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In principle, this again shows that an All World ETF is actually sufficient. However, it is of course risky to continue like this until retirement. I think it makes sense to add bonds towards the end to reduce the vola.
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@six Yes, this is also mentioned in the article
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@six You have to be careful with the paradigm "adding bonds lowers the vola of a stock market portfolio"! The slightly inverse correlation between equities and government (!) bonds only applies under very specific conditions. A central one is: Inflation <3%. Above this, bonds correlate positively with equities and no longer offer any vol protection (e.g. 1970s, 2022). However, very few people are aware of this, which is fatal at a time when inflation is more likely to remain constant at 3% than 2%.
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@six Well, if you're clever, you won't have to retire in 19 years. I certainly don't want to have to work just for my pension at some point.
But with shares only and B&H only, it's going to be tight. You only have a 7%pa return and a 3% safe withdrawal rate.
That's why I always advocate strategy diversification. Bonds, gold, commodities and BTC may also have a place here. Diversification across various uncorrelated strategies smoothes the yield curve and raises the safe withdrawal rate close to the yield. Imagine your withdrawal rate is 6%: then you only need half as much capital until retirement and can do what you want 3 or 5 years earlier.
I find this perspective more appealing than swimming along in the B&H world ETF mainstream and working until the end.
But with shares only and B&H only, it's going to be tight. You only have a 7%pa return and a 3% safe withdrawal rate.
That's why I always advocate strategy diversification. Bonds, gold, commodities and BTC may also have a place here. Diversification across various uncorrelated strategies smoothes the yield curve and raises the safe withdrawal rate close to the yield. Imagine your withdrawal rate is 6%: then you only need half as much capital until retirement and can do what you want 3 or 5 years earlier.
I find this perspective more appealing than swimming along in the B&H world ETF mainstream and working until the end.
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@six It depends on what strategy you have, I will retire in 17 months and am 93% invested in stocks, I am looking forward to delicious dividends every month... The remaining 7% is in bonds, gold, and BTC... I sleep really well and the declines in Corona and this April show me that I am well positioned. Of course, there are always pipe crashes, but they also recover, and everyone else has survived despite the fall in prices... Of course I used the last setback to buy more. I think we'll have other worries and problems when the companies all go bust... :D
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@Dividendenoldie If it works for you, that's great! I'm always happy when plans work out.
However, I would like to stop working for money long before my official retirement age. And with 100% B&H shares, I'm skeptical as to whether I'll succeed.
However, I would like to stop working for money long before my official retirement age. And with 100% B&H shares, I'm skeptical as to whether I'll succeed.
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@Epi Working for money? That's the last straw! :) It's great if that's your strategy for not working sooner, or working less, all the better... And yes, I also love it when plans work! :D
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@Epi Gold is currently too hot for me and with Bitcoin the issue of proof of ownership, Satoshi test etc. is annoying.
I once bought Euwax Gold 2 at around €50, but then sold it after 1 year and also sold Bitcoin at a profit.
And in order to weight both significantly (e.g. 10% each), I would need a larger sum.
I've also thought about starting a savings plan with them, but I want to stay with ING and they don't have a Euwax Gold savings plan or a Bitcoin ETC. Somehow not so easy.
I once bought Euwax Gold 2 at around €50, but then sold it after 1 year and also sold Bitcoin at a profit.
And in order to weight both significantly (e.g. 10% each), I would need a larger sum.
I've also thought about starting a savings plan with them, but I want to stay with ING and they don't have a Euwax Gold savings plan or a Bitcoin ETC. Somehow not so easy.
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@Dividendenoldie I am also considering changing the All World savings plan to a dividend savings plan a few years before retirement.
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@six Why not? With sufficient diversification and if you have held shares for a long time, I don't see any major problems.
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