Yea and nay?
New to trading, in it for the long run.
Any feedback?
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Hi @tarkarys, good on job on starting to invest!
Here’s my opinion on your portfolio:
- You are actually globally diversified since you included S&P 500, MSCI World ex USA and Emerging Markets. However you deviate a lot from global market weights, where USA is ~65% and EM is ~10%. You could simplify your porftolio a lot by replacing all three for SPDR MSCI All Country World or SPDR MSCI All Country World IMI (includes some small caps but TER is a bit higher). This would also reduce any urge for tinkering
- 20% is a pretty large allocation to gold (gold and miners) for me. Personally I wouldn’t use it or decrease it to 10% total. In the long run, gold is expected to underperform stocks but it can help reduce drawdowns in big stock market crashes. I believe the 20% total is too much though.
- Regarding the single stock Navigator, I believe a single stock does not fit a long term portfolio. I would create a separate pie for single stocks.
Compared to say a broad World tracker (MSCI ACWI, FTSE All World etc.), you have a substantial underweight to US stocks, a substantial overweight to EM and a sector bet on gold and gold miners. US stocks, particularly US large caps have driven much of the global equity growth over the last 15 years or so, while EM, Asia, Europe etc have mostly lagged over the period. This is exactly why the US makes up so much of the global equity indices now - it wasn’t always the case historically.
Here’s a link to an MSCI ACWI fact sheet for info - https://www.msci.com/documents/10199/8d97d244-4685-4200-a24c-3e2942e3adeb
Essentially you are making an active decision that you think non-US and EM equities will outperform. This is fine as long as you understand that’s what you’re doing. When you look at US overall valuations vs a lot of other regions, it’s possible you’re right… As for the gold miners, this is a very volatile sector so just make sure it’s in your risk tolerance is all I would say.