Personal Finance Thread

[Daemon]

Bit of background on my own finances

I've been working for slightly under 2 years and save quite a lot of my income as I'm still staying with my parents #justasianthings

My assets are approximately

75% cash
10% ETFs with predominantly Asian exposure
10% REITs (weldone will hate this)
5% Leftover Bitcoin from the good old days

I'm thinking of waiting a bit more for markets to drop over the next couple of weeks or so before starting to put significantly more into ETFs and diversify a bit now that I've saved up enough capital to do so. Looking at a longish investment horizon of about 10 years. I don't like the idea of trading individual stocks at this point and have a low-moderate risk appetite.

Not convinced though and would appreciate some advice.

What are your own strategies?

 

[vcs]

Just give it all to my retired Chartered Accountant father who takes care of everything for me. #justAsianThings

 

[Chewie]

I've lost tens of thousands in the past month due to the sharemarket T_T

 

[Adders]

My advice Daemon......give half VCS's dad and the other half to Chewie, See how you go Bro.

 

[Daemon]

Maybe I should dump it all on Sri Lanka winning the T20 WC

 

[zorax]

urrgghh this thread reminds me that i need to start investing soon too

just do not look forward to the extra responsibility. Feel like I've got enough to think about already.

 

[sledger]

urrgghh this thread reminds me that i need to start investing soon too

just do not look forward to the extra responsibility. Feel like I've got enough to think about already.

Don't do it then

 

[Athlai]

Ya'll mother ****ers have money?

 

[sledger]

Keep it in a jam jar under the bed.

 

[RossTaylorsBox]

Check out moneyjar here with his fancy bed.

 

[Redbacks]

I would say it’s better to become clear on why you have your current asset allocations and then answer the question

what’s changed with my current risk profile and why? If it’s mostly related to prices dropping it’s probably better to cool off and make sure you aren’t caught up in the bias for action which leads mostly to poor outcomes.

 

[Son Of Coco]

My main assets are my bubbly personality and my scintillating repartee.

 

[Adders]

My biggest asset is the beer I've been Covid stockpiling. **** toilet paper and guns.......i know where it's at.

 

[Daemon]

I would say it’s better to become clear on why you have your current asset allocations and then answer the question

what’s changed with my current risk profile and why? If it’s mostly related to prices dropping it’s probably better to cool off and make sure you aren’t caught up in the bias for action which leads mostly to poor outcomes.

Yes prices dropping is certainly a big factor. However my risk profile hasn't really changed, it's just that I've been very lazy.

 

[Redbacks]

Yes prices dropping is certainly a big factor. However my risk profile hasn't really changed, it's just that I've been very lazy.

To go from 75% cash to equities is taking on more risk, but then you would also be exposing yourself to potentially greater returns. I suppose you want to be clear on the time horizon and it could be costly if you need to pull out funds in the short term if the market does for example exactly what we see now.

I think of of two risk factors that deliver returns:

Idiosyncratic risk : the individual risk of each company which could see a change in law, new competitor, new technology completely change their value (potentially massively up or down)
Market risk: which is a premium paid for owning private companies equal to about: GDP growth + inflation p.a. so something like 6% per year over the past 100 years

So if you can buy an index fund which bundles a few hundred of the biggest companies together and captures most of the market you get a more reliable outcome and bet on capitalism and economic growth rather than knowing something the market doesn't. Which according to the Efficient Market Hypothesis is really hard to do consistently.

If you think of the stock market as a large part of the private market, every time someone trades, 1 person makes a good decision and 1 bad about the future returns of the individual stock. Own a large share of the better companies and it's really a piece of the whole pie not dependent of making a heap of correct predictions which tends to grow over the long term.

 

[D/L]

Bit of background on my own finances

I've been working for slightly under 2 years and save quite a lot of my income as I'm still staying with my parents #justasianthings

My assets are approximately

75% cash
10% ETFs with predominantly Asian exposure
10% REITs (weldone will hate this)
5% Leftover Bitcoin from the good old days

I'm thinking of waiting a bit more for markets to drop over the next couple of weeks or so before starting to put significantly more into ETFs and diversify a bit now that I've saved up enough capital to do so. Looking at a longish investment horizon of about 10 years. I don't like the idea of trading individual stocks at this point and have a low-moderate risk appetite.

Not convinced though and would appreciate some advice.

What are your own strategies?

Re stocks and shares, if one is a natural optimist (as I think I am) and think it likely that markets will eventually recover to somewhere near their peak within the next few months, now is a good time to buy.

 

[Daemon]

Hope you guys are all holding up well.

Seeing some really depressing stories right now about people (mostly small business owners and freelancers) who're getting wrecked financially.

 

[zorax]

been considering buying some stocks lately. mainly blue chip stocks whose prices are down now due to the virus.

 

[Daemon]

been considering buying some stocks lately. mainly blue chip stocks whose prices are down now due to the virus.

Markets have recovered a fair bit already although it's impossible to say if it's just a dead cat bounce or an actual recovery.

 

[D/L]

Markets have recovered a fair bit already although it's impossible to say if it's just a dead cat bounce or an actual recovery.

I reckon it's the former.