One for all or All for one?

Hi guys, I had a debate with some friends the other day and I would like to hear your take on this.

The question was: If you want to diversify your portfolio by holding some ETFs like these ones here (you can adapt it if you live in the UK or whatever):

S&P500
Global Clean Energy
Emerging Markets
EQQQ
European Property
World Small Cap
Bitcoin ETP
Core MSCI JAPAN

Rather than holding all of them… why not just holding Vanguard all World? What would be the pros and cons of just holding the all world one?

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I had a read on Single Stocks in Your Portfolio: Pros and Con (investopedia.com).
Personally, I’d choose more to hold and have a great diversification instead of just betting in a single stock to hold :slight_smile:

They’re ETFs not single stocks.

I guess there are pros and cons. Perhaps the separate ETFs work out cheaper, or they would at least allow you to pick your own country/market/sector to a point than an ‘all in one’

Out of those the only ones I’d be interested in are the global clean energy and the bitcoin etp.

The rest are either slow movers or in danger zones.
Japan from what I gather has a declining economy, world small cap is worse than gambling, European property apart from Germany the rest is in trouble (Germany also if you consider how far ahead of the rest of Europe they’ve become in effectively the same market with the same currency), emerging more of the same, s&p500 is inflated currently and fat with tech, EQQ is a decent candidate but will drop more than the s&p500 in a recession or market decline.

A good choice of companies inside an index are far better than tracking the actual indexes. It’s always the case that a few good companies help growth and the rest hold it back, you just need to find the few good companies.

That’s pretty interesting point of view. Lots of people recommend ETFs for a safe a steady profit in the long term. Nobody got the magic formula tho. Thanks for sharing.

I’m not that familiar with some of them so I won’t really comment on what I don’t know as I’m not aware of the specific holdings.

The clean energy is an absolute banger and a holding of mine.

The S&P500 if you’re looking at long term perspective is a safe bet. Even Buffet says so, and he knows a thing or too. The average PE is around 27 or something which is pretty high historically, but if you look at some of the ratios out there then it’s almost conservative.

The Bitcoin ETP just myths me a lot like Bitcoin but there’s clearly legs in it, I just wonder when we return to a bit more stability if it’ll drop or not. But I said that at 10k dollars so don’t listen to me on that one. What I do know is that institutions are taking a keen interest so that’s worth something.

I have to stand up for EQQQ here, it’s far from dead or in a danger zone. one of the best IMO.

  • One of only 5 U.S. listed ETFs with assets in excess of $100 billion
  • The 2nd most actively traded U.S. listed ETF
  • Rated in the top 1% (2 of 325) best-performing large-cap growth funds over the past 15 years by Lipper as of September 30, 2020
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On EQQQ do current valuations concern you, I guess that may be short term thinking because if your plan is to hold for 10 years or so then it’ll generally come out in the wash.

No not at all, you will see people questioning the valuations 8,7,6,5 years ago and it still continues upwards, A misconception is that it is all tech but there is some non tech in there too. (Pepsi, Starbucks for instance), also I like the stocks being added recently, for instance Peloton and Match were just added.

@trader787 Did I not say it was a decent candidate :thinking:

oh yes, just read the first bit where you you also said “The rest are either slow movers or in danger zones.”

yes it might decline faster, but whenever tech drops it seems to bounce back harder. (March perfect example)

I think the most of them are pretty good to b&h for the long term. Are you going to have 40% profits per year? Probably you are better buying single stocks… But that means time researching them… ETFs are safer IMO

That’s where I’m at as well. Although I do like a bit of diversification with some reasonable valuations, generally from the UK.

I can imagine a number of value investors do wish they got involved opposed to waiting for this “mean reversal” for nearly a decade. That being said, we all need to be comfortable with what we’re doing within ourselves most importantly.

However in simple terms, the sentiment is here at the moment and despite using intrinsic valuations techniques and so forth, something is worth what people are actually willing to pay for it. At least for now anyways.

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My reply button doesn’t work so my last message was replying to you :man_facepalming:

I’ve got over 25 stocks that I’ve researched and I’m semi happy with now I’ve turned my attention to etfs.
I’m not sure emerging is something I would risk and the s&p500 is clearly too inflated currently I would pencil this as a buy in the next crash. Clean energy, eV and battery tech is a winner and the EQQ as long as you get out early in the crash, if not it will suffer.
Buying stocks for 3 year cycles is not as hard as it looks, buying them for 10 years is a lot to ask of a company

I know what you mean, people looking at amazon, apple. etc… 5 years ago thinking ‘these can’t go any higher’ , every year seems like they will drop…then the next year up again… etc. longer you stay out of them the more risky it seems to get in. it does seem like UK at the moment are at the ‘bottom’ with value and USA is at the ‘top’ and expensive.

There are some UK companies that have done really well the last 5 years or so, just need to ignore the big guns(mostly) in the FTSE100.

as I just mentioned, people have been talking about USA tech crash for years and missed a lot of growth, picking a top is difficult and it could be 5+ more years easy of upwards trend.

true, I made 1000% in around 5 years on both Creightons and Evraz.

picked a couple real duds too (Foxtons, RR, Easyjet)

Holding a World ETF has the following benefits:
-Simple, not much thought required. No rebalancing or re-evaluating portfolio required.
-Relatively cheap. For example BTC is quite expensive and it is not even a company, some might not even consider it an asset in itself. It is very risky and pure speculation. (Having said that, I hold a minor position)
-Very diversified, if one sector or country uunderperforms other will pull the average up (the USA is by far the one with the most impact though)

Inconvenients:
-Does not include small cap
-Only includes stocks

Note: I would consider choosing a World ETF that includes the Emerging Markets. Not all world indices do. I seem to remember that MSCI World is only developed markets whilst FTSE World includes all markets. If you do decide to go for a World ETF confirm this!

Overall, if you are new you might want to consider something like this:
-Vast majority of portfolio into a World ETF that includes Emerging Markets (say 53% of portfolio)
-Smaller percentage of portfolio to a large small cap ETF, I am not familiar with the World Small Cap ETFs but potentially that (say 10%)
-If you like European property or REITs as diversification then a small amount to this, say 10%.
-Maybe consider having 5% in developed government longterm bonds such as the USA, they tend to not be correlated to stocks so if there is a crash they might appreciate and provide liquidity to invest more in stocks.
-A few percentage points in commodities, lets say maybe 1% in Bitcoin and 1% Gold. Obviously the Bitcoin is speculative and the gold might also be a bit volatile also.
-That leaves around 20% to pick specific stocks or ETFs that you might like such as the Global Clean Energy or the Nasdaq-100 that you mention.

Obviously, this is not financial advice, just some points that you might want to think about. I have just made up the percentages to give you an idea for you to think.

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