Which market to invest in?
Discussion
US markets seem absurdly overvalued at the moment.
I have quite a lot in US based funds within my ISA, am well up and wishing to lock in the gain.
But I am at a bit of a loss as to what to swap my USA based funds to.
UK, Europe, Emerging markets? Am quite heavily into Japan which has done well and I think will continue to do so, but I am not sure I want to increase my exposure.
Or should I just stay in for the long term as I am sure they will come back up again in the long term after the crash, but will feel a little sick at the opportunity loss.
I have quite a lot in US based funds within my ISA, am well up and wishing to lock in the gain.
But I am at a bit of a loss as to what to swap my USA based funds to.
UK, Europe, Emerging markets? Am quite heavily into Japan which has done well and I think will continue to do so, but I am not sure I want to increase my exposure.
Or should I just stay in for the long term as I am sure they will come back up again in the long term after the crash, but will feel a little sick at the opportunity loss.
Interesting one this. Looking at my ISA, I'm definitely over exposed to the USA (37% portfolio vs 24% global GDP) and UK (16% portfolio vs 3.25% global GDP).
The UK I feel is under valued due to Brexit etc, or maybe thats just homeland bias speaking, but not as concerned over that boiling over. It does feel like I've done well out of the USA exposure over the last 2.5 years, so maybe its time to rebalance a bit.
The UK I feel is under valued due to Brexit etc, or maybe thats just homeland bias speaking, but not as concerned over that boiling over. It does feel like I've done well out of the USA exposure over the last 2.5 years, so maybe its time to rebalance a bit.
thekingisdead said:
Global tracker if you’re in it for the long term?
What knowledge do you have that the market doesn’t over which regions will outperform over the next decade?
That's my approach now. After years of experience I realised I'm not a good selector of stocks, regions or fund managers. In other words, I can't predict the future.What knowledge do you have that the market doesn’t over which regions will outperform over the next decade?
In a global tracker you won't miss out on anything.
If you still feel the need to take a punt then you could do so with a portion eg. 10% of your savings.
Any global tracker should be over 60% invested in the US and a big (big) chunk of that will be in the FAANGS so essentially most of you portfolio by market cap will be invested in a handful of big American tech companies.
That may leave you over exposed to any downside, that may concern you.
A global tracker is what it is but it isn't a diversified investment.
That may leave you over exposed to any downside, that may concern you.
A global tracker is what it is but it isn't a diversified investment.
knk said:
US markets seem absurdly overvalued at the moment.
I was concerned about that when I invested in back in 2016 - but since then the market's risen almost 100%, so you can never tell. Don't forget US market doesn't pay much dividend so more of your overall return comes in price growth, which explains a significant chunk of the rise in the index.
BobPigeon's point is well made. If you're going to buy trackers I would buy several different ones in order to swing the balance of your investment strategy onto the profile you want. An alternative is to buy active funds where the manager can suppress exposure to the "huge few" if he wants to.
knk said:
Or should I just stay in for the long term as I am sure they will come back up again in the long term after the crash, but will feel a little sick at the opportunity loss.
All I've done is trim some holdings of their most recent gains (take some profits) and stayed on board with the rest. If you've made good gains then you can probably ride a 25% downturn without going under water - so long as things eventually come back again! Which, historically, they always have done. Although past performance is no guarantee etc etc. The big crash of 1929 took 25 years to fully recover. The financial crisis of 2008 took only 4 years to recover and the dot-com collapse of 2000 also took 4 years to recover. The oddity was March 2020 where a near 20% drop bounced back in just 4 months while Covid has killed 500,000 Americans and continues to rage. Everything seems to be driven by high hopes based on a combination of vaccination and financial stimulus.I'd quite like an approach where you say what you *don't* want to be invested in. A black-list. So everything but.
That way you can get the best spread of investments across global or regional or whatever, along with specific areas/industries, and then just take out the bits you don't want (yes I know it may become "unbalanced", hey)
That way you could say, give me a global tracker, but I don't want to be in Tesla, or anything in China, or Cheese, for instance.
That way you can get the best spread of investments across global or regional or whatever, along with specific areas/industries, and then just take out the bits you don't want (yes I know it may become "unbalanced", hey)
That way you could say, give me a global tracker, but I don't want to be in Tesla, or anything in China, or Cheese, for instance.
Mmmmn, cheese!
I think Africa is likely to do well but there are very few funds that focus there.
Thinking about it I may just stay with my current US funds and concentrate on where to put my £20k for 21/22's ISA in April.
An AI fund (S&W) and a Robotics fund (pictet) have both done really well over the last 2y, but I think they both likely hold Tesla and I am not to keen to put more that way.
Am currently 28% North America, 27% UK, 15% Japan, 14% Asia ex Japan, 10% Europe ex UK.
I think Africa is likely to do well but there are very few funds that focus there.
Thinking about it I may just stay with my current US funds and concentrate on where to put my £20k for 21/22's ISA in April.
An AI fund (S&W) and a Robotics fund (pictet) have both done really well over the last 2y, but I think they both likely hold Tesla and I am not to keen to put more that way.
Am currently 28% North America, 27% UK, 15% Japan, 14% Asia ex Japan, 10% Europe ex UK.
https://www.fnlondon.com/articles/hsbc-london-bank...
HSBC, a company with 2 feet in 2 continents thinks the foot in Asia is best.
I think they are probably right given China has already bounced back fastest so far.
HSBC, a company with 2 feet in 2 continents thinks the foot in Asia is best.
I think they are probably right given China has already bounced back fastest so far.
Clive Milk said:
https://www.fnlondon.com/articles/hsbc-london-bank...
HSBC, a company with 2 feet in 2 continents thinks the foot in Asia is best.
I think they are probably right given China has already bounced back fastest so far.
1bn+ people vs 65mill ish. I’d go with China/Asia too.HSBC, a company with 2 feet in 2 continents thinks the foot in Asia is best.
I think they are probably right given China has already bounced back fastest so far.
Would be nice to see HSBC UK sold and become Midland again... I can use my Griffin embossed cheque book wallet again
Edited by Mr Whippy on Saturday 27th February 09:50
SJfW said:
Looking at my ISA, I'm definitely over exposed to the USA (37% portfolio vs 24% global GDP) and UK (16% portfolio vs 3.25% global GDP).
I’m not convinced those domestic GDP figures are of any relevance. The companies listed on Stock Exchanges in US and UK tend to have businesses which operate on a global basis.
Similarly some people fret about exchange rates but things tend to even out by the time foreign earnings have been reported in the company’s own currency and then arrived in your bank account as either dividend or capital gain.
I’m all in favour of investing in global businesses. I’m equally in favour of paying an extra 0.5% (or thereabouts) in charges to an active manager who can decide to cut back on individual areas of exposure if he wants to.
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