Hi all, I recently started investing in NISA. I decided that I want to go super simple and bought the eMaxis Slim All World Countries, that as far as I understand replicates the ACWI. I'm not asking to make a portfolio for me, I'd like to know from folks that know more than me which other etf or fund you guys would buy to get a starting portfolio, very simple.
I was thinking to allocate like 20% in the eMaxis slim Emerging countries, but I was reading that they are already included in the world, and having both China and Taiwan in it doesn't make me feel so good. Perhaps I could allocate a 20% into a sp500. I know I'd be overexposing myself in the USA so I'm still doing research. I'm not interested in bonds at the moment, I'll shift into them as I get older.
I just started and in the next years I want to have a nice portfolio, so I hope to get some good advice from this community.
how did you guys started?
by Affectionate_Cow3076
12 comments
Returns on emerging countries has been consistently lower than world
This is just general investment talk here, not NISA related. Any fund of ETF that offers relatively low fees and decent historical returns (would want to see an average of 10-20%+ per year over the last 5-10 years) would be fine. Just look at the fund details to know whats in it.
Overexposing yourself to one country is a risk/return equation and personally I think that’s acceptable risk when young (<40). If by some chance the USA had a financial crisis, the rest of the world wouldn’t come out unscathed anyway.
I just buy (and continue to buy) VT. I can’t see into the future, so I just want to own it all at market cap.
Your current portfolio already gives you exposure to both developed and emerging markets across thousands of companies globally, weighted by market cap, at a low expense ratio.
Adding in lots of different funds into your portfolio makes it more complicated to manage, but not necessarily any better. Search for “lazy portfolio” to learn more.
Thank you guys for the advice
You hire a professional for HNW individuals and they’ll buy a portfolio of stocks based on your goals. You’ll probably beat the index funds that way but it’s not guaranteed and will cost money.
Personally I’m all in on S&P. I do have a small amount of eMaxis all country that I purchased a few years ago but it hasn’t performed as well as the S&P ones. I’m still young (30ish) so I’m not too concerned about the US risk exposure for now.
Any answer to such questions would be largely over-determined. Index investing in principle is about derisking by diversification. But in reality, it only protects against smaller risks within large economic systems, such as companies or technologies that fail or go bankrupt.
Risks that affect entire economic systems, such as global recessions, global wars, pandemics, etc are now more prevalent than ever, and these actually can be correlated across all economies. you might think of investing in economies that are somewhat anti-correlated in some scenarios, such as war in which some win and others lose, or disasters that affect one but not others. But then, what is the probability that you, sitting in a specific economy, may be able to access your appreciated capital back after such events (war or natural disaster)?
Another type of hedge that may help in such scenarios are currency alternatives, such as gold or bitcoin. But these (perhaps not bitcoin at the moment), should only appreciate roughly in concert with inflation. So you would be giving up this capital, it wouldn’t participate in useful economic activity.
A long winded way of saying, perhaps invest in the economic system you are in (provided you believe the overall system works over the long term), and some money could be hedged in a different economic system (provided you believe you could access this capital back in most extreme scenarios), and some money could be hedged in currency alternatives, but it will not appreciate as much as economically useful assets.
I did a bit of trial and error on a few stocks, but not sure I recommend it unless you really like the stock, some of them have interesting 株主優待 tho. Example: I get like a 5000 or 6000 yen from Edion for example once a year. If there are rewards that interest you it might worth holding a specific stock for the reward.
If it helps, MSCI has a China inclusion factor when they publish the ACWI index. Due to the structure of A class shares, Chinese stocks are not included at full market cap weights.
I just own one low-cost global equity fund.
More important than which reasonable portfolio you end up with is how much you can invest every month, and how long you can leave it alone to grow.
Focus on those two (ideally in tax-advantaged accounts like NISA or iDeCo) and you should do very well.
I do a lot of individual stock picking mainly, but for my ideco and tsumitate I do a similar thing to what you mentioned. 70% world +30% emerging markets. The reason is that I want the extra weight exposure to especially TSMC and Chinese large cap that make up the majority of the emerging market index rather than the US. Really, picking other things to add on top of a world index etc. is all about how you want to shift the weight of your portfolio.
Comments are closed.