zapbrannigan
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Yes I'm based in Ireland. I'm not sure I understand the advice here. Are you saying just to move everything to the equivalent World Equities fund such as Standards Life Vanguard Global Stock Index Fund? Keen to understand the thinking behind it for my own benefit.It sounds ridiculous to be blunt. 60%-ish of the global market is in the US. Presumably you live in Ireland? Why not just invest globally?
Yeah I'm aware that most World Index are heavily geared towards the U.S. Standards Life Vanguard Global Stock for example which I'm looking at is 70% U.S equities with the usual big hitters like Apple, Microsoft and NVidia.By putting 30% in world equities, you’re only really diversifying 40% of 30% of your portfolio (=12%) away from US, since US constitutes ~60% of a world equities index anyway as Gordon says.
There are World Equity Ex-US funds, maybe that’s what you’re thinking?
The alternative, and I think what Gordon is also recommending, is to put 100% into world equities, which gets you 60% US exposure and 40% rest of world.
Just go 100% into world equities. It'll still have the US exposure that you seem to want.Thanks for the comments. I'm trying to devise what would be a reasonable reallocation of the funds.
I'm thinking maybe 20-30% into World Equities and rest in S&P 500 Vanguard fund for 8 years. From age 50 thinking I should move 1-2% into bonds so I'll have 10-20% in bonds at age 60 when drawing down.
Would the above sound reasonable or should I buying bonds this far out already? I'm certainly not risk averse but equally know it be prudent to have something in bonds to delay drawing down the main fund for a few years if equities nose dived for 2-3 years in & around retirement age.
Have you been reading American financial blogs and books? That's the only reason I can think of for your approach to geographic diversificationYes I'm based in Ireland. I'm not sure I understand the advice here. Are you saying just to move everything to the equivalent World Equities fund such as Standards Life Vanguard Global Stock Index Fund? Keen to understand the thinking behind it for my own benefit.
Had been thinking of putting 20-30% in world equities and rest in S&P 500 for next 8+ years before slowing moving a small percentage to bonds (10-20%) at 50 on wards before retirement
That's a very interesting series I'll have a read of that.For a US F.I.R.E. audience, but worth reading this guy’s work on sequence of returns risk and glide paths. In short, SoRR has biggest impact early in retirement, so he recommends diversifying into bonds 5 or so years out, for maybe the first 5-10 years of retirement before transitioning back to equities-heavy.
No as I'm pretty much a novice in all aspects as not from a finance background. Just like to have some diversification even if Im aiming for high growth and aware of the pitfalls that can come with that close to retirement if the US tanks.Have you been reading American financial blogs and books? That's the only reason I can think of for your approach to geographic diversification
It's true the US market has out performed most other markets over the last 30 years. Some of the drivers of that success are 1) the rise of tech giants and 2) the fact the US with 5% of the world population consumes around 33% of the world resources because the international order is rigged in their favor. How comfortable are you that this status quo will continue for the next 25 years especially given the instability of geopolitics at the moment?Hi,
I'm age 43 and have €200k pension all currently invested in the S&P 500 as my retirement is 17 years away (looking to retire at age 60). My pension is with Standard Life(SL) (100% allocation, 0.90% AMC fee).
Not from a finance background and started only real paying for pension last few years as had lot other expenses with young kids (x2) and mortgage in my 30s.
Currently managing to contribute €4000 a month into the SL pension as I'm self employed and earning €150k last few years - I'm a higher earner and I expect this to continue for next 10+ years minimum bar some black swan event or ill health (have income protection in this event).
At the moment have everything invested in the "Vanguard US 500 Stock Index Fund" - my aim is reasonably high growth in pension pot for next 10 years and then to slowly diversify.
For retirement think I'll need €1m to €1.5M so as to have ideally €30-40k each year in retirement. I have two kids who will be through college by then. I will be mortgage free in 7 years (remaining mortgage is 70k), mortgage quite low after overpaying for a good few years to bring it down.
Currently I'm very conscious of the fact my pension is very exposed in (a) equities and (b) extremely exposed in U.S equities.
In terms of re-balancing my pension portfolio would moving some percentage of my funds to some World Equities be sensible short term?
Thinking of moving 20-30% to some World Equities index fund. As for bonds I'm thinking in time I'll move some small percentage such as 1-2% each year after age 50 to bonds. So at retirement I'd have 80-90% in equities and 10-20% in bonds.
Like to get some feedback as I'm very much a novice.
Thinking of moving 20-30% to some World Equities index fund. As for bonds I'm thinking in time I'll move some small percentage such as 1-2% each year after age 50 to bonds. So at retirement I'd have 80-90% in equities and 10-20% in bonds.
Like to get some feedback as I'm very much a novice.
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