9Mo·

Hello everyone,

I'm planning to use the 70/30 method for my initial investment and would like to hear your opinions. My idea is to invest 70% of my portfolio in stocks and 30% in bonds and real estate. I have already considered investing 35% in the $CSPX (+0,37 %) and 35% in the $VWCE (+0,38 %) to ensure broad diversification.

However, I'm wondering whether it makes sense to add an ETF for emerging markets or perhaps Europe and emerging markets to cover more small caps and emerging markets. What do you think? Are there any good ETF recommendations here that you would recommend to me?

In addition to the 30% bonds/real estate, I am also looking for two suitable ETFs - ideally one for bonds and one for real estate REITs. Which ETFs would you recommend here to create a stable and lower-risk basis in the portfolio?

I look forward to your feedback and thank you in advance for your tips!

14 Commentaires

six@six

9Mo

With S&P + All World you are less diversified than with the All World alone. Don't make it too complicated 😉

Edit: And if you also add EM, even worse

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Kevin E.@KevinE

9Mo

Whether 30% bonds / real estate make sense can only be considered in conjunction with your strategy.

It would make sense for you to explain yourself a little. Investment horizon, risk appetite, goal, possibly savings rate. Then we can say a little more.

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alschaeub@alschaeub

9Mo

@KevinE Thanks for your comment! I just want to build up assets in the long term, I can't say much about risk appetite yet as I'm still very new to it.
But I was thinking of bringing in a bit more stability with bond ETFs, for example

Current savings rate of approx. 500€ per month

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Privatier@c05

9Mo

@alschaeub especially with a long horizon, bonds are useless because they don't really generate any returns. Put everything into the All World.

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Kevin E.@KevinE

9Mo

@alschaeub You are right; bonds bring stability to the portfolio (in almost (!) all market phases). But always at the expense of returns. If you don't want to use the money for the pension gap until 20/30 years from now, for example, I would only slowly shift to a maximum of 20-40% bonds 5 years before then at the earliest.

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Silas@Bein-Godik

9Mo

I am also a friend of the 70/30 method. It's ideal for people who don't want to deal with it all the time. But I also use gold. So shares 60%, bonds 25% and 15% gold. Three stocks are enough:
$VWRL, $VECP and $4GLD

I use the distributing variants, the dividends can then be used for rebalancing

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alschaeub@alschaeub

9Mo

@Bein-Godik Thank you !
And are you doing well with the strategy?
Do you mean you divide the dividends between the 3 positions?

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Silas@Bein-Godik

9Mo

@alschaeub The strategy yields around 10% per year. You can easily test this here with a backtest in a new portfolio. The dips are significantly reduced, which is what you want to achieve. The reduced risk comes at the price of lower returns.

If the 60/25/15 ratio has changed significantly, you should rebalance in order to restore the ratio. This should be done once a year and, if possible, through additional purchases using the dividend

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alschaeub@alschaeub

9Mo

@Bein-Godik okay sounds good, but 10% a year is a lot

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Silas@Bein-Godik

9Mo

@alschaeub Of course, this is also driven by the good performance of gold in recent years. Gold is actually here to dampen the setbacks

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giolarochelle993@giolarochelle993

9Mo

@Bein-Godik why corporate bonds? to diversity would be better go with government bond. to drop one more transaction one could buy vanguard lifestrategy and gold

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Silas@Bein-Godik

9Mo

@giolarochelle993 I prefer to determine the time of rebalancing myself. Fixed dates are bad as I don't rebalance in phases of rising shares.

Which government bond do you recommend?

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giolarochelle993@giolarochelle993

9Mo

@Bein-Godik there are many, split between euro and us and with short and long duration.
There are even mixed etf abailable (global bonds)

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fnd@fnd

9Mo

The issue with investing 35/35/30 is that these numbers don’t look good. 33.333 * 3 isn’t it either. You have to choose 4 investments.

NFA

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