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Old 12.01.2017, 15:33
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True Wealth investment portfolios

Long story short:

Having made all the classic mistakes investing individually, including buying peaks, selling dips, investing in wrong assets at wrong moments, paying excessive management fees for managed funds and more, I'm considering to try True Wealth. I did my math and for small investment amounts their fees look to be worth it, considering the ease of paying in, rebalancing, provided tax declaration document etc.

As pointed out in other threads, the basic portfolio suggestions are heavily focused on SMI and Swiss bonds which is hardly diversified, however doing this manually there are many more options. I took the effort and listed all of them available on the Demo Account as of today:

1. Cash
2.1 Bonds: Inflation Linked Bonds
2.2.1 Bonds: Switzerland 1-3Y Bonds
2.2.2 Bonds: Switzerland 3-7Y Bonds
2.2.3 Bonds: Switzerland 7-15Y Bonds
2.2.4 Bonds: Switzerland Corporate Bonds
2.3 Bonds: US Bonds
2.4 Bonds: UK Bonds
2.5.1 Bonds: Emerging Market Bonds
2.5.2 Bonds: US High Yield Bond
3.1 Real Estate Investment Trusts Global (excluding US)
3.2 Real Estate Investment Trusts USA
4.1.1 Natural Resources, Precious Metals: Gold
4.1.2 Natural Resources, Precious Metals: Silver
4.2 Natural Resources diversified
5.1 Equities Switzerland
5.2 Equities Europe
5.3 Equities UK
5.4.1 Equities USA: All sectors market weighted
5.4.2 Equities USA: Energy
5.4.3 Equities USA: Materials
5.4.4 Equities USA: Industrials
5.4.5 Equities USA: Consumer Staples
5.4.6 Equities USA: Consumer Cyclicals
5.4.7 Equities USA: Health Care
5.4.8 Equities USA: Financials
5.4.9 Equities USA: IT
5.4.10 Equities USA: Telecommunication
5.4.11 Equities USA: Utilities
5.5 Equities Asia-Pacific
5.6 Equities Emerging Markets

I've built a sample portfolio with the following asset distribution

3.2 REIT USA - 10%
4.1.1 Natural Resources, Precious Metals: Gold - 5%
4.1.2 Natural Resources, Precious Metals: Silver - 5%
4.2 Natural Resources diversified - 5%
5.1 Equities - 75% (Switzerland - 40%, UK - 10% USA: All sectors 30%, Emerging Markets - 15%)

Does that sound reasonable, or would you do it differently?
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Old 12.01.2017, 15:42
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Re: True Wealth investment portfolios

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Long story short:

Having made all the classic mistakes investing while investing individually, including buying peaks, selling dips, investing in wrong assets at wrong moments, paying excessive management fees for managed funds and more, I'm considering to try True Wealth. I did my math and for small investment amounts their fees look to be worth it, considering the ease of paying in, rebalancing, provided tax declaration document etc.

As pointed out in other threads, the basic portfolio suggestions are heavily focused on SMI and Swiss bonds which is hardly diversified, however doing this manually there are many more options. I took the effort and listed all of them available on the Demo Account as of today:

1. Cash
2.1 Bonds: Inflation Linked Bonds
2.2.1 Bonds: Switzerland 1-3Y Bonds
2.2.2 Bonds: Switzerland 3-7Y Bonds
2.2.3 Bonds: Switzerland 7-15Y Bonds
2.2.4 Bonds: Switzerland Corporate Bonds
2.3 Bonds: US Bonds
2.4 Bonds: UK Bonds
2.5.1 Bonds: Emerging Market Bonds
2.5.2 Bonds: US High Yield Bond
3.1 Real Estate Investment Trusts Global (excluding US)
3.2 Real Estate Investment Trusts USA
4.1.1 Natural Resources, Precious Metals: Gold
4.1.2 Natural Resources, Precious Metals: Silver
4.2 Natural Resources diversified
5.1 Equities Switzerland
5.2 Equities Europe
5.3 Equities UK
5.4.1 Equities USA: All sectors market weighted
5.4.2 Equities USA: Energy
5.4.3 Equities USA: Materials
5.4.4 Equities USA: Industrials
5.4.5 Equities USA: Consumer Staples
5.4.6 Equities USA: Consumer Cyclicals
5.4.7 Equities USA: Health Care
5.4.8 Equities USA: Financials
5.4.9 Equities USA: IT
5.4.10 Equities USA: Telecommunication
5.4.11 Equities USA: Utilities
5.5 Equities Asia-Pacific
5.6 Equities Emerging Markets

I've built a sample portfolio with the following asset distribution

3.2 REIT USA - 10%
4.1.1 Natural Resources, Precious Metals: Gold - 5%
4.1.2 Natural Resources, Precious Metals: Silver - 5%
4.2 Natural Resources diversified - 5%
5.1 Equities - 75% (Switzerland - 40%, UK - 10% USA: All sectors 30%, Emerging Markets - 15%)

Does that sound reasonable, or would you do it differently?
40% Swiss equities is taking a huge bet v the MCSI global index which would represent a balanced portfolio. USA way to low..... Emerging markets generally feature a lot of Banks, which I would avoid at all cost.
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Old 12.01.2017, 16:02
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Re: True Wealth investment portfolios

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40% Swiss equities is taking a huge bet v the MCSI global index which would represent a balanced portfolio. USA way to low..... Emerging markets generally feature a lot of Banks, which I would avoid at all cost.
Lets say I reduce Emering Markets and Switzerland by 5% each and put that towards the US. How about individual US Market sectors. Perhaps a better bet?
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Old 12.01.2017, 16:05
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Re: True Wealth investment portfolios

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Lets say I reduce Emering Markets and Switzerland by 5% each and put that towards the US. How about individual US Market sectors. Perhaps a better bet?
50% in the S&P 500 would give you balanced position, anything else is your choice, however if you looking for a balanced portfolio you won't achieve it.

I assume you realise that about 65% of the SMI is jus 3 shares & that the SMI represents 85% of the entire Swiss stock market. So 35% Swiss equities would be absurd if balance is what your after.
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Old 12.01.2017, 16:07
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Re: True Wealth investment portfolios

Truewealth's idea of swiss equity is the SMI index, which is as terrible as it can get. It's heavily dominated by just three stocks, most companies in it are global businesses, and so really well influenced by global markets.

Mid and small cap stocks capture swiss market minus world better. Swiss small cap had pretty great performance in recent years, unfortunately it's not available in ETF form, only expensive mutual funds. But mid cap you can buy: SMIM and SPI mid cap ETFs.
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Old 13.01.2017, 09:29
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Re: True Wealth investment portfolios

Do you balance according to stock market size or economy size? In the latter the US are 25% vs 50% in the former.

Buying foreign-denominated stocks brings currency risk. When you buy local stocks you also have such a risk in most cases (Swiss companies rely a lot on exports) but currency risk is partially naturally balanced and inherently managed by professionals (the respective CFO et al) at no additional cost.
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Old 13.01.2017, 09:36
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Re: True Wealth investment portfolios

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Do you balance according to stock market size or economy size? In the latter the US are 25% vs 50% in the former.

Buying foreign-denominated stocks brings currency risk. When you buy local stocks you also have such a risk in most cases (Swiss companies rely a lot on exports) but currency risk is partially naturally balanced and inherently managed by professionals (the respective CFO et al) at no additional cost.
Those figures would imply the US stock market trades at a 50% discount to average, which I don't believe.

Managing the currency risk may increase the actual risk as you have no idea what hedging the individual companies do.
When the CHF dropped the peg & strengthened the stock market fell at the same time. Having foreign shares un hedged would have produced zero loss v about 10% loss holding Swiss shares.
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Old 09.12.2019, 14:18
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Re: True Wealth investment portfolios

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Long story short:

Having made all the classic mistakes investing individually, including buying peaks, selling dips, investing in wrong assets at wrong moments, paying excessive management fees for managed funds and more, I'm considering to try True Wealth. I did my math and for small investment amounts their fees look to be worth it, considering the ease of paying in, rebalancing, provided tax declaration document etc.
if you have all these problems, then maybe the best is to pick a single fund which gives no decisions on asset allocation (other than maybe an intial questionnaire) to you and then you just need to pay in your funds monthly and just need to focus on not looking at the price so you are not tempted to buy and sell.
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Old 09.12.2019, 14:27
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Re: True Wealth investment portfolios

What's your investment goal and horizon (do you want a return in, say, 5 or 20 years? and what is your appetite to risk (would you accept losing some of this)?


From your resource selection it looks like you're willing to take a punt and want your fortune closely tied to the profits of Swiss large caps such as Novartis, Nestlé and Roche which between them could make up 50% of your 40%, ie 20% of your portfolio.
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Old 10.12.2019, 20:03
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Re: True Wealth investment portfolios

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if you have all these problems, then maybe the best is to pick a single fund which gives no decisions on asset allocation (other than maybe an intial questionnaire) to you and then you just need to pay in your funds monthly and just need to focus on not looking at the price so you are not tempted to buy and sell.
This was a 2017 post :-). My paper Truewealth portfolio underperformed MSCI World badly. Glad I didn't go with that.
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Old 10.12.2019, 20:36
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Re: True Wealth investment portfolios

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This was a 2017 post :-). My paper Truewealth portfolio underperformed MSCI World badly. Glad I didn't go with that.
I don't know the reason why, but I am not surprised
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Old 10.12.2019, 20:49
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Re: True Wealth investment portfolios

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This was a 2017 post :-). My paper Truewealth portfolio underperformed MSCI World badly. Glad I didn't go with that.
that doesn't surprise me at all. with cheap trackers available, there's little reason to go with a robo adviser.
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Old 16.07.2021, 21:31
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Re: True Wealth investment portfolios

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This was a 2017 post :-). My paper Truewealth portfolio underperformed MSCI World badly. Glad I didn't go with that.
My real portfolio is 11% over MCSI in the last year. Swings and roundabouts. I selected 95% Equities with 80% US. I'll switch to a 'balanced' portfolio next month.
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Old 16.07.2021, 21:48
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Re: True Wealth investment portfolios

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I selected 95% Equities with 80% US. I'll switch to a 'balanced' portfolio next month.
Why? What are your crystal balls telling you?
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Old 16.07.2021, 21:50
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Re: True Wealth investment portfolios

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My real portfolio is 11% over MCSI in the last year. Swings and roundabouts. I selected 95% Equities with 80% US. I'll switch to a 'balanced' portfolio next month.
Why mess with a winning formula? I suspect the revenue is nearer 50% for the US.
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Old 16.07.2021, 21:57
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Re: True Wealth investment portfolios

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Why mess with a winning formula? I suspect the revenue is nearer 50% for the US.
Inflation down the road.
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Old 16.07.2021, 22:23
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Re: True Wealth investment portfolios

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Inflation down the road.
Then equities is where you want your money, especially companies with pricing power. Fundsmith is a good candidate.
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Old 17.07.2021, 09:08
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Re: True Wealth investment portfolios

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Then equities is where you want your money, especially companies with pricing power. Fundsmith is a good candidate.
I already have about 40% Fundsmith in the artillery. For me more balanced is going to be 75% equities and natural resources for the rest. Higher inflation=higher cost of raw materials.
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Old 17.07.2021, 11:18
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Re: True Wealth investment portfolios

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I already have about 40% Fundsmith in the artillery. For me more balanced is going to be 75% equities and natural resources for the rest. Higher inflation=higher cost of raw materials.

For some balance I would recommend considering some allocation to the following 2 all-weather trusts that offer some defence and an inflation hedge:

Ruffer Investment Company - RICA
Capital Gearing - CGT
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Old 19.07.2021, 00:38
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Re: True Wealth investment portfolios

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For some balance I would recommend considering some allocation to the following 2 all-weather trusts that offer some defence and an inflation hedge:

Ruffer Investment Company - RICA
Capital Gearing - CGT
CGT is indeed very very interesting.

7.2% annualised gain in CHF since August 1991 despite the GBP's 50% drop, apparently that's the inception (says the FT). (plus divi, which is .9% currently)

Stunningly small drawdowns, generally negligible compared to stocks: 5% last year, 10% during the GFC, 5% after the dotcom boom. The worst DD was registered in 2013 with some -15%. Unfortunately in £ rather than CHF, those swings will be bigger in CHF due to its safe have function, but that can be hedged if desired. With 30 years history a black swan seems rather unlikely to be lurking in the shadows, to boot.

Thank you.
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