Does this look like a workable retirement investment plan for me and my siblings? [Germany]

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TheGreek
Posts: 1
Joined: Mon Oct 22, 2018 5:49 am

Does this look like a workable retirement investment plan for me and my siblings? [Germany]

Post by TheGreek » Mon Oct 22, 2018 8:22 am

Hello,

That is my first posting on Bogleheads.org :D

I'm a 30 year old rookie in the area of investing, trying to set up a workable retirement investment plan for me and my siblings. As I am a resident of Germany, there is no tax-examined way of investing in the stock market (at least none I know about - no IRA or 401K). I am planning to save into a regular depot of a brokerage firm (ING_DiBa).

I am planning to invest 75% of my monthly payments into an “ETF-market portfolio” made up of the Vanguard FTSE All-World UCITS ETF (TER: 0.25%), which will constitute 70% of the “ETF-market portfolio”. The remaining 30% will be evenly distributed between the following bond-ETFs:
• iShares Euro Aggregate Bond UCITS ETF (TER: 0.25%)
• iShares Euro Corporate Bond Large Cap UCITS ETF (TER: 0.20%)
• Xtrackers II Global Inflation-Linked Bond UCITS ETF 1C - EUR Hedged (TER: 0.25%).

Besides the “ETF-market portfolio” I am planning to invest 25% with a Capital Asset Management firm that manages the risk (set at 20% VaR) and not the return on the portfolio! This Capital Asset Management has a TER of about 1%.

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The way I am planning to go about is the following:

Procedure during the saving phase (today until 10 years before retirement):
1. Update the exemption order for the saver's lump sum annually
2. "Rebalancing light" - only within the market portfolio:
Once a year, coupon & dividend income is used to buy the position, which has fallen the most below the target value in terms of percentage.
3. As soon as a value of € 10,000 has been reaches in the "market portfolio" → Open with this money an account at Scalable Capital Asset Management (with 20% VaR). Then continue to pay into the market portfolio until reaching a ratio of 75/25 (see first page) and then continue to invest 25% of the monthly invested capital in the Scalable Depot.
4. Should one of the ETFs be taken off the market:
Choose a replacement ETF according to the criteria:
- Same investment universe (FTSE All-World Index or MSCI ACWI; investment grade bonds)
- Physically replicating
- Cost-effective (TER pa)
(Prioritize in this order)
Should Scalable Capital Asset Management leave the market:
Choose/find an alternative (TER ≤ 1%) that manages the risk (20% VaR) and not the return on the portfolio!
5. Just in case there are GDP-linked bonds in the future and ETFs for this bond type:
Divert 5% of the Vanguard FTSE All-World into this dond and continue to do so in the future
(65% Vang FTSE AW & 5% in GDP-linked bonds. This "bonds" are more like "state shares" than "bonds.")

Procedure in the last years of saving (I. 10 to 5 years before and II. in the last 5 years before retirement):
Asset Allocation and Monthly Deposits adapted to the Cyclically Adjusted P / E Ratio (Shiller & Campbell). In the last ten years "real" rebalancing once a year if and only if
- there is a change between CAPE Groups, only in the direction of "security" and only in the market portfolio.

I. Invest 1% of the total value in precious metals (Krugerrand) yearly - 1st year silver and 2nd - 5th year gold. And additional rebalancing of the market portfolio if the CAPE ratio (FTSE All-World and / or MSCI ACWI) changes
<25 : 70% equities & possibly GDP-linked bonds / 30% other bonds
≥25 : 60% equities & possibly GDP-linked bonds / 40% other bonds
≥ 35 : 50% equities & possibly GDP-linked bonds / 50% other bonds

II. Invest 1% of the total value in precious metals (Krugerrand) yearly - 1st year silver and 2nd - 5th year gold. And additional rebalancing of the market portfolio if the CAPE ratio (FTSE All-World and / or MSCI ACWI) changes
<25 : 70% equities & possibly GDP-linked bonds / 30% other bonds
≥25 : 60% equities & possibly GDP-linked bonds / 40% other bonds
≥ 35 : 50% equities & possibly GDP-linked bonds / 50% other bonds

Retirement phase:
1. Reverse asset allocation in the market portfolio:
40% shares and possibly GDP-linked bonds
60% remaining bonds
2. Reduce VaR in the Scalable Capital Depot to 10%.
3. Real rebalancing:
(Market portfolio: 40% stocks / 60% bonds [± 10%] & 75% market portfolio / 25% scalable capital [± 10%]).
4. Payments:
Liquidate 3-4% of the deposit value (including last year's coupons & dividends) annually (in years with a negative Depot development 3% and in years with a positive depot development up to 4%).
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As I would like to set up a workable retirement investment plan for more than just myself and I am afraid of being to self-confident when it comes to “MY PLAN” I hope that the community can help me with finding the weaknesses and mistakes I might have incorporated into it. I am open and looking forward to any suggestions for improvements.

Thank you all in advance

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