Hi MissRibena,
I opened a QL fund back in March with a few grand and have made about 10 % so far. Some days its 12% then it falls back. I'm taking a long term view and am not worried about this as I am keeping a lot of cash back for now and feel more comfortable about drip feeding it on days the markets do relatively badly. This strategy requires patience and I think patience is a good virtue to have when investing.
I think you should have less exposure to Biotech. I have absolutely nothing invested in Biotech at all and dont know if theres any merit in it. From what I see the risk doesnt justify the reward here compared to other funds. This is just my opinion though.
The Celtic fund hasnt done too well recently but I think you have to look at each moment as though it was your first time choosing the funds with the available money and as long as the Irish economy does well then the pattern should continue. Switching the funds may mean losing out on the bounce back. Some people think the Celtic fund is a proxy for the US fund as our economy depends so much on how well the US economy is doing. I find it interesting you have avoided the US Freeway totally.
I get the feeling though that Eurostoxx (with no currency risk) is less risky than Celtic or US but still has the potential to perform as well looking forward. I could be wrong though.
China is risky as it may be heading for a short term downwards correction and the charges on that fund are particularly high compared to buying ETFs.
However if you wish to have 30% invested in a high risk high return strategy long term then I think maybe you should spread the risk and have 20% China and 10% Emerging markets or 10% Japan as Japan may do very well out of the new emerging market in China while not having the same bubble problem as its neighbour.
If you stick to a high risk element of 30% but tone it down a bit then 20% China, 5% Japan and 5% Emerging markets could be a runner.
I think investing in the EUROSTOXX is a pretty good idea as its a well diversified index with many world class companies*and Germany often called the economic powerhouse of Europe and a huge exporter appears to be recovering from the costs of unification.
I would feel comfortable about advising you to get out of Biotech and into Eurostoxx and diversify the risk you have in the orient across China/Emerging Markets and Japan instead. If more conservative elements are holding up and form the core of your fund then you can take onboard some risk without worrying that it will all disappear into nothing overnight.
All this is just my view at the time of writing, bear in mind its not professional advice and you have to make sure you are comfortable with the level of risk you are taking on. Hindsight is 20-20 and we may be looking back in 10 years thinking damn I'm a fool and I wish I had invested 100% in China but looking forward its best to diversify around the potential opportunities as it could so easily go belly up given the nature of stock markets and a comonsense view is you need to match the risk you are taking with the potential reward.
Another thing is if you spread it around more than theres a possibility of reduced volatility and if you need the money you can cash in a fund which is doing well. Its by no means simple because this might mean you are leaving the best performing part of your policy but such is the burden of having to make our own decisions
So my 2 cents is get out of Biotech, keep Eurostoxx and diversify your far eastern holdings while always being aware that the stock market still could be overvalued and hence more risky than the perception on the ground even if the economy and companies are doing well.
Dripfeeding sums of money during low periods while holding back some cash (e.g in Rabobank) ready to invest (at value prices) if things collapse is a good defense against overvaluation. (I'm just not sure how quickly you can move your money out of rabo if the situation arises).
I dont need to remind anyone that I could be wrong as much as I could be right. Even if the whole world had the same view we could all be wrong *or right. Thats the risk we have to live with when we get involved in the stock market.
Good luck
sign.
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