Asset allocation in a US stock market bubble
- Thread starter Flybytheseat
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I think you'd have to combine a few funds to get this. E.g. put 75% of your money in the Standard Life Global Equity fund and the remaining 25% in some other fund(s) that don't have US exposure. The Global Equity fund is broken down as follows:
North America Equities 66.6%
European ex UK Equities 11.4%
Emerging Markets Equities 10.9%
Japanese Equities 5.1%
UK Equities 3.3%
Asia Pacific Equities 2.4%
Other 0.3%
So if 75% of your money is in it, then you're 50% exposed to North America (assuming your other 25% has no North American exposure).
But I think the disadvantage of this approach is that each fund taxed separately. So any losses on one fund can't be offset against gains on another one. I'm open to correction on this. Maybe the Life companies can somehow bundle it into a single product. But certainly if it was separate ETFs, then you couldn't offset losses against gains.
North America Equities 66.6%
European ex UK Equities 11.4%
Emerging Markets Equities 10.9%
Japanese Equities 5.1%
UK Equities 3.3%
Asia Pacific Equities 2.4%
Other 0.3%
So if 75% of your money is in it, then you're 50% exposed to North America (assuming your other 25% has no North American exposure).
But I think the disadvantage of this approach is that each fund taxed separately. So any losses on one fund can't be offset against gains on another one. I'm open to correction on this. Maybe the Life companies can somehow bundle it into a single product. But certainly if it was separate ETFs, then you couldn't offset losses against gains.
Good, because you're wrong
This is exactly what they do.
Not really since the valuation of the banks is still way lower than it was in the early 2000s, most of the investors in Irish banks from back then have only made back a small proportion of their losses. It's only investors that have got in since COVID that are having the big gains and remember they had to do that through a torrent of negativity, it's only now after all that time that the sentiment has changed.
As for US tech then sentiment has turned negative due to extreme valuations and the toxic input of guys like musk et al.
As for US tech then sentiment has turned negative due to extreme valuations and the toxic input of guys like musk et al.
Flybytheseat
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Looks like a lot of what I feared as OP is coming to pass. Hope some of you managed to adjust your asset allocations in time.
You mean time the market?
Flybytheseat
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You mean time the market?
No I dont. I mean react to the bleeding obvious rather than throw good money after bad by buying into a bubble.
BIG-notorious
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You mean time the market?
Different phrasing, same meaning.
If the rationale for an investment choice was good 1 year ago, or even 5 years ago, it should- broadly speaking- still be good today. Unless you're looking at short term investments which is definitely trying to time the market.
The thing about predictions of the future is that they're usually inaccurate. They'll look accurate in the context of specific datapoints over specific periods, but over the long term generally not so much. I mean anyone predicting either a boom or a bust in any index/market is almost certain to have a short term rise/fall in prices to point to as confirmation of their predictions in any 6 month period.
That said Bitcoin is a joke of an investment and always has been. Tesla is almost as bad, but at least has assets and revenue even if its actual value is probably only about 10% of what its current share price would suggest..
Flybytheseat
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I don't agree. I'm sure it's more prudent to adjust your investment choices to the macro-economic environment. The next big thing will be the US reneging on it's $36 Trillion national debt which the big organge D has already made inferences to doing. How will you react to that ? Would mean a major tanking of US markets, the dollar and a change in the world financial order. Just because things have been true for the past 80 years doesn't mean they will remain true in a new world order with the end of the US empire.
I think there is a bit of group think on this forum and people really need to think more critically and react to a changing environment. BB is the boss but doesn't mean he's always right. We get a better result as a whole if we challenge and are constructively criticial of each other's hypothesis.
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Would you have said that in 2001 ?, specifically your initial idea to invest in the nasdaq 100, so far everything is playing out like 2001, as was said a few weeks ago, the "magnificent 7" are getting walloped along with bitcoin and the US dollar exchange is falling rapidly.
This rarely happens and was implausible and ridiculed only a few weeks ago. Normally when US markets fall the rest of world has bigger falls, but occasionally at huge turning points the opposite happens, alot of the problems are in the US , very high valuations, it's been like that for years, and now the catalyst for bursting the bubble, trump and his whip sawing over tariffs.
It trump actually does get a peace deal the biggest beneficiary will be Europe and not the US
Some idle musings on this
I believe there is merit in revising strategy when an index is too concentrated as has happened with us and global indices in recent years. Case in point S&P exposure to the magnificent 7 and us equities exposure within global indices (msci world, ftse world etc)
Once the S&p enters correction territory (which it did intraday yesterday) on average if falls another 13% (based on historical data)
Even though it's notoriously difficult and there is little evidence to suggest anyone successful if one had positioned themselves more defensively, it may be worth waiting for a further fall of say 5% or so before switichibg back to equities (5% is that I don't want to miss out on going back in)
Having reduced by equity exposure by 75% in recent months, that's my plan, albeit ill do in stages
I believe there is merit in revising strategy when an index is too concentrated as has happened with us and global indices in recent years. Case in point S&P exposure to the magnificent 7 and us equities exposure within global indices (msci world, ftse world etc)
Once the S&p enters correction territory (which it did intraday yesterday) on average if falls another 13% (based on historical data)
Even though it's notoriously difficult and there is little evidence to suggest anyone successful if one had positioned themselves more defensively, it may be worth waiting for a further fall of say 5% or so before switichibg back to equities (5% is that I don't want to miss out on going back in)
Having reduced by equity exposure by 75% in recent months, that's my plan, albeit ill do in stages