I wondered if anyone could post their strategy for long term savings outside of their trading account, and maybe also give some feedback on my strategy for long term savings?
I use a table for risk divided in seven classes where;
1: Risk free (Bank savings)
2: Investment grade (BBB-)
3: High yield (B-)
4: Combined funds
5: Medium risk stocks
6: High risk stocks
7: Geared products
My current allocation is 25 % of total assets in class 1, where 90 % are in locked savings and 10 % in regular high-interest savings account.
The reason for having that much in locked savings is that everyone under 34 in Norway gets an 800 $ tax refund every year in addition to high interest (currently 5,30 %) if the money is in an account that can only be used for real estate purchases or maintenance.
The remaining 75 % are divided between risk class 2-6. Where 60 % is in 5-6 (stocks), 35 % is in 2-3 (bonds) and 5 % is in real estate.
Whenever my stock portfolio is more than 5 % outside of the 60 % total I will rebalance it.
No individual stock can be more than 10 % of the total stock portfolio, and one sector can not be more than 25 % of the total stock portfolio. I will balance the individual stocks if they rise or fall more than 5 % outside the 10 % total.
I am aware that the rebalancing strategy leads to me increasing risk in a falling market, but being a long term investor I think it gives me a better risk/reward in the long run than not doing it.
I am 26 years old and my perspective is 10 yr +, do you think I should take more risk than what I am currently doing? Do anyone else here use rebalancing in their investment strategies?
I use a table for risk divided in seven classes where;
1: Risk free (Bank savings)
2: Investment grade (BBB-)
3: High yield (B-)
4: Combined funds
5: Medium risk stocks
6: High risk stocks
7: Geared products
My current allocation is 25 % of total assets in class 1, where 90 % are in locked savings and 10 % in regular high-interest savings account.
The reason for having that much in locked savings is that everyone under 34 in Norway gets an 800 $ tax refund every year in addition to high interest (currently 5,30 %) if the money is in an account that can only be used for real estate purchases or maintenance.
The remaining 75 % are divided between risk class 2-6. Where 60 % is in 5-6 (stocks), 35 % is in 2-3 (bonds) and 5 % is in real estate.
Whenever my stock portfolio is more than 5 % outside of the 60 % total I will rebalance it.
No individual stock can be more than 10 % of the total stock portfolio, and one sector can not be more than 25 % of the total stock portfolio. I will balance the individual stocks if they rise or fall more than 5 % outside the 10 % total.
I am aware that the rebalancing strategy leads to me increasing risk in a falling market, but being a long term investor I think it gives me a better risk/reward in the long run than not doing it.
I am 26 years old and my perspective is 10 yr +, do you think I should take more risk than what I am currently doing? Do anyone else here use rebalancing in their investment strategies?
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