3D·

Here's my new 8k a month pac.

Today the first orders of my new automatic accumulation plan will be placed in the market. Each month, on the first and fifteenth days, my broker will place orders for 4,000 euros, automatically rebalancing the portfolio holdings of these instruments according to the following weights:

$IWDA (+0,83%) 50% | $XDEV (+0,97%) 37,5% | $IEMA (-0,25%) 12,5%

Why did I choose these ETFs?

◾ Right now my portfolio is 98% composed of distribution instruments. This all-accumulation PAC aims to correct this drift, at least partially.

◾To realign the portfolio to the market with a slight tilt value: I believe that some segments of the market are overvalued and will have lower returns in the coming years. At the same time, however, I believe in passive investing and do not want to deviate too much from the market with excessive tilts. Today this tilt in my portfolio already exists--think Nvidia weighs only 0.5 percent of my total exposure.

How do I finance my €8,000 per month plan?

It is not an inheritance, not a win-win, I do not sell courses or do scams. In the next post I will explain in detail my thoughts and misgivings about it.

#etfs
#etfs #iwda

#pac
#fire
#fireitalia
#portafoglio
#portfolio
#portafoglio

6 Comentários

Uwe@SchlaubiSchlumpf

Congrats. Brave decision to go Value. I think value has underperformed in the last years in the msci world. This isn’t necessarily bad as factors like small or value can always underperform for many years before they come back. That’s the risk in risk factors.
How do you think about adding other factors?

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50onFire@50onFire

@SchlaubiSchlumpf

Hi, it's really difficult for me to explain all my thoughts in a few concise words. I'll try to do so while avoiding being misunderstood. My package includes 50% SWDA; XDEV represents 37.5% in a dollar-cost averaging plan with a monthly allocation of 2% of the portfolio. Overall, the value tilt will reach about 10% within a year—I wouldn't say it's accurate to claim I'm betting on it.
As a passive investor, I follow the market. The small bias comes from reasoning opposite to yours: the growth sector has outperformed and reached significant multiples.
To answer your question, in general I don't like to deviate from the market. I always think that every time I buy outside the market average, there's someone who has made the same reasoning as me but in reverse, and therefore sells. One wins and the other loses—it's a zero-sum game. If I buy the whole market, I neither win nor lose; I grow with the market.
I hope I've conveyed my thoughts clearly... I'll discuss this further in future posts.
I'd like to continue having your perspective, and I'd appreciate it if you'd follow me on Facebook as well, where I find it easier to exchange opinions: https://www.facebook.com/profile.php?id=61579956810263
Good luck, friend.

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Uwe@SchlaubiSchlumpf

@50onFire don’t get me wrong, I wouldn’t use the word „bet“ either. Value is simply a factor that is used on the Fama & French Five Factor Model (and others) it’s used to model market return that could not be explained by market risk alone. So tilting towards value is simply taking a rewarded risk. The value premium is backed by decades of data. But it performed not so good in the developed large markets for the last 10-15 years. It was a growth market. Tat is a totally usual thing. Premiums like small or value tend to underperform for a while before they overperform again. Seems to be the risk you have to take in order to outperform in the very long run.

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50onFire@50onFire

@SchlaubiSchlumpf As you will have understood, English is not my strong suit and I actually hadn't fully grasped your comment. Now I have perfectly understood what you were telling me. I know this point but I'm not well-informed enough to define a clear idea. I'll take this opportunity to study the topic a bit. Give me a few days and I'll come back to share my ideas

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50onFire@50onFire

@SchlaubiSchlumpf I’ve been reflecting on the topic and I still have some doubts. I get the impression that these studies identified factors that outperformed the market in the past because, having initially been undervalued, they eventually went through a mean reversion process. It seems to me that different factors tend to outperform and underperform the market cyclically, sometimes with cycles longer than a human lifetime. For now, I still believe that, for a retail investor, the most sensible choice is to follow the market cap. However, your perspective has given me new insights that I’d like to explore further.

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Uwe@SchlaubiSchlumpf

@50onFire I think you are mostly right. Maybe not human lifespan but often more time then a human can wait. Waiting two decades for value to perform again can be to much when you are 57. I think the theory behind it is, that you can’t arbitrage risk factors because there is a risk involved. (The risk of value being that the low valuation of the company was right and it‘s going under). The theory is that If you have more then one factor, your propability of a long drought phase sinks.

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