Presentation Nicolas P

[nicop88]

Hello Jerome and hello community,

My name is Nicolas, I'm 33 years old and I live in Belgium.

First of all, thank you Jerome for this book so enriching and so important for my life goals. I read it with great interest and I am so excited to start this adventure.

I myself started investing in the stock market at the beginning of covid, telling myself that it was certainly the best time to do so. My portfolio currently contains 2/3 ETFs (world, Europe, China, emerging countries or renewable energies) and 1/3 in stocks.

I have also invested in Cryptos for a year and a half now. My crypto portfolio is larger than the stock market one but I plan to slow down a bit and now feed my stock market account regularly.

I have a few questions before we get started with the Determinant Portfolio Strategy:

– my capital does not reach the 25k recommended in the book but I would still like to continue investing in stocks and small caps. Do you really advise me not to do it or is it feasible? I am the intrepid type and quite fond of risks but that is also why I sometimes have to be held back^^

– I am on DeGiro as a broker and I noticed that many ETFs that you recommend in the book, especially on real estate or treasury bonds, are not listed there. Do you recommend me to use another broker or are other ETFs of this kind available on DeGiro?

I will be signing up as a premium member in the next few days. I hope to learn even more about investing.

Thank you again for this investment education that you offer us.

With pleasure.

Nicholas

[Jerome]

Hi Nicolas,

Welcome! A Belgian friend, it's always nice! Thank you for your message and your compliments.

Here are my answers to your questions:

my capital does not reach the 25k recommended in the book but I would still like to continue investing in stocks and small caps. Do you really advise me not to do it or is it feasible? I am the intrepid type and quite fond of risks but that is also why I sometimes have to be held back^^

Of course it is possible. This is just a tip. When you start with a small PF, it is good to get your bearings first with one or a few basic ETFs. This also avoids transaction fees that are too high compared to the size of the PF. However, since you are with Degiro, the fees remain reasonable, so you can of course get your hands dirty with a few stocks.

– I am on DeGiro as a broker and I noticed that many ETFs that you recommend in the book, especially on real estate or treasury bonds, are not listed there. Do you recommend me to use another broker or are other ETFs of this kind available on DeGiro?

Yes, as Degiro is European, they are subject to a stupid rule that only European ETFs are available there... Two-bit protectionism... Fortunately, we can always find replacement ETFs (see my post here). Sooner or later, you will also have to diversify your brokers anyway.

A+

Jerome

[nicop88]

Thanks for the quick response.

Might as well open another account with another broker now. Which one do you recommend? Interactive Broker?

On the other hand, as much as I understand why diversify your investments, I don't understand why diversify brokers. Unlike cryptos (if they are on exchanges), we are indeed the owners of our shares, aren't we? So if DeGiro were to go bankrupt, I would remain the owner of my assets, right?

[Jerome]

Interactive Brokers is very good indeed. Be careful though because it seems that for residents of the European community the rules have changed because of Brexit (see Paul's comment here ). It's not very clear though: the Interactive Brokers page in Ireland, certainly mentions the modest 20,000 euros of coverage, but ALSO the American SIPC guarantee of 500,000 dollars. I wrote to IB to get more information. Waiting for a response for the moment.

Note that at Degiro, it is mentioned that the securities belong to the client, but they also mention these famous 20,000 euro limit… I find it quite opaque in Europe… In addition, you have to be wary of liquid assets which are only covered up to 100,000 euros.

In short, all this to tell you that for a small portfolio, I understand that you don't ask yourself this kind of question, but think about what it will be like when you have several hundred k. Not only are the guarantees not clear, but above all you can have all the guarantees in the world, when an organization goes bankrupt, it's guaranteed chaos anyway. If you have to live off your capital, you are much more comfortable with your assets distributed through several intermediaries.

It's a matter of peace of mind.

[nicop88]

Yes you are right.

Thanks for the advice.

Happy Sunday

[nicop88]

Hello Jerome,

I am now a premium member. My goal now is to understand the positions well with the help of the clues you share.

I am still a beginner investor, so I have a few questions about the PD (sorry if some questions may seem "stupid"). I will take here the example of the PD of October 1st:

– for the target in % on the right, are we talking about the % of an asset compared to the total of the PF? So if my PF is at 10k and the target of the US stocks is at 12% (stocks and/or ETF), I must total 1200 balls for this asset?

– when you say “lightened in action”: we just follow your sales positions (which may be out of sync)?

– Concerning ETFs, example of CSSX5E at 1/10: so I do nothing here? I do not sell or buy? But which % of my PF should correspond to this asset then? 0%? So it is possible that I do not have any European ETF (or shares) in my PF?

– How to short an ETF on DeGiro?

– On my current PF, I have several stocks (and ETFs) currently in loss, what do you advise me? Keep them and wait until I am positive again or sell anyway?

THANKS

[nicop88]

Also, in order to easily manage my PF, do you have a tool that directly calculates the % of each asset or do you do this manually with Excel for example?

[Jerome]

Hello,

Thank you for registering. For future messages regarding the PF, post directly in the members area of the forum. You have access to it.

Here are my answers:

 for the target in % on the right, we are talking about the % of an asset compared to the total of the PF? So if my PF is at 10k and the target of the US stocks is at 12% (stocks and/or ETF), I must total 1200 balls for this asset?

Exact.

– when you say “lightened in action”: we just follow your sales positions (which may be out of sync)?

Exactly. I wouldn't make a purchase in that case anyway.

Regarding ETFs, example of CSSX5E at 1/10: so I do nothing here? I do not sell or buy? But which % of my PF should correspond to this asset then? 0%? So it is possible that I do not have any European ETF (or shares) in my PF?

Nothing to do, unless you were long on this index, in which case sell. And yes, that will make zero percent target, so no more ETF and for the stock that was still there I posted a change this morning.

– How to short an ETF on DeGiro?

You must have an Active or Trader account. If you have a Basic account, you can upgrade it under your trading settings. If you have a Custody account, this is not possible. You must create a new account.

– On my current PF, I have several stocks (and ETFs) currently in loss, what do you advise me? Keep them and wait until I am positive again or sell anyway?

It’s hard to answer like that… why did you buy them and are those reasons still valid?

Also, in order to easily manage my PF, do you have a tool that directly calculates the % of each asset or do you do this manually with Excel for example?

Excel!

 

• This reply was modified 2 years, 3 months ago by Jerome.

[nicop88]

So you never buy and hold then? I also see that there are no ETFs in the world, no point in buying and holding until withdrawal time according to you?

The stocks/ETFs I currently have I either bought because I believe in the future return (e.g. ETF on renewable energies), or because the price has fallen sharply and I think it will rise again at some point (e.g. Alibaba).

For the rest it's pretty clear, thank you.

[Jerome]

This is tactical asset allocation, so no b&h. I explain why in my book. The only position I held in b&h was real estate until recently. The latter historically offers fairly stable returns, so tactical allocation does not bring a big plus. On the other hand, it allows to reduce volatility. This is the reason why now all my PF is in tactical allocation, including real estate.

World ETF: this would be redundant and would therefore not help diversify the PF. A world ETF is made up of a very large majority of American big caps and the remaining bits and pieces are shared by the big caps of other developed countries. The correlation between the S&P 500 and VT is for example 0.96. In other words, it is the same thing…

The stocks/ETFs I currently have I either bought because I believe to future performance (e.g. ETF on renewable energies), either because the price has fallen sharply and I think that it will go back up at some point (example: Alibaba).

Be careful with beliefs 🙂 It doesn't always go the way you think. Or it can take much longer than expected. That's why I don't buy a falling knife, like Alibaba. More info in my book. It's better to base yourself on facts: what's happening with the data that is known today.

[nicop88]

Absolutely, you're right. As I said, I'm a beginner so my past choices have been based solely on belief. It's worked out pretty well so far because I mainly invested at the beginning of covid and therefore at the right time. But it was luck. I'm now going to think a lot more about my investments thanks to your book, among other things 😉

Thanks for your feedback!

[Jerome]

From 2009 to early 2022, you could invest randomly and win every time, thanks to the easy money policy implemented by central banks. But that's not economic and financial normality. From now on, money is earned again and that's not so bad, even if it causes damage in the process.

[nicop88]

Hello Jerome,

It seems that my subscription has expired but I still have access to the PD data and above all, I cannot renew the subscription (it always sends me to the login link).

[Jerome]

Hi

Please retest

[nicop88]

Ok everything is in order!

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