[Jerome]

Hi

you can put the link which will allow us to realize more precisely what it is about because without seeing what it is difficult to understand. Also specify to us what is the objective of the tool

A++

[Jerome]

Yes it is still a small position for now because I am not yet as comfortable with bitcoin as with other assets. Nevertheless I must say that in just a few days the performance has glued me to the table.

I've done a lot of research to find out the best way to buy some. The dedicated live exchange platforms didn't seem safe enough to invest in large amounts. It seems to me to be useful for exchanging currency, but not for investing.

So I looked at futures. You can do it via Interactive Brokers. There, in terms of security, it's bulletproof. On the other hand, it's just the opposite of the first solution, the amounts at stake are very large, because of the leverage effect.

Since ETFs don't exist yet, I ended up using the only decent exchange-traded instrument I could find, the Stockholm Stock Exchange's XBT ETN. I have to say that I'm quite pleasantly surprised in terms of liquidity and fees.

[Jerome]

Hi Julien

And welcome!

Thank you for your compliments on the site and the e-book.

These are old acquaintances among the stocks you mention, since I followed them as part of one of my portfolios at the time.

Interesting that you talk about cryptos because I was very resistant to them until recently but following their collapse I started to take an interest in them.

I even added a little tracking line as part of my defining portfolio.

I was indeed looking for an asset that was, like gold, decorrelated from other assets, but I could not find any, until I noticed that bitcoin had this very rare characteristic.

Only fools never change their minds...

A++

Jerome

 

[Jerome]

I forgot for FT:

https://help.ft.com/faq/portfolio-queries/what-is-the-portfolio-tool/

You need to open a free account

[Jerome]

Yes I relied heavily on the list of dividend aristocrats, on this long term portfolio I do not want to take excessive risk (yes I know stocks are risky at the base but I wanted to dilute this with big caps). Would you go more on mid-caps? Is that what you propose with your determining portfolio on which we can register to receive updates?

Big caps do not necessarily rhyme with safety. It all depends on their fundamentals and the price where you buy. Look at my recent post on General Electric. At the time it was the biggest of the big. Swissair too. In Europe currently it is okay in terms of price on big caps, on the other hand in CH and the USA it is too expensive overall. Smaller companies have more potential. They can be riskier, but not necessarily. In some cases they are even safer than their big sisters. In the determining portfolio I am very much focused on micro caps. If you read the e-book, you will understand why and how to choose them.

In fact, when I see the yield on government bonds… it’s scary! So I said to myself, let’s split the difference and go for AAA to A and I heard that the risk on this type of bond was very low so… (maybe it’s false, I don’t know anything about bonds)

Bonds are a bit like stocks in a way. They offer a coupon, the equivalent of a dividend, and they can lose or gain value. The coupon is only part of the equation. Just because they pay 1% doesn't mean that's all you earn. The performance of long-term US Treasury bonds since the 1980s even makes several stocks look ridiculous. I don't necessarily recommend them right now because rates are very low and the risk is high in the event of an interest rate increase (which is only a matter of time given the current hysterical injection of liquidity by central banks and governments). So aim for shorter-term Treasury bonds instead. Personally, I find that corporate bonds bring nothing to a portfolio because they are correlated to stocks and perform less well than them. The advantage of government bonds is that they are inversely correlated to stocks. It is even the only instrument that has this characteristic. Very useful in terms of diversification. My e-book will also give you more information on this whole subject.

In fact I don't really see what the point of such a value on my portfolio is... Reduce the volatility effect? Be a security in case of cataclysm and be able to sell some coins for daily expenses? I still can't understand the point of such a position. But if arguments arise I am ready to review this!

Yes, that's it. Again diversification, volatility and security. Gold is the only asset that is not correlated at all (neither positively nor negatively) to all other assets. This is very appreciable when everything goes to shit. At the time I was like you, I did not understand the interest of this investment, but various experiences led me to revise my judgment. Today I could not do without it. See also my e-book.

Have a nice weekend!

[Jerome]

Hello

First of all, congratulations, I see that you have thought out your approach very well, in a global way. I am quite impressed by the amount that you can invest. It must be said that with two people it speeds things up considerably. It's cool that your wife is also up for it.

What I also find interesting is that we can clearly see that the short term – trading portfolio is like a sandbox, with smaller amounts, and that it allows you to do your own experiments.

I also sometimes do this when I test certain strategies, the only difference is that I consider it in my overall portfolio, allocating a small slice to it. But basically it's exactly the same.

Regarding IBKR, I don't think it's possible to split across multiple portfolios, but I've never really tried to do it. Personally, I use the free FT portfolio, which I find very good. It allows you to do what you plan, create several small portfolios and have the overall results for all your invested assets. The advantage is also that you are not dependent on the portfolio of a financial service provider. You can thus bring together on the same platform the securities that you own in different institutions.

Concerning the choice of actions, without going into detail, you are fully oriented towards big-caps. The share of techno is also important. Is there a reason for these choices?

Regarding bonds, why do you limit yourself to corporates? They are correlated to stocks, so not optimal from a diversification point of view.

I don't see any gold either? Is that intentional?

Regarding the composition of your personal LT portfolio, I would say that what matters is the overall allocation of assets. So try to always have a bit of the same approach, even if it means just filling the gaps in one of your portfolios with another.

To help you choose index ETFs (and more generally on allocation), I invite you to consult my e-book. The same goes for choosing stocks. You will also find information on how to start depending on the size of the capital invested. In any case, you should not sprinkle on several stocks but rather start with an ETF at the beginning.

Finally, and this is a remark that I make very often here: it is useless when you are starting out to make monster plans on the comet and to want to master everything in detail from A to Z. Theory is one thing, practice is another. Start small and simple, concentrate on a single approach, see how it goes, what the results are and how you control the risk. When you feel comfortable, then gradually increase the amounts invested. The complexity will come by itself, as you gain experience and knowledge, and depending on the size of the capital. If you want to master everything from the start, you will certainly have to review your plans later.

[Jerome]

This reminds me of a rotten fund I was stuck in for several years. I'll do a post about it soon.

At a glance, the distribution of the portfolio looks pretty good.

 

 

 

[Jerome]

Mintos… I didn't know about it. It seems like a ballsy thing.

There are a few stocks in your portfolio that I know quite well, that I followed at the time and even some that I owned.

It's definitely French-oriented in any case 😉

 

[Jerome]

Welcome to you mappleluna,

always happy to meet other budding rentiers. I see that you have already made considerable progress in your thoughts and certain steps.

Regarding your questions:

– taxation : as I point out in the e-book and on the site, there is no point in getting too hung up on this. You can certainly optimize a little, but it is limited to that, and sooner or later you still have to pay. It is better to focus on investment and see how you can generate the best possible capital gains with the least possible volatility. That is the squaring of the circle. The tax aspects come last. Of course, you can focus on stocks that pay few or no dividends, in order to reduce the impact on IR. But if you have to arbitrate in favor of stocks that have less interesting intrinsic qualities and/or valuation, then you are on the wrong track in any case. In addition, especially in the withdrawal phase, you will have to sell more stocks than if you could count partly on your dividends. This slightly increases the risk of being considered by the tax authorities as a professional trader, so in the end you will also be taxed on capital gains. The tax authorities always get their way...

– short-term portfolio, trading, CFD, life insurance, PEA : these topics are outside my area of expertise and the themes generally covered here, but perhaps other readers will have their say.

Happy confinement!

 

[Jerome]

Hello

You do need tools, but as with any craftsman, they must be adapted to what you want/can do with them and therefore also to your level and the size of your wallet.

As I indicated in the e-book, you can limit yourself to an almost exclusively quantitative approach. That is to say, you are not going to have fun reviewing all the annual figures of the company. You only use a few criteria that have proven themselves, and that I detail in the e-book, and you use them to filter stocks and build a portfolio of a size also specified in the e-book (be careful to reduce by this number the ETFs already used for asset allocation). You can stick to a free screener like FT, then apply the quick basic control method. If you have too many results compared to the desired portfolio size, you must be more restrictive on certain criteria (play with momentum and/or valuation).

I think that to start you can already go with this, it's already very good. At this stage you should not try to do over-quality, because on the contrary you risk making a mistake. When you are familiar with this approach, if you wish and if you need it, you can switch to a paid screener. I don't know finbox. In any case you have to be able to test the tool, that you have confidence in the data and that you feel comfortable using it.

Fundamental analysis itself, with detailed reading of balance sheets and financial results, is not mandatory. Quantitative investment has proven itself and avoids our very often biased perceptions of reality. But if you want, when you are comfortable with the whole previous approach, you can use financial data analysis as the very last filtering criterion, after the quantitative approach. However, it is not proven in the literature that this step brings added value to ordinary mortals (if your name is not Graham, Munger or Buffett), so if you do it it is more out of passion and feeling comfortable with the approach. But there is no point in doing it if you do not already have confirmed practice with stocks. Even Graham at the end of his career had started to take an interest in the pure and hard quantitative approach, that's saying something!!!

[Jerome]

Hello

This question cannot be answered in a short article, nor in a simple update of the book. It is a world in itself. I have deliberately not addressed this point in my e-book, instead pointing the reader to Graham's bible. Security Analysis" .

So either you go for it or you stick to pure quantitative investing. That's enough for most investors. The results with that approach are very good and it's much simpler. If you follow the QVM3 strategy for example, the filters are already very selective and there aren't many results returned.

[Jerome]

for an ETF I would say that below 1.3 it is undervalued and above 2.3 it is overvalued

[Jerome]

what a lynx eye

there is an “I” missing, => VNQI

I correct, thank you

[Jerome]

THANKS

Amazon reviews are welcome too!

[Jerome]

But who is this dear Ploutos?

Thanks for your post. Regarding the typos, figure 21, indeed, well seen… It's just in the part devoted to real estate, but wrong in this summary table. I corrected it, thanks for your lynx eye. Like what even after very many rereadings…

On the other hand, for the other point you mention, IEF is correct, not EEM as you seem to think. You choose the ETF that has the best performance among the three that are mentioned unless the MM-UI indicator is bad (in this case you switch to IEF). I will very slightly modify the wording since it seems to create confusion.

Don't hesitate if you see other things that don't seem clear.

Your private section suggestion: good suggestion, it's done and I gave you access. I'll let you open the first topic there.

I assure you that you are not the only one who comes to the forum. There are many people who read, but few who participate, which is a shame. This is the same observation that we made following the survey.

PS: in your PS you also made a very nice mistake. I think that unconsciously it was wanted. Ciao!

[Author]

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