[EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

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Vision
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[EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

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MotoTrojan
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by MotoTrojan »

You're 30 years old and I assume are accumulating rather than drawing down... you should want a 40-60% equity decline so that you can buy cheaper stocks, assuming you have a secure job.

Do you know what exactly this strategy was? There are no magic strategies to reduce downside risk without reducing upside. Maybe 90/10 is just too risky for you. There is nothing wrong with using 60/40 or 70/30 and holding it forever (or until retirement approaches).

Realistically I am guessing you got sold on some magic market timing strategy which doesn't work 100% of the time, and never had a massive drawdown to test it out. More likely you just had a knockdown in performance over the recent years of great S&P500 returns.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Sandtrap »

A 4rth direction if you care to take it.

Post for a portfolio review and get comprehensive input from forum portfolio experts.
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Brantley »

Vision wrote: Wed Jul 24, 2019 5:23 pm
Sandtrap wrote: Wed Jul 24, 2019 5:15 pm A 4rth direction if you care to take it.

Post for a portfolio review and get comprehensive input from forum portfolio experts.
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Sounds like a good idea. Do I post it in this section at "Personal Investments"?
I would suggest editing your first post.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Sandtrap »

Vision wrote: Wed Jul 24, 2019 5:23 pm
Sandtrap wrote: Wed Jul 24, 2019 5:15 pm A 4rth direction if you care to take it.

Post for a portfolio review and get comprehensive input from forum portfolio experts.
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Sounds like a good idea. Do I post it in this section at "Personal Investments"?
Yes.
Do your best to follow the format.
Remember to put in the fund names as well as the "tickers", not everyone knows the tickers by heart.
Also, be sure to put "portfolio review request" blah blah blah in the title so that the portfolio reviewers can spot it since the board get's busy.
You can discuss back and forth as the reviews come in. It's good stuff. Wouldn't hurt.

You can either insert it into your first post (pencil icon) and change the title. Or start a new post if you think it's too messy as it is now. Up to you. both work.

Good luck.
j :happy
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RadAudit
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by RadAudit »

Vision wrote: Wed Jul 24, 2019 5:05 pm If I "keep holding" with current portfolio and we get a recession I'm screwed as its currently fully invested in US stock market.
Might have missed it; but, why if you are in Europe do you invest mostly in the US?
Vision wrote: Wed Jul 24, 2019 4:26 pm I just used the Boglehead buy and hold strategy by having 10% in bond index and 90% in SPY index. But that would have not prevented a huge downturn of my portfolio during the recession.
A 90 / 10 portfolio will take a hit in a recession. All the time. Almost guaranteed. If that is the way you're going to go, that's what is going to happen.
Vision wrote: Wed Jul 24, 2019 4:26 pm I had a person consulting me in terms of my account management (telling me which orders to put in and when
It's one of the risks to a portfolio managed by an adviser. Especially if you don't understand what he is doing. My condolences on the passing of your adviser,

I'd suggest looking at the Three Fund Portfolio thread on this site. I'd also suggest increasing your allocation to international stocks and bonds.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by MotoTrojan »

Vision wrote: Wed Jul 24, 2019 5:05 pm
This is not the case at all. It was not magic market timing. Just reducing downside by selling upon first signs of bear market, but he used lots of indicators and I don't know how to use them all and don't have time to learn. He reduced downside and also reduced upside, which is fine by me, because I want peace of mind.

If I "keep holding" with current portfolio and we get a recession I'm screwed as its currently fully invested in US stock market.
This is market timing, just own it. Also what you said in the bold text is exactly what adding bonds accomplishes. I fear that you are prone to making some big mistakes by assuming you can maintain upside but reduce downside; it is absolutely impossible to do this without significant risk of underperforming a buy & hold portfolio.

In my humble opinion this adviser took your money and did something quite complex that yielded results similar to what a basic portfolio could accomplish, and honestly likely had some additional systemic risks.

If you could provide us an idea of how large your portfolio is relative to your annual expenses we could give you input on what allocation would be best for perpetual withdrawals, and whether you have enough to safely "retire" as it seems you are.

NO portfolio "needs" to be professionally managed. You could literally have $10B in the three-fund and do fine, likely better than a hedgefund even.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by abyan »

I'm still not sure I understand why, at such a young age, you care if your investments drop 50% during a recession. Do you need to access the money some time in the near future? Is any of this money intended for your retirement? If yes to the second question, if this were me, and I were trying to calculate a correct asset allocation for me, I'd invest the retirement money -- not the money I might need in the next few years -- 100% in a 100% total stock market index fund. Anything you want to access in the next five years, find other vehicles like CDs etc that folks on here can help you with.

But I'm still curious to get more information from you as to WHEN you plan to access this money, and how much of it you think you might need. Because at age 30, I'd be invested in a 100% total market fund and I'd not look at my portfolio for another ten to twenty years.

Having said that, some people freak out during a downturn, and you seem to be suggesting you're that kind of person, then you should hold more bonds to stop yourself from making a costly mistake.
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[EU] Portfolio review, financial consultant passed away recently and I need to change my strategy

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Re: [EU] Portfolio review, financial consultant passed away recently and I need to change my strategy

Post by Sandtrap »

So:
78.3 % in SPDR's (DIA - SPY), and Mid Cap 400 (MDY) equities funds. (please insert name of fund next to tickers).
13% in Bitcoin
8.7 % in Alternatives (gold)
Correct?

What are the "expense ratio's" of the funds?

j
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

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Re: [EU] Portfolio review, financial consultant passed away recently and I need to change my strategy

Post by QuantOfAsia »

I put Bitcoin and gold in one category (non-producing assets you simply hope or fear will rise in value), and 20% is a bit high/speculative for that category in my view. Bitcoin could go to $100,000 or it could (more likely, in my view) fall to near zero, while gold could easily fall to and stay around $1,000 if we enter a deflationary period, and meanwhile neither will pay you a dividend.

Many Americans argue for the "put it all in US stocks" home bias, but US stocks are at cyclically high valuations relative to international and EM stocks. Personally, I'm about 1/3 each on US, non-US developed markets, and emerging markets, as I am especially bullish on emerging markets. Your VTI+VXUS balance should be OK, or you could combine these into a VT position if you prefer, and for EM you could add VWO. For bonds, I could agree you may or may not want to add foreign bonds, and the US Vanguard ETF for that is BNDX.

All of this assumes you live in a country with a good US tax treaty, otherwise, you may also want to look into UCITS versions of these funds as an EU resident.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Brantley »

Vision wrote: Wed Jul 24, 2019 6:10 pm
Might have missed it; but, why if you are in Europe do you invest mostly in the US?
My consultant was in US and he was managing his clients in US.

I think it makes more sense to invest in US as it has more stable longevity than EU.
A 90 / 10 portfolio will take a hit in a recession. All the time. Almost guaranteed. If that is the way you're going to go, that's what is going to happen.
What about 70% SPY, 20% BND, 10% speculative?
It's one of the risks to a portfolio managed by an adviser. Especially if you don't understand what he is doing. My condolences on the passing of your adviser,

I'd suggest looking at the Three Fund Portfolio thread on this site. I'd also suggest increasing your allocation to international stocks and bonds.
Yes, I initially started with VTI, VXUS, BND three fund portfolio back in 2013. But over years and with help of my advisor I managed to accumulate much larger sums. This was partly due to luck, partly due to patience of mine. I am aware of luck being a large factor, so right now I want to be more conservative with my "wins".

As a EU person - why would I need to invest outside US? Isn't US the first mover anyway? Don't all the INT markets follow US anyway? Isn't US way more stable long term than European Union?
This is market timing, just own it.
Yes, but market timing method also prevents huge downturns, so where is harm in that? It was important for me to not suffer in recession and he would get out early at first warning signs.

I fear that you are prone to making some big mistakes by assuming you can maintain upside but reduce downside;

Why do you assume I said anything about maintaining upside? I never said that, and my financial adviser never said that. You reduce downside AND you reduce upside and I was fine with it, because I don't want to go through los decade or 3 years of pain seeing my portfolio drop 50%.
In my humble opinion this adviser took your money and did something quite complex that yielded results similar to what a basic portfolio could accomplish, and honestly likely had some additional systemic risks.
Wasn't really the case. He didn't "take my money". The money I paid for consulting agreement was peanuts compared to my portfolio and by following his advise I profited heavily. If I was to "keep holding" I would be in way bigger loss right now. And I'm no talking about securities here, but that is besides the point.

As of now, I see switching to boglehead strategy as my most logical solution. Question is - what proportions and what funds?
If you could provide us an idea of how large your portfolio is relative to your annual expenses we could give you input on what allocation would be best for perpetual withdrawals, and whether you have enough to safely "retire" as it seems you are.
My portfolio is about 20x-30x times my annual expenses. I also have a salary that can fully support my annual expenses.
NO portfolio "needs" to be professionally managed. You could literally have $10B in the three-fund and do fine, likely better than a hedgefund even.
This is nice to hear. But which 3fund to choose then and in what proportions and how often to rebalance?
I'm still not sure I understand why, at such a young age, you care if your investments drop 50% during a recession.
I experience intense physical and psychological pain seeing my wealth diminish. I'm not a robot.
Do you need to access the money some time in the near future?
No right now. I don't think I will in near future. If I have an amazing business idea I might use some part of it to invest in business, but not even sure, because I have a separate fund for that already.
, I'd invest the retirement money -- not the money I might need in the next few years -- 100% in a 100% total stock market index fund.
What happens if financial system collapses due to all Fed money printing and global debt growing faster than global wealth which would mathematically eventually lead to a collapse? This is one thing that worries me to be honest.
Having said that, some people freak out during a downturn, and you seem to be suggesting you're that kind of person, then you should hold more bonds to stop yourself from making a costly mistake.
I've never sold anything low, but I just feel really bad. So I won't do any mistakes and keep holding, but it will impact my mood for sure.
A few significant things stuck out to me:
1) How have you evaluated the performance of your previous advisor? Curious to know what you were benchmarking against.
2) Is the significant balance in your portfolio purely due to returns, or was there some sort of inheritance or other source of funds?
3) What were the fees for this advisor? Was it a percentage of your assets? How much?
4) You seem to have some misperceptions about exiting the market to prevent losses. This really is market timing, and if you are truly uncomfortable with risk, a better move is to reduce your equity exposure. This isn’t necessarily going to prevent losses, and you can easily miss out on significant gains.
5) You should take a closer look at international exposure. Vanguard has some good white papers on this that I can share if you are interested.
~Brantley
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Re: [EU] Portfolio review, financial consultant passed away recently and I need to change my strategy

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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by LadyGeek »

This thread is now in the Non-US Investing forum (EU).
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Brantley »

Vision wrote: Wed Jul 24, 2019 7:18 pm
1) How have you evaluated the performance of your previous advisor? Curious to know what you were benchmarking against.
No, I must admit I have not, but should of.
Ok this is absolutely critical. Many of your perceptions of the out performance of your advisor may not match reality if you are not sure how he was truly performing
Vision wrote: Wed Jul 24, 2019 7:18 pm
2) Is the significant balance in your portfolio purely due to returns, or was there some sort of inheritance or other source of funds?
Return, but not from boglehead strategy and only partly from my consultant/advisor. Largely due to what I talked about in 2013 on this same forum:
viewtopic.php?f=10&t=114141&p=1659350
Was this at the advise of your advisor - looks like you made it in crypto? Seems to be a disconnect on managing an equity based portfolio vs. gambling.
Vision wrote: Wed Jul 24, 2019 7:18 pm
3) What were the fees for this advisor? Was it a percentage of your assets? How much?
My fees were not percentage, I paid him flat consulting rate. So it was miniscule for info he provided.
Ok did this advisor manage your portfolio for you then (execute trades) or just give you tips?
Vision wrote: Wed Jul 24, 2019 7:18 pm
4) You seem to have some misperceptions about exiting the market to prevent losses. This really is market timing, and if you are truly uncomfortable with risk, a better move is to reduce your equity exposure. This isn’t necessarily going to prevent losses, and you can easily miss out on significant gains.
What is the misconception? If moving averages are hit and tilt down then trend is about to change and you get out so you don't ride the donwtrend. Sure you also get in later and limit uptrend, but essentially you prevent seeing your portfolio drop 40%. I agree you can miss out on gains, but I was fine with that as long as I avoided losses.
I just don't understand your logic here. For example, if you were to sell this year every time the market dips your missed opportunity on the upswing would have heavily outweighed your losses. If you were able to perfectly predict when to get back in, yes this method works, but spend some more time researching this topic. It usually does not work in your favor.
Vision wrote: Wed Jul 24, 2019 7:18 pm
5) You should take a closer look at international exposure. Vanguard has some good white papers on this that I can share if you are interested.
I am interested. I don't understand why I need this international exposure. I don't see how this will prevent currency risk when my broker lists everything in USD anyway. Other than that - what is the point?
There is not a perfect answer, but do some more research on this. https://www.vanguard.com/pdf/ISGGEB.pdf
Vision wrote: Wed Jul 24, 2019 7:18 pmAlso, my initial fund idea was:
60% VTI
30% VXUS
10% BND.

I swayed off it due to working with this advisor. He did help me maintain more capital in more speculative positions, so I'm very thankful for that, but maybe in terms of stocks and indexing I should have stayed the course. That is ok, I'm still in a good position and will be solely responsible for everything I do from now on, so wha are thoughts on above distribution? Do I even need that VXUS? Maybe increase BND to reduce risk?
Looks like you are proposing the three fund portfolio, which is very simple and a great portfolio. I think you need to do some more reading, really map out when you will need the money, and closely evaluate your risk profile.
~Brantley
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Laurizas »

Vision wrote: Wed Jul 24, 2019 4:26 pm I had a person consulting me in terms of my account management (telling me which orders to put in and when). His strategy was very risk averse, long term, which is what I liked. Before him I just used the Boglehead buy and hold strategy by having 10% in bond index and 90% in SPY index. But that would have not prevented a huge downturn of my portfolio during the recession. This person had strategy to get out early of bear markets to prevent loss of capital.

Now I don't know how to proceed. I learned some very basic things from him, but not nearly enough to feel confident in managing my portfolio.
If we agree that flying with an airplane is safer then driving with a car (though I could not quickly find any scientific study, but we all hear this time from time), then you are afraid of dying but still travelling in a car. That's how your experience looks from the perspective of majority forum members. I recommend you a plane instead of a car or to search for another car driver. But still, chances are he will underperform in the long run.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Vision »

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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Valuethinker »

Vision wrote: Thu Jul 25, 2019 3:16 am

I don't agree. Flying an airplane is risky. Percentage wise way more fatalities in airplanes than cars. How is plane safer?
This is absolutely false.

An estimated 1 million people die p.a. on the roads worldwide. That does not include the severely injured.

Nothing like that die in aviation crashes.

If we are talking scheduled airliners, then per passenger km they are 10-100x safer than cars. Even per journey (flights are usually much longer) the losses are still only a lesser percentage than per car journey.

There was in fact one year in the 00s when there were no deaths on regularly scheduled commercial airline flights.

Now if we throw in light planes & non commercial flights, it will be a much riskier activity. I don't deny your chances, as a private pilot, of dying are much higher than in a regularly scheduled airline flight. But that is a minority hobby - how many people do you know who regularly fly light planes, either commercially or as a leisure activity? (I live in an advanced economy, and I'd guess it's around 1 in 100). I would submit their chance of dying in a car crash is still higher.

And of course lots of people survive car crashes. In fact my mother has had 2 severe car crashes in her life - she was quite badly injured in the first (in the 1940s safety equipment is not what it was). The kicker: my mother does not even have a driving license - she was a passenger in both cases.

Those crashes (where people survived, but often had life-changing injuries) will not be in the automotive fatality statistics. And pedestrian and cyclist deaths due to cars are often excluded from the safety statistics.

What you are suffering from is salience. Your judgement of a probability is impaired by what your brain notices about the world. Big airliner crashes get a lot of news coverage - MH 370, the missing airliner, for example. Lots of people die at once - it makes the news.

Car accidents happen every day and are just background news. Only the families of the victims notice, and maybe the local news media.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by danielbird193 »

Vision wrote: Thu Jul 25, 2019 3:16 am I don't agree. Flying an airplane is risky. Percentage wise way more fatalities in airplanes than cars. How is plane safer?
It's not a matter of agreeing or disagreeing. The statistics speak for themselves. From the UK's Civil Aviation Authority: https://www.caa.co.uk/Consumers/Guide-t ... on-safety/

There is an average of one fatality for every 287 million passengers carried by UK [airlines]. This can be compared with a one in 19 million chance of being struck and killed by lightning in the UK or a one in 17,000 chance of being killed in a road accident.

The pattern is similar across the rest of Europe, the USA and other parts of the world.

Peddling the kind of misinformation you espouse is pernicious and should be stamped out.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Jack FFR1846 »

Your manager passing away could be a blessing for you. Your portfolio, if you keep your hands off of it will do better going forward.

Remember Fidelity's report on their 401k customers. Those who did the best were dead. You're in the unusual role that you had someone screwing around with your portfolio and now they're dead. If your investment returns follow what clearly was a winning strategy from Fidelity's results, you're going to overperform.

Congratulations.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by matthewbarnhart »

Vision wrote: Wed Jul 24, 2019 7:18 pmWhat is the misconception? If moving averages are hit and tilt down then trend is about to change and you get out so you don't ride the donwtrend. Sure you also get in later and limit uptrend, but essentially you prevent seeing your portfolio drop 40%. I agree you can miss out on gains, but I was fine with that as long as I avoided losses.
This, right here, is the problem you need to solve.

You have a psychological problem, not an investing problem. Learn to accept that markets are volatile, there is nothing you can do about it, and find a equity:bond ratio that will allow you to sleep well at night.

Based on everything you've written so far, something like the Vanguard Target Retirement Income Fund (VTINX) (30% stocks and 70% bonds) could be a good choice.

Suggested reading: https://jlcollinsnh.com/2012/04/25/stoc ... he-market/
Here’s what Warren Buffett has to say about this:

“The Dow started the last century at 66 and ended at 11,400. How could you lose money during a period like that? A lot of people did because they tried to dance in and out.”
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by RadAudit »

Vision wrote: Thu Jul 25, 2019 3:16 am The guy bought BTC at 3k and sold at 15k, so he knew how to time bubble. This was extremely important in that particular situation, since because of his advice instead of holding like a fool I also got rid of my long term crypto holdings and avoided bubble bursting.

Was this at the advise of your advisor - looks like you made it in crypto? Seems to be a disconnect on managing an equity based portfolio vs. gambling.

It was not gambling. Read my original post, I bough BTC as long term hold in 2013 due to fundamental reasons and never bought/sold more, just held until 2018 when I sold most of it.
Sincerest best wishes on finding the next bubble before it over inflates and getting out before it pops.

But the comment to OP's postings is correct. Investing vs. speculating. Two different approaches. And, since OP made money on this speculation it appears it will take a severe loss - maybe several - before he begins a search for an alternate approach.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by BeBH65 »

Vision wrote: Wed Jul 24, 2019 4:26 pm But that would have not prevented a huge downturn of my portfolio during the recession. This person had strategy to get out early of bear markets to prevent loss of capital.
So how did your portfolio do during Q4 of last year?
During this quarter the us and world stock markets almost went into bear territory (-20% from top).
How did your portfolio do?

And how did it recover in the first month s of 2019?

What trades did your advisor do during this period to protect your portfolio?
Last edited by BeBH65 on Thu Jul 25, 2019 7:49 am, edited 1 time in total.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by danielbird193 »

matthewbarnhart wrote: Thu Jul 25, 2019 7:22 am You have a psychological problem, not an investing problem.
Very astute! The more posts I read on Bogleheads, the more I believe this is the case for the majority of investors (myself included!), and not just a small minority. Whenever I'm tempted not to "stay the course" I'm grateful that I've found this community of wiser heads to keep me on the right path.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Brantley »

You may be a good candidate for Vanguard PAS
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by TedSwippet »

Brantley wrote: Thu Jul 25, 2019 1:48 pm You may be a good candidate for Vanguard PAS
Unlikely. The topic author is a US nonresident alien, and so won't even be eligible to open a Vanguard US account in order to become a Vanguard client.
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Brantley
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Brantley »

TedSwippet wrote: Thu Jul 25, 2019 2:00 pm
Brantley wrote: Thu Jul 25, 2019 1:48 pm You may be a good candidate for Vanguard PAS
Unlikely. The topic author is a US nonresident alien, and so won't even be eligible to open a Vanguard US account in order to become a Vanguard client.
interesting - I didn’t know that. Any comparable options outside the US that are low cost?
~Brantley
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Vision
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Vision »

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MrJones
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by MrJones »

Vision wrote: Thu Jul 25, 2019 1:13 pm Ok, since you quoted statistics I believe you now.
This might explain a lot. Why not look up statistics yourself on the advice you're getting from the collective wisdom here, instead of rejecting it like you initially rejected the statement about planes being safer? You might end up better informed about your own views.

Evaluating your advisor against a benchmark would be a good start.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Katietsu »

But I also do believe that hands off approach might be best for me. Now...how do I determine the right proportions, I'm thinking VTI/VXUS/BND, but in what proportions? Do 40/40/20? 50/30/20? 60/30/10? How can I determine this?
Any of those would be reasonable. The problem is that you must accept that there is no way to know in advance which will be best over your timeframe. That is the hard part, especially for someone who believes that they had an advisor that could successfully time the market and was willing to share that information. You really could just flip a coin to decide between those 3 choices. I understand that this is easy to say but not easy to do.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by Vision »

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BeBH65
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by BeBH65 »

Vision wrote: Thu Jul 25, 2019 1:13 pm But stay what course?

Ok, let us say VTI/VXUS/BND, but...in what proportions
This depends on your need, ability and willingness to take risks. Have a look at the wiki pages on risk and asset allocation.

First decision to take is the split between stable assets and risky assets for growth. Knowing that equity can go down with 50% or more, one already gets a first indication. Say you are willing to have a loss of 30% then one would consider 60% of stocks as a starting point.

As noone knows which region will do best in the future one could consider to start from the market weights for your equity. This would be about 55-60% us stock and the rest non-us. Index funds by definition will keep your allocations to the consensus of the market. No rebalancing will be needed.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by BeBH65 »

What has been the performance of your portfolio over the last 12 months? What has been the maximum drawdown between top and bottom?
Based on this one could determine what passive asset allocation would have achieved the same.

For reference:
- worldwide stocks have gained more then 10% in the last 12 months.
- European aggregate bonds more then 6%
- worldwide bonds hedged to euro about 5%
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles
MotoTrojan
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by MotoTrojan »

Limiting upside and downside means bonds, it’s really that simple. Don’t market time.
sillysaver
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by sillysaver »

What you're asking is how to get decent returns with less risk. More bonds is one way, but the problem is bond returns are so low today.

I kind of like the idea of low-vol ETF's and sector funds in consumer staples & utilities for more defensive portfolios.

Also, look up the "Larry Portfolio".
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by roymeo »

Vision wrote: Thu Jul 25, 2019 1:13 pm
danielbird193 wrote: Thu Jul 25, 2019 4:56 am So how did your portfolio do during Q4 of last year?
During this quarter the us and world stock markets almost went into bear territory (-20% from top).
How did your portfolio do?

And how did it recover in the first month s of 2019?

What trades did your advisor do during this period to protect your portfolio?
Was in cash during that time.

You avoided the question rather than answering it.
At some point...before Q4?...you went all cash?
At some point after the first months of 2019 you went back?

What's the performance of that compared to having left it in the market?
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by matthewbarnhart »

Vision wrote: Thu Jul 25, 2019 1:13 pm
You have a psychological problem, not an investing problem. Learn to accept that markets are volatile, there is nothing you can do about it, and find a equity:bond ratio that will allow you to sleep well at night.
But there is thing you can do about it. When price turns down it hits moving averages, goes under them, then moving average tilts down. This is an indicator of changing market trend from bull to bear. I can absolutely decide to exit market upon the price hitting the moving average or moving average closing weekly tilted down and then get back in with market average tilting upword for bull trend. How doesn't this make sense?
It doesn't make sense because no one can time the market reliably. No one.

Even if they could do it reasonably well, it would have the same net effect of simply buying-and-holding equities and bond index funds at a ratio you're comfortable with.

So you can expend all this effort and employ "wise and wonderful" people to perform this error-prone and difficult process, or you can do the simple thing and buy index funds and never think about it again. This is literally the point of Bogleheads.

Personally, I have other hobbies I enjoy more than market timing. You're rich, let it go and enjoy your time on this Earth already.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by RadAudit »

Vision wrote: Thu Jul 25, 2019 1:13 pm But stay what course?

Ok, let us say VTI/VXUS/BND, but...in what proportions?
Actually, those aren't bad questions. But first, the question that needs to be addressed is what are your need, ability and willingness to accept the risks necessary to meet your financial goals. See Swedroe (?) for a discussion.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by glorat »

RadAudit wrote: Thu Jul 25, 2019 9:43 pm
Vision wrote: Thu Jul 25, 2019 1:13 pm But stay what course?

Ok, let us say VTI/VXUS/BND, but...in what proportions?
Actually, those aren't bad questions. But first, the question that needs to be addressed is what are your need, ability and willingness to accept the risks necessary to meet your financial goals. See Swedroe (?) for a discussion.
Indeed. Right question, right approach.

If you don't yet know, https://personal.vanguard.com/us/FundsInvQuestionnaire is a great place to start
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Re: [EU] My portfolio manager passed away and I could really use advice how to proceed with my portfolio management

Post by LadyGeek »

Here is another place to start: Risk tolerance
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