and dice by overweighting mid and small caps in USA, you could capture all of the USA in VTI
- I'd only hold one entity for your 10% Cdn equity allocation. The nuances you have will be mostly noise.
- Fixed income is also overly sliced and diced. You could limit to 2 holdings.
- Same with International - VEA will do it all

I think you worry too much about smoothing volatility. That is what your Equity/Fixed allocation is for. If you love analysis, I''d suggest you dvelope a 10 year composite chart of all your proposed holdings and see what the aggregate curve tells you. Then build another chart with VTI (50%), XIU (10%, VEA (20%) and perhaps XBB (10%) and look at the difference over a 10-15 year period. Be sure to include total returns, not just stock market prices.

Added: My proposed allocation works for a $100k, $1million, or a $5million portfolio of ETFs.
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ig17
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Re: New portfolio, would love feedback

Post by ig17 »

jbonne84 wrote:Any thoughts on what I should consider tweaking?
Reduce the number of funds. The slicing and dicing is excessive and very unlikely to add value in the long run.
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Peculiar_Investor
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Re: New portfolio, would love feedback

Post by Peculiar_Investor »

I'd echo the previous viewpoints that there is probably too much slicing and dicing. After reading it over a couple of times I still cannot figure the basis thesis or investment policy statement driving this portfolio.
jbonne84 wrote:QQQ 10% - slightly high but I'm in tech and obviously bullish in this category
Been there, done that. My spouse and I both worked in the tech industry through the dot com bust. My recommendation has always been to diversify away from your employer and employment sector. Your job (paycheque, stock options?, company investment plan?) is already tied to the employer, so if you're also investing in the company's stock or the sector, you've concentrated your risks too much IMHO. Also worth reading Don't Invest Much In Your Employer Stock - Business Insider
Business Insider wrote:Think of it this way. If you work for a company, you are basically already an investor there. You are taking a risk on the fact that they'll succeed and you'll be gainfully employed for the long haul. If they go under, you will lose your income and, in some cases, your benefits, too.

If you've got 20 percent of your retirement savings also tied up in the machine, then that's putting even more of your finances at stake.

Moshe Milevksy, a finance professor at York University in Toronto, has long advised individual investors against this path. He recently told Reuters' Lewis Braham the wiser option would be to steer their stock choices in the opposite direction of their industry altogether (more specifically, in "individual industry-focused exchange-traded funds to cover every other sector in the market but their own.").
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