NRA newbie with no tax treaty (Paraguay)

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Topic Author
RFontes
Posts: 3
Joined: Sun Jun 23, 2019 9:29 pm

NRA newbie with no tax treaty (Paraguay)

Post by RFontes » Wed Jan 15, 2020 11:12 am

Dear Bogleheads,

I've been following this excellent forum for a few months now, while educating myself on the virtues of index investing.

Based on the 110-minus-age rule, I decided on a 60/40 stock/bond allocation with some small caps added:

SWRD - SPDR® MSCI World UCITS ETF USD (Acc) IE00BFY0GT14 - TER 0.12% ---- 48% allocation
EIMI - iShares Core MSCI EM IMI UCITS ETF USD (Acc) IE00BKM4GZ66 - TER 0.18% ---- 6% allocation
WSML - iShares MSCI World Small Cap UCITS ETF USD (Acc) IE00BF4RFH31 - TER 0.35% ---- 6% allocation
AGGU - iShares Core Global Aggregate Bond UCITS ETF USD Hedged (Acc) IE00BZ043R46 - TER 0.10% ---- 40% allocation

Would you kindly share your opinions on these allocation percentages? Should I have more of EIMI and less of WSML, maybe?

I would be investing a lump sum and I feel nervous about doing so when the markets are at all time highs. Would you recommend dollar cost averaging?
Last edited by RFontes on Wed Jan 15, 2020 10:09 pm, edited 1 time in total.

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BeBH65
Posts: 1651
Joined: Sat Jul 04, 2015 7:28 am

Re: NRA newbie with no tax treaty

Post by BeBH65 » Wed Jan 15, 2020 1:42 pm

An asset allocation is a very personal decision based on many inputs.
For instance you hedge your bonds to USD. This can be a good decision or not depending on the coutnry that you live in.

Please consider updating your opening post (use the pencil symbol) based on the template My_portfolio:_seeking_advice.


DCA: have a look here : "DCA is a technique to overcome fear in investing by mitigating the risk of loss over the short term" so this might be applicable to you.
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

Topic Author
RFontes
Posts: 3
Joined: Sun Jun 23, 2019 9:29 pm

Re: NRA newbie with no tax treaty (Paraguay)

Post by RFontes » Sun Jan 19, 2020 9:38 pm

Hedging to USD makes sense for me, but that was not the reason I choose AGGU. It's just that I could not find an unhedged accumulating bond fund.

Valuethinker
Posts: 40208
Joined: Fri May 11, 2007 11:07 am

Re: NRA newbie with no tax treaty (Paraguay)

Post by Valuethinker » Mon Jan 20, 2020 8:07 am

RFontes wrote:
Wed Jan 15, 2020 11:12 am
Dear Bogleheads,

I've been following this excellent forum for a few months now, while educating myself on the virtues of index investing.

Based on the 110-minus-age rule, I decided on a 60/40 stock/bond allocation with some small caps added:

SWRD - SPDR® MSCI World UCITS ETF USD (Acc) IE00BFY0GT14 - TER 0.12% ---- 48% allocation
EIMI - iShares Core MSCI EM IMI UCITS ETF USD (Acc) IE00BKM4GZ66 - TER 0.18% ---- 6% allocation
WSML - iShares MSCI World Small Cap UCITS ETF USD (Acc) IE00BF4RFH31 - TER 0.35% ---- 6% allocation
AGGU - iShares Core Global Aggregate Bond UCITS ETF USD Hedged (Acc) IE00BZ043R46 - TER 0.10% ---- 40% allocation

Would you kindly share your opinions on these allocation percentages? Should I have more of EIMI and less of WSML, maybe?
Rules of thumb:

- 5% changes in stock/ bond allocation matter to final portfolio value
- within stock indices ie your equity portfolio, anything less than 10% is not a "bet" for or against something. Unless you have 10% in a strategy it won't have a big impact on your final portfolio value

Thus I would hold this as you plan and not worry too much about it.

Assuming you are not a US citizen, and assuming there is no capital gains tax to pay in your jurisdiction, this looks fine.
I would be investing a lump sum and I feel nervous about doing so when the markets are at all time highs. Would you recommend dollar cost averaging?
No. If you are too nervous then you should increase your bond or money market weightings. We could have been very nervous 15 months ago, and the market dropped -19% confirming our fears. It then proceeded to rise over 30%.

Laurizas
Posts: 108
Joined: Mon Dec 31, 2018 4:44 am
Location: Lithuania

Re: NRA newbie with no tax treaty (Paraguay)

Post by Laurizas » Mon Jan 20, 2020 3:21 pm

I would simplify, instead of 3 stocks ETFs I would buy only one - Vanguard FTSE All-World UCITS ETF (USD) Accumulating.

Topic Author
RFontes
Posts: 3
Joined: Sun Jun 23, 2019 9:29 pm

Re: NRA newbie with no tax treaty (Paraguay)

Post by RFontes » Tue Jan 28, 2020 6:59 pm

Laurizas wrote:
Mon Jan 20, 2020 3:21 pm
I would simplify, instead of 3 stocks ETFs I would buy only one - Vanguard FTSE All-World UCITS ETF (USD) Accumulating.
I just choose the lowest TER possible.

Speaking of low costs, what pricing structure do you guys have on IBKR?
My account is set to Fixed pricing, but Tiered seems cheaper, unless I'm overlooking something.

imperia
Posts: 213
Joined: Tue Feb 21, 2017 6:31 am

Re: NRA newbie with no tax treaty (Paraguay)

Post by imperia » Wed Jan 29, 2020 2:16 am

Tier is much better, you will save about 30-40%

JimBeam
Posts: 72
Joined: Wed Jan 29, 2020 3:06 am

Re: NRA newbie with no tax treaty (Paraguay)

Post by JimBeam » Wed Jan 29, 2020 3:19 am

RFontes wrote:
Sun Jan 19, 2020 9:38 pm
Hedging to USD makes sense for me, but that was not the reason I choose AGGU. It's just that I could not find an unhedged accumulating bond fund.

Maybe iShares Global AAA-AA Government Bond UCITS USD (ISIN IE00BZ171348) or iShares Global Government Bond UCITS ETF (ISIN IE00BYZ28V50) then? These ones are unhedged accumulating, tracking global government bonds.

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