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Investment allocation - getting the balance right

Discussion in 'Investing Strategies' started by madozzie, 3rd May, 2020.

  1. madozzie

    madozzie New Member

    25th Apr, 2020
    Hi investors.

    I am looking at my self funded retirement investment spread and I wanted to get ideas from others as how they decide what percentage of their wealth do they allocate to certain investment classes.

    I currently hold 13% cash - is enough to live off if really needed for the meantime.

    I have 15.5% in P2P lending (not feeling good at moment with all the job losses going on)

    Superannuation 2.5%

    Property 39%

    Shares 30%

    (You may say that shares exposure is actually 32.5% as Super is mainly share allocation)

    I am feeling very nervous right now as all my investments other than cash are exposed in a risky environment.
    P2P 'RateSetter' CEO released data assuring that loan defaults remain low, tighter borrowing requirements and a healthy provision fund for loan defaults. So, I am hoping that even worse case scenario, that I would not lose too much there.

    Shares are my greatest fear. 45% in a managed fund and 55% in my own managed portfolio. My holdings are mostly large cap with some mid cap and strong balance sheets. I am a long term hold investor but right now I am not confident and foresee further large corrections and a long term recovery. My fear is that this recovery may take many years.

    Property is my next fear with talks of a property crash that could be as high as 40%. That is severe. And my rental income has already been reduced due to COVID19 to the point it is basically just covering running costs.

    Any suggestions? Thanks.
    twisted strategies likes this.
  2. twisted strategies

    twisted strategies Well-Known Member

    3rd Nov, 2013
    welcome to InvestChat ,

    gee allocation ..

    currently i have some property ( i never guess at the value they have been in the family for over 40 years and no mortgage )

    luckily i put a solar array on each property and they generate a positive return , even when the tenant isn't working

    but i am pretty sure the state government has messed with the incentives to install solar now , so the new deal might be not so attractive , now

    my only current exposure to interest-bearing securities is via two LICs , i have had in the past direct holdings in interest-bearing securities ( up to 25% ) but they have matured or been redeemed and have not found suitable replacements

    so ignoring the property , i am about 95% invested in shares , REITS , LICs and ETFs using the REITs as pseudo-bonds

    feeling concerned is natural ,
    this might be truly historic times , nobody can remember when half the world is in lock-down PLUS both a demand shock AND , a supply shock add, an oil price war , and epic debt liabilities in MOST of the developed world

    if this happened to one major market ( say Japan or EU ) that would be BAD , but nearly every major market AND a trade war ( two if you count oil ) makes this terrible

    i see a similar near-term to you , but remember history will give you SOME clues

    try to stockpile some cash and keep watch for bargains ( property , shares , collectibles they could be anything )

    if we have a second fall of 40% in the coming 12 months , i would expect some more forced selling

    i like interest-bearing securities but NOT at any price , they HAVE TO BE good value , the market is awash with risk , i don't even put cash into term deposits at 2% interest

    arguably a wise person might have hidden a few gold bars under the bed , but that is probably too late now

    i suggest save extra cash if you can , research and WAIT

    you could always plant a vegetable garden and save some cash that way

    cheers and good luck
    madozzie likes this.