INVESTING STRATEGY
Additional diversification into Emerging markets and Reits
Hi All, Iv started this year investing into etfs and have been learning about all there is to know about etfs and the stockmarket and have been really keen and interested and still learning (Rask and pearler podcasts and selfwealth videos have been wonderful). After having an IP for over 10 years, sold it and payed down the mortgage, I'm keen to look at other investing options now(working towards FI) and have always been keen to invest in the sharemarket. Currently in late 30s with young family and a mortgage that were also focused on paying off. Currently invested into Vgs and Vas using DCA.However I'm looking for further reducing risk as well as additional diversification into other asset classes both in Aus and overseas by adding additional etfs for the time being. Is anyone looking or been using femx or vge, keen to know your thoughts and also looking into Reits for growth and hopefully some income. I understand everyone has their own investment strategy,risk tolerance and path based on their own situations so was just wondering people's thoughts? Just wanting to keep things simple so looking currently at a 3-4 ETF/managed fund portfolio that I can keep DCA into for the next 10 years and onwards. Much appreciated
2 Comments
9 months ago
Hi Massimo, welcome and great job getting started so far.
A few thoughts…
— In terms of reducing risk, it depends what you meant by that term. Adding other ‘risk’ assets like emerging markets or REITs etc won’t necessarily reduce your risk in the sense that your portfolio could still fall a lot in a crash. But it does add diversification and having more moving parts could mean the portfolio is a bit less volatile (but maybe not by much). If you were more interested in reducing volatility on your overall wealth that may be better done with bonds or cash
— REITs are typically more of an income producing asset and they typically have less growth than shares and the stock market as a whole. So REITs typically add income to a portfolio but not as much long term growth as shares. Can be a fine addition but just thought I should mention that. There are some global REIT index funds which exist, such as DJRE by StateStreet and REIT by VanEck, not sure if you’re aware of these or others.
You’ve already got the biggest parts of the portfolio sorted out, and have stated your desire to keep things simple so that all sounds pretty wise :)
All the best with your next steps, hopefully you get some other input here too.
Cheers, Dave
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