What is your Asset Allocation?
Zitat von firenow am 16. November 2020, 20:04 UhrHi,
I hope all of you are doing great. I'm wondering what is your asset allocation i.e how much of your portfolio is in stocks vs bonds?
Is there a benefit of holding bonds which are not even giving 0% interest? Can any one educate me why its not better to just hold cash instead of bonds?
Hi,
I hope all of you are doing great. I'm wondering what is your asset allocation i.e how much of your portfolio is in stocks vs bonds?
Is there a benefit of holding bonds which are not even giving 0% interest? Can any one educate me why its not better to just hold cash instead of bonds?
Zitat von Privatier am 16. November 2020, 20:31 UhrToday my bond asset allocation is 0%. Some years ago, I had between 10 and 20% of my portfolio in bonds.
Why hold bonds and not cash?
- Cash is only secured (in Germany) up to max. 100.000 Euro per person per institute. So if you have large sums, like an insurance company, you have to put your money in bonds.
- With bonds you can invest / speculate like with equities. E.g. if the interest rate go down, the bond price will go up.
In the current market environment, in my opinion it does not make sense to hold bonds (unless you have very large cash sums).
Today my bond asset allocation is 0%. Some years ago, I had between 10 and 20% of my portfolio in bonds.
Why hold bonds and not cash?
- Cash is only secured (in Germany) up to max. 100.000 Euro per person per institute. So if you have large sums, like an insurance company, you have to put your money in bonds.
- With bonds you can invest / speculate like with equities. E.g. if the interest rate go down, the bond price will go up.
In the current market environment, in my opinion it does not make sense to hold bonds (unless you have very large cash sums).
Zitat von musicbroker am 16. November 2020, 21:30 UhrMy asset allocation currently is as follows:
Stocks, ETFs: 73%
REITs: 5%
Bonds: 1%
Precious metals: 9%
Cash: 12%I plan to sell my remaining 1% bond portion in the near future and reduce the share to 0% as soon as possible (the bond fund invests in USD bonds, and I hope the US-dollar will appreciate a little bit, before I sell...).
Currently I see no need for a private investor to prefer bonds over cash, unless e.g. you think your bank may go bankrupt and you could loose your money, whereas the bond issuer might not go bankrupt (cf. point 1. made by Privatier).
My asset allocation currently is as follows:
Stocks, ETFs: 73%
REITs: 5%
Bonds: 1%
Precious metals: 9%
Cash: 12%
I plan to sell my remaining 1% bond portion in the near future and reduce the share to 0% as soon as possible (the bond fund invests in USD bonds, and I hope the US-dollar will appreciate a little bit, before I sell...).
Currently I see no need for a private investor to prefer bonds over cash, unless e.g. you think your bank may go bankrupt and you could loose your money, whereas the bond issuer might not go bankrupt (cf. point 1. made by Privatier).
Zitat von firenow am 16. November 2020, 21:34 UhrZitat von Privatier am 16. November 2020, 20:31 UhrToday my bond asset allocation is 0%. Some years ago, I had between 10 and 20% of my portfolio in bonds.
Why hold bonds and not cash?
- Cash is only secured (in Germany) up to max. 100.000 Euro per person per institute. So if you have large sums, like an insurance company, you have to put your money in bonds.
- With bonds you can invest / speculate like with equities. E.g. if the interest rate go down, the bond price will go up.
In the current market environment, in my opinion it does not make sense to hold bonds (unless you have very large cash sums).
So hypothetically speaking, if my bank had an insurance of $$500,000, right now it makes sense to keep cash instead of investing it into bonds. Right?
Zitat von Privatier am 16. November 2020, 20:31 UhrToday my bond asset allocation is 0%. Some years ago, I had between 10 and 20% of my portfolio in bonds.
Why hold bonds and not cash?
- Cash is only secured (in Germany) up to max. 100.000 Euro per person per institute. So if you have large sums, like an insurance company, you have to put your money in bonds.
- With bonds you can invest / speculate like with equities. E.g. if the interest rate go down, the bond price will go up.
In the current market environment, in my opinion it does not make sense to hold bonds (unless you have very large cash sums).
So hypothetically speaking, if my bank had an insurance of $$500,000, right now it makes sense to keep cash instead of investing it into bonds. Right?
Zitat von Andre am 4. Dezember 2020, 17:27 UhrZitat von firenow am 16. November 2020, 21:34 UhrZitat von Privatier am 16. November 2020, 20:31 UhrIn the current market environment, in my opinion it does not make sense to hold bonds (unless you have very large cash sums).
So hypothetically speaking, if my bank had an insurance of $$500,000, right now it makes sense to keep cash instead of investing it into bonds. Right?
Correct
Zitat von firenow am 16. November 2020, 21:34 UhrZitat von Privatier am 16. November 2020, 20:31 UhrIn the current market environment, in my opinion it does not make sense to hold bonds (unless you have very large cash sums).
So hypothetically speaking, if my bank had an insurance of $$500,000, right now it makes sense to keep cash instead of investing it into bonds. Right?
Correct
Zitat von Andre am 4. Dezember 2020, 17:42 UhrMy asset allocation (besides a house where my family and me is living in, cash on hand for short term contingencies and life insurance which cover the risk of being not able to work) is 130 % in stocks:
- All investments are in stocks
- with credit financing of 30 % of the portfolio
- the credit financing would be quite lower (5 %-10%) but due to the fact that I bought my firm with the difference of the credit which I never paid back but instead promised the bank to save in stocks the credit portion is this high.
- I will keep it at that level or a little lower as I pay for the credits mostly below 1 or 2 % mostly tax deductable whereas my stocks return on average above 10 % per year.
All the best
André
My asset allocation (besides a house where my family and me is living in, cash on hand for short term contingencies and life insurance which cover the risk of being not able to work) is 130 % in stocks:
- All investments are in stocks
- with credit financing of 30 % of the portfolio
- the credit financing would be quite lower (5 %-10%) but due to the fact that I bought my firm with the difference of the credit which I never paid back but instead promised the bank to save in stocks the credit portion is this high.
- I will keep it at that level or a little lower as I pay for the credits mostly below 1 or 2 % mostly tax deductable whereas my stocks return on average above 10 % per year.
All the best
André
Zitat von suchenwi am 5. Dezember 2020, 19:30 UhrApologies for no precise percentages, but my portfolio consists of c.15..20% bonds.:
- Emerging markets govt bonds ETFs, paying monthly, often decently
- EUR/USD govt bonds ETFs (not paying much, but high up in price, >20%)
- US High Yield Corporate Bonds
- some individual bonds: German bunds, Austrian, Sixt corporate bonds
When I need cash, I sell German bunds (real value until end 104%, market offers 108.8%...)
Otherwise I just hold (no incentive to buy at higher prices).
Apologies for no precise percentages, but my portfolio consists of c.15..20% bonds.:
- Emerging markets govt bonds ETFs, paying monthly, often decently
- EUR/USD govt bonds ETFs (not paying much, but high up in price, >20%)
- US High Yield Corporate Bonds
- some individual bonds: German bunds, Austrian, Sixt corporate bonds
When I need cash, I sell German bunds (real value until end 104%, market offers 108.8%...)
Otherwise I just hold (no incentive to buy at higher prices).
