Starting out long term portfolio ETF's

[StockNewbie12]

Hello people,



I'm very new to stock trading/investing and i wanted some opinions on what i've got for now.
I'm 26 and from the Netherlands and i want to invest basically till i'm 50. Maybe 51 to keep it @ 25 years.
I'm starting out at €500 and want to add €100 a month to my investments (wil be more in the future till max 200€ a month).

I've decided to put my money in a few ETF's. I find Individual stocks to risky for now.
The below 4 ETF's is basically what feels good and well enough spread over the world

the Vanguard all world has more then 50% of US mid/large cap company's so i want to even that out with the Vanguard developed europe ETF.
Also the russel2000 ETF has more risk that i'm aware off but it covers the smaller cap company's of the US.
The iShares Asia Pacific ETF is basically to cover more off Asia


(XET) VANGUARD FTSE ALL-WORLD ETF Accumulation (IE00BK5BQT80) 50%
(XET) SPDR RUSSELL2000US.S.CAP U.ETF Accumulation (IE00BJ38QD84) 20%
(EAM) Vanguard FTSE Developed Europe ETF Distrubuting (IE00B945VV12) 20%
(EAM) iShares Asia Pacific Dividend UCITS ETF Distrubuting (IE00B14X4T88) 10%

These 4 ETF's are also commission free at my broker Degiro.

I also want to add that i don't expect amazing yearly returns of 15% with these 4.
6/7% would be my goal
Also i'm not someone who will be spending hours a week reading the news or following the economy closely

Really curious about what you people think

 

[Rufus_Leakey]

You might want to consider adding more emerging markets exposure.

 

[StockNewbie12]

You might want to consider adding more emerging markets exposure.

Any suggestions?

 

[1nvest]

Hello people,



I'm very new to stock trading/investing and i wanted some opinions on what i've got for now.
I'm 26 and from the Netherlands and i want to invest basically till i'm 50. Maybe 51 to keep it @ 25 years.
I'm starting out at €500 and want to add €100 a month to my investments (wil be more in the future till max 200€ a month).

I've decided to put my money in a few ETF's. I find Individual stocks to risky for now.
The below 4 ETF's is basically what feels good and well enough spread over the world

the Vanguard all world has more then 50% of US mid/large cap company's so i want to even that out with the Vanguard developed europe ETF.
Also the russel2000 ETF has more risk that i'm aware off but it covers the smaller cap company's of the US.
The iShares Asia Pacific ETF is basically to cover more off Asia


(XET) VANGUARD FTSE ALL-WORLD ETF Accumulation (IE00BK5BQT80) 50%
(XET) SPDR RUSSELL2000US.S.CAP U.ETF Accumulation (IE00BJ38QD84) 20%
(EAM) Vanguard FTSE Developed Europe ETF Distrubuting (IE00B945VV12) 20%
(EAM) iShares Asia Pacific Dividend UCITS ETF Distrubuting (IE00B14X4T88) 10%

These 4 ETF's are also commission free at my broker Degiro.

I also want to add that i don't expect amazing yearly returns of 15% with these 4.
6/7% would be my goal
Also i'm not someone who will be spending hours a week reading the news or following the economy closely

Really curious about what you people think

starting out on such a small amount, you don't really need 4 or 5 different equity ETFs. 1 would be sufficient. the marginal return on $500 makes absolutely no difference. if anything you should be looking at a little more diversification. what happens when equity is going down, what then? why not take advantage of rising prices also
Dalio's all weather portfolio (to begin with) is a good starting point by using perhaps 3 core ETFs (1 Equity, 1 Bond, 1 commodity). that way then when prices on either are going down you can switch funds into the ones that are going up. and if all three are going up, or just two simply divide the portfolio into equal portions

The other thing to point out is your use of both accumulation and distributing ETFs, again, what kind of dividend return are you expecting from $500. its so minimal you may as well with starting off with accumulating. that is the point of this, growing your account. you are a long way off living off any income from this

 

[Rufus_Leakey]

Any suggestions?

You could start by looking at ETFs available to you similar to the ones from

The Web's Best ETF Screener | ETF Database

Screen 2,000+ ETFs by dozens of different criteria,including dividend yield, expense ratio, and investment objective. Includes CSV downloads.

etfdb.com

 

[StockNewbie12]

starting out on such a small amount, you don't really need 4 or 5 different equity ETFs. 1 would be sufficient. the marginal return on $500 makes absolutely no difference. if anything you should be looking at a little more diversification. what happens when equity is going down, what then? why not take advantage of rising prices also
Dalio's all weather portfolio (to begin with) is a good starting point by using perhaps 3 core ETFs (1 Equity, 1 Bond, 1 commodity). that way then when prices on either are going down you can switch funds into the ones that are going up. and if all three are going up, or just two simply divide the portfolio into equal portions

The other thing to point out is your use of both accumulation and distributing ETFs, again, what kind of dividend return are you expecting from $500. its so minimal you may as well with starting off with accumulating. that is the point of this, growing your account. you are a long way off living off any income from this

Thank you for your reply.
I have not heard from the Dalio's all weather portfolio yet and i'm very curious about that one. I'm trying to set-up mine but i'm trying to do that from attached PDF list. These ETF's don't have commission at my broker but everytime i'm finding an example the ETF's don't match with this list. If it's not to much trouble, could you show me a basic all weather portfolio from this list?

EDIT:
I did already bought 4 stocks of this one but i'm now looking into the all weather portfolio method.
(XET) VANGUARD FTSE ALL-WORLD ETF Accumulation (IE00BK5BQT80) 50%

 

[StockNewbie12]

e more diversific

at then? why not ta

You could start by looking at ETFs available to you similar to the ones from

The Web's Best ETF Screener | ETF Database

Screen 2,000+ ETFs by dozens of different criteria,including dividend yield, expense ratio, and investment objective. Includes CSV downloads.

etfdb.com

View attachment 299620

Thank you! I will look into that if i have decided not to use the dalio method.

 

[Nowler]

Personally I am more aggressive with my investments - the risk/volatility is just fine for me, so I will refrain from telling you what to invest in (you are likely more risk adverse). I personally would not be holding bonds right now - we are at the end of the long-term debt cycle and debt has skyrocketed in the last 12 months.

I would not worry about starting off with £500, you have got to start somewhere, but as 1nvest said, you are a long way off living off this portfolio. Here is the calculation of 500 initial amount plus 100/month over 25 years - this should help gauge what is reasonable:

I suggest you look into cycles in the market; debt/credit cycles, and cycles within certain sectors.
If you can identify where we are in a cycle, then you will know when to increase the amount of cash you hold, or when to be more aggressive with your allocated funds.

Someone from here showed me this back in 2017 and even though it's quite simple, it had a profound impact on the type of market participant I am today:

 

[StockNewbie12]

Personally I am more aggressive with my investments - the risk/volatility is just fine for me, so I will refrain from telling you what to invest in (you are likely more risk adverse). I personally would not be holding bonds right now - we are at the end of the long-term debt cycle and debt has skyrocketed in the last 12 months.

I would not worry about starting off with £500, you have got to start somewhere, but as 1nvest said, you are a long way off living off this portfolio. Here is the calculation of 500 initial amount plus 100/month over 25 years - this should help gauge what is reasonable:

View attachment 299625



I suggest you look into cycles in the market; debt cycles, business/credit cycles, specifically cycles within certain sectors.
If you can identify where we are in a cycle, then you will know when to increase the amount of cash you hold, or when to be more aggressive with your allocated funds.

Someone from here showed me this back in 2017 and even though it's quite simple, it had a profound impact on the type of market participant I am today:

Thank you very much for the table!

If this is based of 6 or 7% return yearly and my initial portfolio i'm pretty happy about it actually. I understand this is not guaranteed ofcourse. But i'm not someone who will be trading alot and i have time and don't need the money right now or in a couple of months. Not looking to withdrawl money of my account aswell. I probably will buy some individual stocks as my knowledge grows in the years but not right now.

So basically my original posted portfolio should do it for a average 6 or 7% return?

 

[1nvest]

Thank you! I will look into that if i have decided not to use the dalio method.

Just to make myself clear, i dont suggest you use the method. Its for complete beginners who want to do as little as possible. Its pretty lazy
The only thing that's good about it, is its diversification. Going back a number of years shows an (average) annual return of 9% with a maximum drawdown of 13%. These are not bad numbers. Not great, but also not bad.
To mimic Dalio's the following ETFs could be used, with the weighting as a %
TLT 40%
IEF 15%
SPY 30%
GLD 7.5%
DBC 7.5%

3 asset classes. Bonds, Equity and Commodity. weighted more towards bonds

All I would take from Dalio is simply the fact that he has diversified between these asset classes. It can be improved upon immeasurably, and never would i advocate holding on to an asset when its going down. however, the use of the asset classes means you are highly likely to catch at least one asset class going up when another is going down

 

[Nowler]

Thank you very much for the table!

If this is based of 6 or 7% return yearly and my initial portfolio i'm pretty happy about it actually. I understand this is not guaranteed ofcourse. But i'm not someone who will be trading alot and i have time and don't need the money right now or in a couple of months. Not looking to withdrawl money of my account aswell. I probably will buy some individual stocks as my knowledge grows in the years but not right now.

So basically my original posted portfolio should do it for a average 6 or 7% return?

I wouldn't be able to tell you how your original portfolio will perform but just looking at 6-7% as a target, I think that's very doable.
My targets are 20% on average across the life of my portfolio, but I am more aggressive than you, and I have the advantage of a few years extra experience.

Your biggest and most profound investment will not be your purchase of a stock or bond - it will be the time and effort you put into reading/watching videos that add to your understanding.

 

[MasterOfCoin]

Personally I am more aggressive with my investments - the risk/volatility is just fine for me, so I will refrain from telling you what to invest in (you are likely more risk adverse). I personally would not be holding bonds right now - we are at the end of the long-term debt cycle and debt has skyrocketed in the last 12 months.

I would not worry about starting off with £500, you have got to start somewhere, but as 1nvest said, you are a long way off living off this portfolio. Here is the calculation of 500 initial amount plus 100/month over 25 years - this should help gauge what is reasonable:

View attachment 299625



I suggest you look into cycles in the market; debt/credit cycles, and cycles within certain sectors.
If you can identify where we are in a cycle, then you will know when to increase the amount of cash you hold, or when to be more aggressive with your allocated funds.

Someone from here showed me this back in 2017 and even though it's quite simple, it had a profound impact on the type of market participant I am today:

Oversimplified, but well worth half an hour of anyone's time.

Once you've watched it, take a stab at working out where we're at economically, and act accordingly.

Which will, if you get it right, make a significant difference to the resulting outcome.

Most people get it wrong because they don't understand that money is debt.

Watch and learn.

 

[StockNewbie12]

I might get more aggresive as the years will pass by but for now i want a good/fine, a bit boring portfolio instead of risking my money. 100€ a month is something i can miss but it would sure as hell hurt if this will get wrecked every month. I was considering putting my money in obligations etc at the end of de 25 years. But i can't see in to the future ofcourse

 

[StockNewbie12]

Oversimplified, but well worth half an hour of anyone's time.

Once you've watched it, take a stab at working out where we're at economically, and act accordingly.

Which will, if you get it right, make a significant difference to the resulting outcome.

Most people get it wrong because they don't understand that money is debt.

Watch and learn.

I will watch it at the end of the day thank you!

 

[Nowler]

... I was considering putting my money in obligations etc at the end of de 25 years. But i can't see in to the future of course

What does this mean?
Bonds?
I dont quite understand (when I hear the word obligations, I think debt obligations)

 

[StockNewbie12]

What does this mean?
Bonds?

ooowh hahah sorry, yeah bonds

 

[Nowler]

Oversimplified, but well worth half an hour of anyone's time.

Once you've watched it, take a stab at working out where we're at economically, and act accordingly.

Which will, if you get it right, make a significant difference to the resulting outcome.

Most people get it wrong because they don't understand that money is debt.

Watch and learn.

Oh ya... very simplified
I think it's a more forgiving place to start than Mises, though to be fair those Mises videos are quite beginner friendly - the bootcamp ones in particular

 

[Nowler]

ooowh hahah sorry, yeah bonds

Ah I see.
Well it has been long said that as we get older we should reverse the ratio of stocks to bonds from being more stocks heavy, to being more bonds heavy. But that too is very simplified and can vary depending on various factors.

First things first; increase your capital and your understanding.
There are numerous books, articles, audiobooks out there to help.
Even just a few hours a week will pay dividends months and years later

 

[Nowler]

As you listen to more people you will come to value particular people in this space.
This is a little nudge in the right direction -

https://soundcloud.com/superinvestors

This type of conversation format from the likes of Jessie Felder, Grant Williams etc are an amazing information resource.
I am not one to buy subscriptions, but I am going to pick up Grant Williams sub - https://www.grant-williams.com/

There are plenty of free conversation format resources out there though, so don't feel you have to go out and spend money.
If you are fine with spending a little money then getting the Market Wizards books is insanely good value for money.
I even found good value in Trade2Win's Audiobook (as a beginner) - and it supports the forum

 

[StockNewbie12]

As you listen to more people you will come to value particular people in this space.
This is a little nudge in the right direction -

https://soundcloud.com/superinvestors

This type of conversation format from the likes of Jessie Felder, Grant Williams etc are an amazing information resource.
I am not one to buy subscriptions, but I am going to pick up Grant Williams sub - https://www.grant-williams.com/

There are plenty of free conversation format resources out there though, so don't feel you have to go out and spend money.
If you are fine with spending a little money then getting the Market Wizards books is insanely good value for money.
I even found good value in Trade2Win's Audiobook (as a beginner) - and it supports the forum

Yeah i bought a dutch book, basically investing for dummies haha and following a few youtube channels without crazy thumbnails and stupid emotional impulse hypes