Search found 44 matches

by Lauretta
Sat Jul 22, 2017 10:08 am
Forum: Investing - Help with Personal Investments
Topic: Windfall: Buy or wait?
Replies: 30
Views: 2874

Re: Windfall: Buy or wait?

The best time to invest that windfall was when you got the money. The next best time is RIGHT NOW. If all of this windfall was invested, would you sell it all and then dribble it back in a little at a time? If you're too scared to invest, put it into CDs and be done with it. This is a good argument...
by Lauretta
Tue Jul 18, 2017 8:29 am
Forum: Investing - Help with Personal Investments
Topic: Your opinion on how safe the French Assurance Vie contract is
Replies: 5
Views: 573

Re: Your opinion on how safe the French Assurance Vie contract is

In Belgium we have something similar. Sometimes I compare them with "structured products" or "whole life" that you sometimes see on this forum. During the crisis 10 years ago some of these life insurance products got into serious problems. Hi BeBH65 I didn't know you were from B...
by Lauretta
Mon Jul 17, 2017 2:27 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

Second, it seems you have selected a conservative portfolio instead of a aggressive. These tend to skew towards value and defensive plays. Europe is over-weighted in these sectors. The US tends to be overweighted in growth. See technology and highly leveraged companies. That's right :) I have check...
by Lauretta
Mon Jul 17, 2017 2:22 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?

You can be sure that other professionals overweigh US stocks, because the overall market is weighted about 50/50. :D :D :D haha that's correct, I hadn't thought of it that way. :D though if it's the US professionals that are overweighing US stocks, it only reinforces the idea of domestic bias :wink:
by Lauretta
Mon Jul 17, 2017 12:49 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

If you want something a bit deeper to read try "Financial Market History: Reflections on the Past for Investors Today", edited by by David Chambers and Elroy Dimson. Its academic but readable. It may give you a better grounding in your thinking. I've begun to read the book and it's excell...
by Lauretta
Mon Jul 17, 2017 10:28 am
Forum: Investing - Help with Personal Investments
Topic: Your opinion on how safe the French Assurance Vie contract is
Replies: 5
Views: 573

Re: Your opinion on how safe the French Assurance Vie contract is

Typically these funds will also build a "reserve" from which they can still make a distribution in the bad years. Hi BeBH65 thanks for your post! :happy Yes, I thought that the reserve is a good thing now that one can lose money when investing in bonds because of negative rates in EU. At ...
by Lauretta
Thu Jul 13, 2017 10:42 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

If you want something a bit deeper to read try "Financial Market History: Reflections on the Past for Investors Today", edited by by David Chambers and Elroy Dimson. Its academic but readable. It may give you a better grounding in your thinking. thank you alex_686! :happy I've heard of Di...
by Lauretta
Thu Jul 13, 2017 4:57 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

Not sure my message was clear enough, by buying stocks you are taking on much more risk than by holding currencies different from the Euro. This article I just found claims the opposite http://tweedy.com/resources/library_docs/papers/HowHedgingOct2014Fund.pdf It looks like different approaches are ...
by Lauretta
Thu Jul 13, 2017 4:39 am
Forum: Investing - Help with Personal Investments
Topic: Can you 'get paid' when currency hedging?
Replies: 11
Views: 920

Can you 'get paid' when currency hedging?

Hi, If the currency hedging cost is determined by the interest rates differential of the two currencies; does it mean that in some cases you actually get 'paid' to hedge (when rates are higher in your currency than in the foreign one)? Also, I've seen that some ETFs are daily hedged and others (like...
by Lauretta
Wed Jul 12, 2017 3:42 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

Not sure my message was clear enough, by buying stocks you are taking on much more risk than by holding currencies different from the Euro. This article I just found claims the opposite http://tweedy.com/resources/library_docs/papers/HowHedgingOct2014Fund.pdf It looks like different approaches are ...
by Lauretta
Mon Jul 10, 2017 5:40 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?

selters wrote:The Eurozone, or at least EU countries, is the largest economic area in the world, larger than the US economy.

ah bon?! :o :o :o as the French would say...
by Lauretta
Mon Jul 10, 2017 5:38 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?

Personally I believe that the academic findings are/were valid but I am not sure if an european investor can really implement this strategy with the funds at our disposal. A couple of months ago I opened a thread about it , in case you are interested. Very interesting thread, I have begun reading i...
by Lauretta
Mon Jul 10, 2017 4:54 am
Forum: Investing - Help with Personal Investments
Topic: Your opinion on how safe the French Assurance Vie contract is
Replies: 5
Views: 573

Your opinion on how safe the French Assurance Vie contract is

Hello, This is a question related to my previous one on the low (or negative) yield of EU bonds. As an Italian who has been until recently a French resident, I have opened Assurance Vie contracts, which I am allowed to keep when living and retiring in Italy. The 'Fonds en Euro' of that contract hold...
by Lauretta
Mon Jul 10, 2017 3:12 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

I personally never liked very much Amundi, mainly because they used to issue a lot of synthetic ETFs. Now that the new UCITS regulations reduced synthetic ETFs risk and Amundi started to introduce more physical (and apparently good) funds my opinion is improving: you have to analyze the specific fu...
by Lauretta
Sun Jul 09, 2017 8:53 pm
Forum: Investing - Theory, News & General
Topic: Weak Evidence for International in Vanguard Research - Am I Missing Something?
Replies: 74
Views: 5094

Re: Weak Evidence for International in Vanguard Research - Am I Missing Something?

With these smaller variances, it seems that MPT would suggest only a modest tilt away from the world market towards one's home currency, say 5% or so. Ah ok; but if your calculation was based on modern portfolio theory (as I said I didn't understand it), apparently many people question whether one ...
by Lauretta
Sun Jul 09, 2017 3:20 pm
Forum: Investing - Theory, News & General
Topic: Weak Evidence for International in Vanguard Research - Am I Missing Something?
Replies: 74
Views: 5094

Re: Weak Evidence for International in Vanguard Research - Am I Missing Something?

Here's a simple mathematical exercise that I found instructive. Assume the US market and the exUS market both have the same variance. Then the optimal (minimum variance) portfolio is 50-50, no matter what the correlation R between the two markets is. (50-50 is also pretty close to current valuation...
by Lauretta
Sun Jul 09, 2017 10:33 am
Forum: Investing - Theory, News & General
Topic: US citizens abroad - more on PFICs
Replies: 6
Views: 1365

Re: US citizens abroad - more on PFICs

Hi anyone has any idea of how safe the 'Fonds en Euro' of the French Assurance Vie is? (I opened one when I was resident in France) They garantee your capital by law in that fund (plus pay interests every year depending on how they fare), but after all the fund is in great part invested in Eu bonds...
by Lauretta
Sun Jul 09, 2017 9:54 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?

I do not pay attention to statements of overvalues or undervalued regions. I leave it to the global stock market to determine the weight of each region. Hence I am essentially allocated like the MSCI world. I consider the fluctuation of the currencies as part of the mechanics, and trust that the st...
by Lauretta
Sun Jul 09, 2017 6:50 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?

Sometimes I have a hard time to understand why net savers are worried about currency risk, in particular when the currencies involved are the major ones: USD/EUR/CHF/GPB.. Assuming EU investor with a global portfolio (50% exposed to USD): 1) If the USD appreciates, it means the current portfolio va...
by Lauretta
Sun Jul 09, 2017 6:25 am
Forum: Personal Consumer Issues
Topic: cost of Solar Power
Replies: 99
Views: 7914

Re: cost of Solar Power

The real excitement comes in more efficient conversion of sunlight. Current cells average around 20% I believe, and 40% must be doable. There may also be some clever tricks to deal with cloudy or rainy days (not sure). Great to see there is interest in solar energy on this Forum! :) As I know much ...
by Lauretta
Sun Jul 09, 2017 2:07 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

The question is this: I live in the EU, which is a small portion of the world stock market by market cap. I'm surprised no one has reacted to this statement, unless I missed it. "A small portion of the world stock market"? The EU (developed and emerging) is about 23% of world stock at lea...
by Lauretta
Sat Jul 08, 2017 2:42 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

Thesaints wrote:Why do you stop at geographical areas ? I'm sure there are stocks that appear overpriced on the Euro Stoxx as well.


because going beyond geographical areas and looking for individual undervalued stocks is what the Vanguard World Value ETF in my suggested allocation does.
by Lauretta
Sat Jul 08, 2017 12:11 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

Someone mentioned low volatility. All of the data I have seen suggest low vol is now a very "expensive" strategy-- those stocks have been bid up due to the number of funds and ETFs launched on the premise. One could be buying into something quite expensive. Does this include low volatilit...
by Lauretta
Sat Jul 08, 2017 11:07 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

I personally never liked very much Amundi, mainly because they used to issue a lot of synthetic ETFs. Now that the new UCITS regulations reduced synthetic ETFs risk and Amundi started to introduce more physical (and apparently good) funds my opinion is improving: you have to analyze the specific fu...
by Lauretta
Sat Jul 08, 2017 9:11 am
Forum: Investing - Theory, News & General
Topic: US citizens abroad - more on PFICs
Replies: 6
Views: 1365

Re: US citizens abroad - more on PFICs

Hi anyone has any idea of how safe the 'Fonds en Euro' of the French Assurance Vie is? (I opened one when I was resident in France) They garantee your capital by law in that fund (plus pay interests every year depending on how they fare), but after all the fund is in great part invested in Eu bonds,...
by Lauretta
Sat Jul 08, 2017 6:03 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

If I had to buy a bond fund now I'd choose a euro edged global bond fund, as Valuethinker suggested. Check the Going global with bonds Vanguard paper for more details. . Grazie Fabio, I had reached the same conclusion too on the bond fund based on Valuethinker's advice. In case you have an opinion ...
by Lauretta
Fri Jul 07, 2017 5:08 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

also thought I'd share this page, since (besides the question of currency conversion), valuations are one of the things that had influenced me most in coming up with the allocation in my first message. http://www.starcapital.de/research/stockmarketvaluation as this document shows, the US is the leas...
by Lauretta
Fri Jul 07, 2017 1:40 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

Your allocation is a huge vote against the US market. My personal preference is not to make any large bet for or against a foreign country but also due to concentration risk to limit a country to max 40% total for stocks and bonds combined. Personally that puts me at about 30% US stock and 10% US b...
by Lauretta
Fri Jul 07, 2017 12:24 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

I am not saying the Euro will go back up, but it can't go down much further. Then I'm picking quite a bad time to invest in the US as far as currency rates are concerned! :oops: :D Oh well... By the way I chose that period for my example simply because I found a graph on the web going back only ten...
by Lauretta
Fri Jul 07, 2017 10:19 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

4% gold will neither kill you nor harm you much. It matters how you hold that gold-- thanks for all these excellent points! Woud you recommend Bullionvault for gold? I had indeed thought about the impact of non Euro countries to MSCI Europe, so I had thought of holding some MSCI Europe (the equival...
by Lauretta
Fri Jul 07, 2017 10:03 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

For equities, currency diversification does not make sense because there is not much currency risk. Currency exchange rates are bounded by Purchasing Power Parity (PPP). A currency may be overvalued or undervalued by 20% but it is hard for currencies to get more out of whack than that. PPP keeps pu...
by Lauretta
Fri Jul 07, 2017 9:26 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

I also suggest you to read the Investing from Italy wiki page. Hi again Fabio, I checked the page; I see that for the bond part of the portfolio they suggest a short term EU governement bond. 2 questions: are you not afreaid of the possibility of default (unlike the US, some EU goverments may defau...
by Lauretta
Fri Jul 07, 2017 9:12 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

[ Both ETFs are accumulating (as you pay taxes on dividends these are more tax efficient). Ciao Fabio grazie! :) great to hear from an Italian! Yes I had undestood about taxes and accumulating, which is a pity because I would have preferred Vanguard but they pay dividends unlike ishares :( There ar...
by Lauretta
Fri Jul 07, 2017 3:40 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

I must stress that "currency diversification" is not the reason to invest abroad. "Currency diversification" = "currency risk" for the individual investor and since it is risk that comes with no additional expected return, it should be avoided in most cases. Good point...
by Lauretta
Thu Jul 06, 2017 4:29 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

Thirdly, like Thesaints mentioned, you will probably already hold a large % of your portfolio in euros; at least your emergency fund, home, human capital and perhaps bonds/cash. You should welcome other currencies to hedge against things going badly in Europe. Thanks smesman, yes I think it's a ver...
by Lauretta
Thu Jul 06, 2017 3:26 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

It appears you are profoundly overweighting europe and underweighting the USA in your proposed portfolio. But I'm not certain which stocks "small cap value euro" means. I agree with your decision to avoid currency hedging. Some degree of overweighting European stocks is sensible as a resi...
by Lauretta
Thu Jul 06, 2017 2:44 pm
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Re: Is the 'global market portfolio' rational for someone living in a small economic area like the EU?

As your proposed allocation is concerned, I wouldn't include gold to begin with. It really has no role in a modern (i.e. post 1971) portfolio. In all likelyhood it will be a drag on your performance and won't bring benefits in terms of reduced volatility. For the stocks component, I don't see any g...
by Lauretta
Thu Jul 06, 2017 8:09 am
Forum: Investing - Help with Personal Investments
Topic: Would I be bound to lose money if I bought a EU bond fund?
Replies: 16
Views: 980

Re: Would I be bound to loose money if I bought a EU bond fund?

GoldenFinch wrote:Welcome to the forum! I just want to point out that I think you mean "lose" money in your title and not "loose" money. If so, you can edit it for clarity. :happy


oops :D :D thanks! I fixed it :happy
by Lauretta
Thu Jul 06, 2017 7:06 am
Forum: Investing - Help with Personal Investments
Topic: Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?
Replies: 60
Views: 3119

Is the 'global market portfolio' rational for someone living in a small economic area like the Eurozone?

Hi everybody! this is a follow-up question concerning the stock allocation of my portfolio, following the question I posted yesterday on bonds to which I am receiving some great answers! :happy :happy The question is this: I live in the eurozone, which is a small portion of the world stock market by...
by Lauretta
Thu Jul 06, 2017 6:47 am
Forum: Investing - Help with Personal Investments
Topic: Would I be bound to lose money if I bought a EU bond fund?
Replies: 16
Views: 980

Re: Would I be bound to loose money if I bought a EU bond fund?

In my personal view I think the sweet spot in terms of risk / reward is intermediate corporate bonds. Heck, I even throw in a modest portion of high yield (a.k.a. junk) and preferred stock. I fear a spike in inflation more than I fear deteriorating credit quality. Thank you alex_686 ! Concerning th...
by Lauretta
Thu Jul 06, 2017 5:11 am
Forum: Investing - Help with Personal Investments
Topic: Would I be bound to lose money if I bought a EU bond fund?
Replies: 16
Views: 980

Re: Would I be bound to loose money if I bought a EU bond fund?

Instead of corporate bonds, you can use CD's/savings and allocate a little more to stocks, or high-yield bonds. Check the yield differential between the short term corporate fund you want to buy, after expenses and what banks can do for you. You may want to look up "barbell strategy" as w...
by Lauretta
Wed Jul 05, 2017 12:33 pm
Forum: Investing - Help with Personal Investments
Topic: Would I be bound to lose money if I bought a EU bond fund?
Replies: 16
Views: 980

Re: Would I be bound to loose money if I bought a EU bond fund?

Thanks Thesaints and alex_686 for your replies! alex_686 yes, the corporate bond fund is a good idea. I imagine short term is best (?), since the interest rate sensitivity would be less. The idea would be to have a stable component to my portfolio, so that I would feel safety there and I would forge...
by Lauretta
Wed Jul 05, 2017 6:59 am
Forum: Investing - Help with Personal Investments
Topic: Would I be bound to lose money if I bought a EU bond fund?
Replies: 16
Views: 980

Would I be bound to lose money if I bought a EU bond fund?

Hi everybody, I have just joined this website, and as a premise I would like to say that I live in Europe and I am investing for my retirement in Euroland. So I don't know whether my question will be of interest to people on this Forum, however I've seen that there are a lot of smart people here who...

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