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Old 27.03.2020, 00:53
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Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

Hi Fellow Europeans,

I'm trying to build the Ray Dalio Allweather fund on Degiro and as you probably know the ETF's recommended in american literature has some other variation in europe.

This is the recommended allocation. What would be a good European version of this that can preferably be made on Degiro? Maybe InteractiveBroker.

Also in regards to the new limitation of Europeans buying american ETFs. Do we have some EU version so we won't experience not being able to buy the ETF anymore as regulations tighten?

- So far 30% S&P500 should be an ok alternative to the 30% VTI.

- I'm located in Switzerland if it helps.



30% Vanguard Total Stock Market ETF (VTI) +7.21% YTD

40% iShares 20+ Year Treasury ETF (TLT) +15.96% YTD

15% iShares 7-10 Year Treasury ETF (IEF) +7.26% YTD

7.50% SPDR Gold Shares ETF (GLD) +25.71% YTD

7.50% PowerShares DB Commodity Index Tracking Fund (DBC) +9.81% YTD

Year-to-date total return through 9/26/16: +12.30%


___
So far this is my suggestion, please let me know if these are bad ETF's:

30% VANGUARD S&P500 $ IE00B3XXRP09
(0.07% p.a.Total expense ratio)

40% iShares USD Treasury Bond 20+yr UCITS ETF (Dist) $ IE00BSKRJZ44
(0.07% p.a.Total expense ratio)

15% BlackRock iShares USD Treasury Bond 7-10yr UCITS ETF (BlackRock Asset Management Ireland Limited) IE00B1FZS798
(0.07% p.a.Total expense ratio)

Can't find any for the last two.

Why are these naming conventions so convoluted and confusing? Makes me crazy trying to figure out what the hell i'm buying here.

Last edited by timpeterson; 27.03.2020 at 01:10. Reason: Additional information
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Old 27.03.2020, 03:39
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Re: Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

So you are living in Switzerland, you are from Europe and you are building a portfolio screwed towards the dollar and the US economy... why?

At a guess, I say press the pause button, toss that book in the bin and spend about 12 months learning about investing and in in particular asset allocation. That way you’ll know what you are doing and that is a big part of being a successful investor.
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Old 27.03.2020, 10:13
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Re: Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

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Hi Fellow Europeans,

I'm trying to build the Ray Dalio Allweather fund on Degiro and as you probably know the ETF's recommended in american literature has some other variation in europe.

This is the recommended allocation. What would be a good European version of this that can preferably be made on Degiro? Maybe InteractiveBroker.

Also in regards to the new limitation of Europeans buying american ETFs. Do we have some EU version so we won't experience not being able to buy the ETF anymore as regulations tighten?

- So far 30% S&P500 should be an ok alternative to the 30% VTI.

- I'm located in Switzerland if it helps.



30% Vanguard Total Stock Market ETF (VTI) +7.21% YTD

40% iShares 20+ Year Treasury ETF (TLT) +15.96% YTD

15% iShares 7-10 Year Treasury ETF (IEF) +7.26% YTD

7.50% SPDR Gold Shares ETF (GLD) +25.71% YTD

7.50% PowerShares DB Commodity Index Tracking Fund (DBC) +9.81% YTD

Year-to-date total return through 9/26/16: +12.30%


___
So far this is my suggestion, please let me know if these are bad ETF's:

30% VANGUARD S&P500 $ IE00B3XXRP09
(0.07% p.a.Total expense ratio)

40% iShares USD Treasury Bond 20+yr UCITS ETF (Dist) $ IE00BSKRJZ44
(0.07% p.a.Total expense ratio)

15% BlackRock iShares USD Treasury Bond 7-10yr UCITS ETF (BlackRock Asset Management Ireland Limited) IE00B1FZS798
(0.07% p.a.Total expense ratio)

Can't find any for the last two.

Why are these naming conventions so convoluted and confusing? Makes me crazy trying to figure out what the hell i'm buying here.
I use Interactive Brokers and I am very happy with the low fees and very good trading software.

Not sure why you want to replicate this portfolio. I will look at the top holdings of the equity ETF and buy the stocks directly when there is a dip. With interactive brokers it is easy to do this. Depending on the size of your portfolio you can buy the commodity futures you need to get exposure in the sector. The rest of money you keep cash and buy at the dips.

If you live in CH then it is better to convert CHF to USD and invest in USD. USD is a world reserve currency. it ain't going anywhere.
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Old 27.03.2020, 10:37
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Re: Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

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So you are living in Switzerland, you are from Europe and you are building a portfolio screwed towards the dollar and the US economy... why?

At a guess, I say press the pause button, toss that book in the bin and spend about 12 months learning about investing and in in particular asset allocation. That way you’ll know what you are doing and that is a big part of being a successful investor.
Yes, because they have the best ETF's with lowest expense ratio. I see there might be currency risk i'm not sure how to handle this though. I have my income in CHF (live in CH). The yearly profit/loss rate is my main interest so whatever currency is safest i would go with. Hedging against a currency is likely going to reduce return significantly. What do you suggest? Thanks!
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Old 27.03.2020, 10:49
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Re: Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

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#1...Not sure why you want to replicate this portfolio...
#2..If you live in CH then it is better to convert CHF to USD and invest in USD. USD is a world reserve currency. it ain't going anywhere...
#1 The allocation has much stronger performance than S&P500 over the longterm due to compounding effect. The S&P's volatility is poison for the compounding effect (-50% is fatal). In this blogpost i have made an Excel that compares the performance of S&P500 and RayDalioAllweather with 10k over 90 years. S&P500 end with 2.8mill and Ray with 4.6mill. + Ray has very little volatility, so you could pull out at any time of the 90years.
Direct link to excel: https://drive.google.com/file/d/1GrI...ZgwUQdBfv/view
Link to blog:https://www.reddit.com/r/eupersonalf...rs_old_in_the/

#2 I agree with the USD currency. EUR or CHF won't be safer or better than USD. Only a small currency risk issue, but you just need to make sure you don't convert you money in a time where the currency conversion is bad. I go longterm so i always plan to have +-5 years to wait for better markets.

Let me know if i'm delusional or if i'm on the right track? I'm no pro investor.
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Old 27.03.2020, 10:50
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Re: Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

Imo CHF is way too strong and it is better to change to USD now. It can go stronger but I doubt the SNB will allow this.
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Old 27.03.2020, 10:59
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Re: Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

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Imo CHF is way too strong and it is better to change to USD now. It can go stronger but I doubt the SNB will allow this.
yup buying USD at 1.08 was perhaps the only timing i got right in the last couple of months
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Old 27.03.2020, 11:57
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Re: Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

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#1 The allocation has much stronger performance than S&P500 over the longterm due to compounding effect. The S&P's volatility is poison for the compounding effect (-50% is fatal). In this blogpost i have made an Excel that compares the performance of S&P500 and RayDalioAllweather with 10k over 90 years. S&P500 end with 2.8mill and Ray with 4.6mill. + Ray has very little volatility, so you could pull out at any time of the 90years.
Direct link to excel: https://drive.google.com/file/d/1GrI...ZgwUQdBfv/view
Link to blog:https://www.reddit.com/r/eupersonalf...rs_old_in_the/

#2 I agree with the USD currency. EUR or CHF won't be safer or better than USD. Only a small currency risk issue, but you just need to make sure you don't convert you money in a time where the currency conversion is bad. I go longterm so i always plan to have +-5 years to wait for better markets.

Let me know if i'm delusional or if i'm on the right track? I'm no pro investor.
Ok I admit I didn't spend much time looking at the details posted (didn't open the links either) but Ray Dalio is just an investor. It is risky to follow what other people do. Especially because in reality no one will ever tell you what he does.

Where you get the compounding effect?

Like I said you can easily create a stock and commodities portfolio using the weights from Ray Dalio's strategy and spent less fees and have more control on your investments.

It is not a bad idea to copy him but I know for a fact no serious investor will ever reveal his positions to others.

If my income was in CHF I would change the money to a mix of USD and EUR keeping CHF only for expenses. USD for investments and EUR for buying property and holidaying in the Eurozone.
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Old 27.03.2020, 12:10
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Re: Buying ETF's in Euro to create Ray Dalios Allweather fund allocation

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Yes, because they have the best ETF's with lowest expense ratio. I see there might be currency risk i'm not sure how to handle this though. I have my income in CHF (live in CH). The yearly profit/loss rate is my main interest so whatever currency is safest i would go with. Hedging against a currency is likely going to reduce return significantly. What do you suggest? Thanks!
I gave you my suggestion... not that I expect for a minute that you would follow it. You are missing the critical point, it is asset allocation that accounts for the major part of the return not the picking of the instruments. That is why I suggested you bone up on asset allocation.
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