Winners rotate after all. US index outperformance through this massive long rally is the primary reason some of us including myself to go for VT/VWRA instead.
While some US investor including the famed Buffett has been repeatedly quoted "Never bet against the US" - a significant amount of Bogleheads do see the US concentration as uncompensated risk and opt for market weight instead. (Reddit's Boglehead community default advice is quite often not to buy pure SP500 or VTI)

Is 60:40 a lot? Considering 60% of VT/VWRA holding is US and only 40% is "all other eligible countries" - most would consider they are significantly US overweight instead. Some investor I know from this board alone adds VXUS to keep their US allocation even lower than market weight.

Of course, given a long enough investing period, any of SP500, VTI, VT and a good amount of bonds will all work just fine, as long they stay the course.

This post has been edited by Hoshiyuu: Mar 29 2022, 12:35 PM

Same underlying product, same expense ratio, one by iShares, one by Vanguard. iShares will have better spread and liquidity, as well as a bigger fund size, but it doesn't matter much if you are a buy once a month and hold person.

VUAA share size is much smaller, so much more easier for us to own, personally, I'll go for VUAA just for the granularity. But if you are saving up and buying quarterly, then it's completely preference.

Of course, both are subjected to SP500 usual pro and cons.

Yeap, CSPX hits a pain point for your average Malaysian, so VUAA is such a massive help when it debuted for those who want to focus on SP500. There's plenty of old discussion for more details on CSPX if you are curious on Alex's other thread, [DIY] S&P 500 Index w/ 0.07% Annual Fee, Buy the best companies in the world .

Not much really. Both Vanguards and iShares are long running, reputable organizations - you are buying the ETF, so you wouldn't need to worry too much about customer support concern of either company, both are Irish domiciled, so you only pay 15% withholding tax and the small details will be handled by the underlying ETF manager, they both share the same fees, and market maker will ensure liquidity even if the volume is low. Spread will be slightly worse, but hardly a concern if you are buy and hold.

Is there anything particular in mind?

Well, I have a few reasons, some of them may be misguided, but I'm happy to be corrected.

I don't like the idea that there is too much choices, and every one of them have different underlying crypto, and every underlying crypto other than the big 2-3 always feel like its a zero-sum game looking for the next bagholder. I don't want my emergency fund to be worth 50% less on the day I need them the most, I'd have 2 big problem on the worst day of my life. I just can't trust the money will be there for me when I need it.

Secondly, I am not familiar enough with them - I don't know which ramps to trust, I don't know which ramps are available and safe, and whether will it suddenly all crash down and every crypto I've received (even if I sent them myself) is considered income according to LHDN and I wake up one day owning massive amount of tax because I didn't do my paperwork perfectly. I am also not sure about the fees, I don't like that if you jump through 2-3 different hoops you can get a sweeter deal (atom arbitrage for example).

Worried is good, being worried save you headache later on when the problem can't be solved by just worrying.

Accept that you will need to pay tuition fees - not in terms of losing money because you gambled on the wrong stock or anything - but simply due to the fact that you need to build confidence and confirm your route. Check your commissions and fees and see if it match what other reports but don't try to save them too hard when testing the waters.

Don't one shot remit 2 months of your salary and be scared shitless when both parties say they don't have your money - don't one shot buy everything at once to save $2 of commission but found out you used market order and it filled at a weird price because it just so happens to be market open or something just happened. Don't put money you can't afford to lose and be dead worried about what others think of you when you are losing money 3 months in and it feels bad.

Start small, put 50, 100 through the route. If they are successful, save them as favourites and all that, and base your transaction on those. Buy the lowest amount of share, be comfortable with the many warning messages IBKR will warn you along the way, slowly figure out the interface.

Once you build confidence, once you confirmed your way works, then you should have less "unknown unknowns" that is at the back of your mind, and you wouldn't have to worry what happened to your money when you go to bed.

This post has been edited by Hoshiyuu: Apr 1 2022, 08:27 PM

Really appreciate the reply! Actually, both my reasoning are almost entirely lasered on UST staking via ANC (Hence the reference to ATOM).

If you can afford the spare time, I would very much welcome that we take it to the DMs, I'd be more than happy to learn about your ramps and method. I've considered it a few time and I do have a play-money allocation to test this sort of item out. When I've read it up, it seems like the 20% APY is not sustainable and no one could explain to me who is forking out the 20% interest rate, and I am very curious how are the fees like for small transactions. Plus, I'm trying to understand how can UST stay pegged to USD should Terra goes to 0 for whatever reason, too.

-

I believe that a Boglehead invest primarily if not only in low-cost, broad based index fund, trading options on a broad based index surely doesn't count, both the commissions/fees involved and the risk are much higher, and relatively more active.

This post has been edited by Hoshiyuu: Apr 1 2022, 10:59 PM

Market timing, sector tilting, region tilting, factor tilting. All that Jack Bogle warned against.

It's okay to do so, but that's not the Bogleheads way.

It has to be low cost, so unit trust are already fully out; It has to be broad-based, so Bursa's out too. The closest acceptable thing would be Roboadvisors, while I can hardly recommend any of them, a few of them do hold primarily VT or SP500 with a healthy amount of bonds or stable assets even at the highest risk portfolios.

Can't really have exposure only in Ringgit, that'd limit the person to Malaysian funds, which have a massive currency risk and political risk. International funds traded via converting MYR to something else immediately before buying could hardly count as MYR exposure, and Ringgit denominated ETF listed on Bursa are all of rather questionable and concentrated with uncompensated risk...

Really can't provide much alternative there, this is simply not a way to invest that's popular in Malaysia...people don't want to get rich slow, in general.

Thanks for the sharing the video!

Also, that's a really bold claim, I personally expects 5-10% overall returns at good scenarios, so if you told me a stock or ETF would return 20% or even more, the first thing I do would be walk away from it out of my personal warnings - would you mind sharing? I'm curious now.

This post has been edited by Hoshiyuu: Apr 2 2022, 11:11 PM

Ah, you were referring to single year swings, I've misunderstood, my bad. I thought you were referring to 5+ year averages.

That would imply there exist many investments opportunities out there who will consistently beat the market average over time, and that investing the Boglehead's way is a compromise, to accept a life of poverty and unsatisfied living.

Both are historically false, but who can say for the future? Until the field of mathematical finance prove otherwise, I feel safer not gambling away my hard earned money.

The goal is to buy the entire haystack, not look for a needle in it that's outperforming.

For classic American Bogleheads, it's simple, the equities part of the portfolio is either VT (~9300 stocks globally, Large,Mid,Small caps by market weight) which auto balances to roughly 60US:40ex-US, or VTI (US total market)+VXUS (ex-US total market) at their preferred ratio.

For us Malaysians, due to withholding tax concerns and that there is no direct VT and VTI+VXUS equivalent, we often buy their Irish-domiciled equivalent ETFs to mimic the portfolio. From there, we decide what kind of coverage we want.

VWRA/VWRD (Recommended):
=Less stock due to missing small caps, but still holds 85% of the invest-able market cap.
+Single ticker portfolio possible
+Overall higher return overtime compared to VT due to 15% withholding tax

VWRD+WSML(Developed countries small caps):
+Covers Global large and mid caps and developed countries small caps
-Lacks emerging market small caps

VWRD+WSML+EIMI(Emerging market all caps):
+Almost fully replicates VT
-Terrible for rebalancing

For me personally, I strongly recommend VWRA and chill - one ticker, 0 rebalance troubles, save transaction cost.
However, I should put out a disclaimer that my actual portfolio is VWRA (80%), AVUV(9%), AVDV(6%), Others (5%) and I do strongly recommend against this portfolio.
AVUV and AVDV are my choices due to Avantis's factor filtered small caps have empirical evidence that it out performs general market-weighted small cap ETFs. They are however US-domiciled, but the re-balancing cost is low and dividends is not much of a concern for small caps stocks.

So that is how I've come to the conclusion to what I hold.

--------

Why I dont hold X:

Stashaway:
Actively managed funds with high fees (0.7% a year for my level), severely underperforms everything, could not commit to their portfolio and high turnover for what is touted as passive investing.
After I've started my DIY portfolio, Stashaway has zero value to me at all angles and I've fully dropped it.

Local bursa:
The notable companies in Bursa is also already included in VWRA.
Furthermore, Bursa has spent the last 20 years trading sideways with 0 improvement, gains come from swings but not overall market growth, political and currency risk threatens it everyday, and a strong, consistent foreign fund outflow meant it's hopeless eventually. Not to mention the trading costs are ironically higher than foreign stocks. Strong pass, I will not waste my time and money here.

VUAA/CSPX/SP500:
Insanely overvalued, too concentrated. Winners rotate and historically speaking, US and ex-US market take turns winning. I'll play on both sides instead of betting US will win forever and maintain my average returns. If I am buying the haystack anyway, why limit myself to only parts of the haystack? And for those who love tech stocks, no AMD, no TSMC, no TencentBaba here.

SWRD:
obsolete in my portfolio due to superior VWRA holdings, and if I buy both, they overlap quite much and will overweight a lot of stocks in my portfolio (VWRA tracks FTSE, SWRD tracks MSCI, it's generally not good to track multiple overlapping indexes).

--------

Finally, fees, fees, fees.
It's very important, so I'll repeat it 3 times.

Every ringgit that doesn't end up in your portfolio is potentially 10 ringgit that has gone into the shitter. This is why everyone should be extremely vary of the percentage based on going cost.
If the market is down bad and returns barely 2% a year, 0.7% (Stashaway) fees will erode your portfolio return to well below 3 month FD rates. And ironically enough, higher cost portfolio almost never give higher returns contrary to popular beliefs.

If you invest RM1000 a month, buying 4 different tickers that cost 2USD per transaction, on top of forex...before you know it, your real invested ringgit amount is only ~RM950 ish. Then when rebalancing is needed, double that cost. You will not be a happy man when you see your IBKR report and commission and cost ate a solid percent out of your yearly returns.

Criticism and discussion welcomed!

This post has been edited by Hoshiyuu: Apr 4 2022, 09:55 AM

Well, just remember, do it because you truly think it's better for you, not because someone on the internet said so. If a decision does not come from yourself, it's easier to be stricken with doubt when things go sideways.

Holding both VUAA & VWRA would be overweighting US and more than half of VWRA holdings by market cap.

While VUAA represents less than ~5% of VWRA holding, market cap wise VUAA represents ~50% of VWRA holdings.



If that is your intention, then all good, if not, be aware that you will have trouble balancing between VUAA & VWRA when only US large/mega caps drop in value.

I'd personally pick one but not both, and if you plan to go with pure VUAA, hold it and hold it well. If it you can manage to hold it for 30 years, then eventually it should all even out.

This post has been edited by Hoshiyuu: Apr 4 2022, 10:01 AM

What I can tell you is, as of today, there is no VXUS equivalent on Irish-domiciled funds. So your choice do quickly become limited when you want to have multiple tickers in your portfolio but avoid overlapping.

The chart is from ETF Research Center https://www.etfrc.com/funds/overlap.php
But US tickers only, you'll have to use similar US funds to simulate your numbers.

It will quickly devolve into a mess when you start having SP500 ETFs, some random SG REITs, a gold ETF from Australia, a handful of VWRA, a pinch of KWEB and TPE... so, be careful, be mindful.

I strongly recommend having an investment policy, limit yourself to only change it every 6 month or ideally 1 year. If it's something you can't hold for 5 years, don't buy it.

Write down what you buy and why, if you can't justify it today, you can't hold it - and when it turns out to be an eye sore a few months down the line - you can refer to it again: "Did the fundamental reason I bought this ticker change? Or am I selling it purely out of spur of emotions?".

This post has been edited by Hoshiyuu: Apr 4 2022, 10:09 AM

Good luck! Always get a second and third opinion.

Looking forward to the 10k from EPF myself too. With everyone withdrawing I have less and less confidence in EPF too anyway, might as well take it out and be productive with it...

Haha, that's why I keep as little MYR on hand as possible and start looking to earn in non-MYR currencies. MYR is just a depressing currency.

That's a long hope. For Roboadvisor, they get kickbacks from the funds they offer, and they'd need the liquidity from US markets for them to move such volume. Won't be happening for a while.

I don't think I'll ever pay robo more than 0.3% annually to manage my fund... so good luck to them. Not to mention most robo is still a mixed bag at the moment.

Still, tracking it via YF is very lacking. For proper tracking to keep cost basis, IRR, MWR, forex impact , etc an excel sheet is inevitable. Plus, rebalancing them will be a nightmare. Sure you could just keep them in check by steady deposits to under-allocated parts, but there is a limit to it as asset amount grows. Not to mention cost will go up really quickly or alternatively, you lose your DCA effectiveness as you are forced to go round robin on them causing long deposit intervals.

Complex portfolio comes with complex fees and troubles, so, not really the Boglehead's way. Keep it simple, look at it once a month. I'd happily pay 0.5% a year if I can DCA automatically into VWRA without ever looking at it.

But hey, at least we have Interactive Brokers. Our close neighbour Singapore is a big fan of buying VWRA through IBKR too over at r/SingaporeFI.

I still can't get over how buying international stocks at what oversea folks consider overpriced is cheaper than buying local stocks commission and fees wise.