Passive Investing, The Evidence… Part 4 – Ultimate Diversification

andrew hallam

andrew hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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3 Responses

  1. David S says:

    Hello Andrew,
    BOND INDEXES – I’m a Swiss based UK citizen and follow the balanced approach to investing with a mix of stock and bond ETFs on a 60-40 split.
    My Swiss bond indexes (CSBGC3.SW and CSBGC7.SW) only seem to fall year on year – not by much, but the dividend paid on them twice per year just covers the fall in the value of the index.
    Swiss interest rates are very low and I have had the Swiss bond indexes for two years and am reviewing if I should swap them for something else – a Global, Euro or UK bond index for example.
    Any thoughts?
    David S.

    • David,

      It sounds like you are tempted to make decisions by looking through the rearview mirror. Yesterday’s returns won’t necessarily be tomorrow’s returns. Instead of choosing indexes based on their very recent performance, consider choosing a bond index based in the currency with which you will be paying future bills. If you will be moving back to the UK, consider a UK bond index. But don’t invest in it (or not) based on its recent performance. When investing, you need to be far more concerned about the next 30 years, instead of the past 2 or 3. And nobody, of course, can predict the future. So make a solid selection for your portfolio, and stick to it.


  2. David S says:

    Yes – good call. Low and stable prices means it is a good time to buy! I need to be more wary of the ‘enemy in the mirror’ and typical investor irrationality. Many thanks.

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