Investment Tips For 2018

While the U.S. media focused on the rise of U.S. stocks in 2017, it was actually international stocks that gave U.S. stocks a thumping. U.S. stocks gained about 21.6 percent. International stocks gained 27.4 percent.

But it’s now time to rebalance. Stocks have risen a lot. That means your portfolio allocation will have far more stocks than it did on January 2017. So, here’s my tip for the New Year.

Sell some of your stock market assets.

Add the proceeds to a short-term or broad market government bond market index fund. I know, I know. You probably don’t want to do that. “Bonds are dull,” you say. “Bond interest rates are low.”

Unfortunately, most people buy bonds after they have fallen. They like to buy stocks after they have risen. Investors, on aggregate, are a pretty crazy bunch.

If you don’t want to rebalance (because you’re starting to speculate) then hire a financial advisor to manage a diversified portfolio of index funds. They can do the rebalancing for you.

My book, Millionaire Teacher, shows what kinds of advisors you should use.

If you’re an expat, I’ve listed advisors you could consider in my newly released book, Millionaire Expat.

Have a great New Year!

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 (2nd Ed. Wiley 2017) 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, Privacy Policy and the Comments Policy.

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50 Responses

  1. Mario says:

    Hi Andrew,

    Thanks for all what you do here.

    How about if I don’t sell the winners to rebalance, but just add new money to the losers?

    This is a question I often think about but am not able to find a clear answer to anywhere.

    If I keep my holdings of the winning stocks and don’t sell any, then when the markets drop (and they will), I’ll lose some (and maybe much) of the gains and it’ll take an unknown period of time for the markets to climb back to where they were before the drop.

    I’m able at this time to add fresh money to my bond allocation to rebalance.

    Am I better off selling the winners and “bagging” the money?

    Any advice will be much appreciated.


  2. Mitos says:

    Hi Andrew, for Singaporeans who have CPF, you recommend that we don’t necessarily need a separate bond allocation in our portfolio. But since we don’t have control in rebalancing our CPF, what then should I rebalance?

    • Hi Mitos,

      You could simply rebalance your stock holdings, or you could a small bond element (20% of your total) and rebalance the three indexes, if you want to reduce volatility.


  3. Ruth says:

    Is rebalancing once year enough? My portfolio is definitely lopsided in stocks, but I don’t want to have to be meddling with the allocation too often

    • Hi Ruth,

      This year, you would naturally be buying the bond index with your savings. As for rebalancing a portfolio, there’s no need to do it more than once a year.


  4. Andrea says:

    Hi Andrew,

    Thanks for your posts, very helpful!

    I have a question regarding short-term bonds. I own some IBGS since more than a year and I noticed that all the latest ETF distributions have been 0 EUR (

    Could you help me understand why the distributions are always zero? Is it because of the underlying assets of the ETF didn’t reach maturity yet? Or does it have anything to do with negative bond yields?


    • Hi Adnrea,

      It has a short-term weighted average maturity, so unless it’s an accumulating shares option, you should have received some dividends (interest) which would have been placed in the cash component of your brokerage.


      • Andrea says:

        That’s what I also thought, but for some reason the last 3 semi-annual distributions have all been 0.

        The ETF is a distributing one, not cumulative. If you look at the distributions tab
        in the iShares sheet ( you’ll see that previously there have been normal interests distributions, but now it’s zero since a couple of years.

        I’m really struggling to understand what’s the main reason behind this zero-dividends.

        • Andrea,

          Please contact your brokerage.


        • And remember that, in this case, it would be called “interest payments” not “dividends” in case the brokerage says, “This product doesn’t pay dividends.”

          • Andrea says:

            Perfect, I’ll write to Internaxx and will share here the answer in case I figure out an explanation.

            Thanks a lot for your help, Andrew!
            Good luck with your talk in Dubai.

          • Steve says:

            Did you receive an explanation? I have the same question.

          • Steve says:

            Hello I receive the following message from internaxx:

            There haven’t been any Dividend payments since you are holding this ETF. The official payment date from the last Dividends was March 29th 2016. You might want to take a look into the Pospectus for further information. BlackRock might have decided to re-invest the last Dividends.

            I’m now a little confused what I am gaining from owning these bonds. I haven’t received dividends and also not any additional shares compared to those I purchased.

            Should the price of the bonds be going up as Blackrock are buying back shares? Thanks Andrew or anyone else for advice.

          • Hi Steve,

            I just sent the following email to iShares UK. I’ll keep you posted on any follow-up:

            Dear iShares rep:

            My name is Andrew Hallam. I wrote the international best selling book, Millionaire Teacher (Wiley 2011,2017) and Millionaire Expat (Wiley 2018). I’m a huge fan of your products, and I’ve included plenty of model portfolios, using iShares products, in my latest book.

            One of the products I’ve been recommending is a distributing shares, Euro short-term bond market ETF:

            However, my readers are telling me that it has not made a distribution payment September 30, 2016. The link, above, appears to confirm that.

            Can you shed some light on this?

            Thank you,


  5. Natalia says:

    Hi Andrew – thanks for all that you do on here. I have all of your books but still have a question that keeps nagging at me. I have a permanent portfolio here in the UK (I’m 40) and in the last year I have added money to the ETFs to keep a balance going. I have not sold anything. I’ve left the portfolio alone as you have suggested previously. A year on, my book balance and market value are pretty much on the same level. I’ve had 0.89% growth (obviously that has fluctuated over the year). Am I doing something wrong here? Should I be selling stock? I’m even getting dividends but I feel like there hasn’t been much growth.

    Thanks for your help,

  6. CRC says:

    Hi Andrew,

    I am a Canadian Teacher working in Singapore (but not SAS). I have read your books and have been following your advice for the last 6 years. THANK YOU!

    Now I have a somewhat unrelated question.

    If you have time, I would love to hear your thoughts. I have been overseas over 20 years and have done a decent job of investing and I don’t own any property. If I keep going as I hope and the market grows at a minimum of 5%, I should have over around 1.8 million when I hope to retire in approximately 12 years. I am at a school that pays well and will likely remain here.

    However, I am considering buying a house to rent out at this time to relieve my concern about not having a place to live when I retire. Also, the rental of the house would help to pay some of the purchase price back.

    If you have a moment, I was wondering about your thoughts to the following question.
    If I decide to buy property, would you recommend selling some investments and paying cash (approximately one-fifth of my current investments) for the property or getting a mortgage? I already have a young family member lined up as a potential renter.

    Or, in all honesty, I recognise that you may recommend against buying a property and I would appreciate hearing that too.

    Thanks for any help that you feel comfortable to give.


    • Hi Christine,

      None of us can see the future, so much of this will come down to your personal psychological preferences.
      I recently bought a home with cash. I sold some investments to do so.

      But I don’t like debt of any kind. Mathematically and statistically, it would have been better to take out a mortgage instead. But nobody can see the future. And, as mentioned, I sleep better without debt.


      • CRC says:

        Thanks for your prompt reply. Pretty much was I was thinking that it is simply a matter of how one feels about owing money. Your response has let me know that it isn’t the dumbest thing that I can consider.

  7. Lawrence says:

    Hello Andrew, Why have you dropped the permanent portfolio from the new book? Thanks

    • Hi Lawrence,

      I love the permanent portfolio. But in my latest book, I explain why I needed to select just one portfolio strategy. I would meet investors that “mixed and matched” ETFs from each of those strategies. As a result, many asset classes weren’t being covered because the readers didn’t know enough about global stock and bond market allocation. By presenting 3 strategies in that book’s first edition, I might have done more damage than good.


      • Sharon says:

        Hi Andrew,

        Great speech in Dubai. at the start of the year Bought the book, read it, opening a trading account, contacted Mark Zoril!

        You mentioned above a difficulty with mixing and matching, which I sort of did between your book and Mark’s advice.
        What do you think of this?

        VEVE Developed world markets 45%
        VUKE UK Stocks 7%
        VFEM Emerging Markets 8% (Marks’s suggestion)
        SAGG Bonds 40%

        Wondered about buying the Vanguard Life Strategy fund 2030 or 2035- then I presume all the above (or some mixture similar) will be in that, and I’d only need to buy once per month and not worry about it??


        Sharon (British expat, no idea where to retire! All in GBP, as I guess sooner or later have to return to UK – preferably later, retire somewhere else for a while first! Besides, all savings in cash right now.)

  8. Liong Hai says:

    Hi Andrew,

    Would 20-year+ US treasury bond ETF TLT be a good broad market bond to consider.


    Liong Hai

  9. Ale says:

    Hi Andrew
    I have read your book “Millionaire Teacher” (many thanks as clarifies multiple things and gives a big picture about investment topic) and have some questions in regards to TD e-series Chapter 6, Table 6.4.
    I’m Canadian living in Canada if that might help answering to my question.
    Based on your book the recommendation for TD e series are
    –TD Canadian Bond Index TDB909
    –TD Canadian Index TDB900
    –TD U.S. Index TDB902
    –TD International Index TDB 905

    1.You opt for TD International Index Currency Neutral Fund TDB 905 rather than TD International Index Fund TDB911. The average rate for the last 10 years: 0.9% for TDB905 comparing with 3.1% for TDB911
    2.Where for U.S. Index is vice versa: TD U.S. Index Fund TDB902 rather than TD U.S. Index Currency Neutral Fund TDB904. The average rate for the last 10 years: 6.3% for TDB902 comparing with 5.2% for TDB904

    I would like to know the reason behind you chose one index vs other.


  10. Jen says:

    Hi this current climate many people are losing their jobs…and I learnt today that I am one of from next month no income.monthly. What I’d like Your opinion on is this….I have no need to go into my DIY portfolio 60/40 split stock/bonds…..but cannot put more money in (unless I am blessed to find more work). Should I leave all as is….or should I be moving out some stock and putting it in cash or bonds to make it more secure. (I have emergency cash fund and my partner job is secure). The portfolio is for retirement whether that is in one year or ten yrs …..

    • Ale says:

      As Andrew was mentioning in his latest book
      Millionaire Expat: How To Build Wealth Living Overseas
      Once you have a diversified portfolio (60/40 for your case), make sure you re-balance your portfolio once a year – pick a date an stick with it. You will just have to sell high and buy low

      • Jen says:

        Yes–but what I am saying is–having no job I wont have money to buy–even when low. I have my portfolio nicely built over three years—so now do I just leave the money there (until I need to drawn down on it) even though wont have monthly income to buy more.

        • Ale says:

          Sorry for misunderstanding – I was referring to re-balance your portfolio once a year – even if you don’t have money …for the time being. So based on your allocation (60/40); you will have a look at the end of “your chosen date of the year” and see if the allocation is the same 60/40. If it’s 50/50 that means you will have to sell 10% of your bonds and allocate this portion to stocks so you can have again your desired allocation 60/40 stock/bond

  11. Eunice Gillan says:

    Hi Andrew. I’m 41, British and living in the USA (non-resident). I have the following with Vanguard in the USA:

    Vanguard short term treasury ETF (44%)
    Vanguard Total Intl Stock Index Fund (30%)
    Vanguard Total Stock Market ETF (26%)

    I think this is OK. What do you think?


  12. steve says:

    Hi Andrew

    Within my overall investements, I’ve set-up, through fidelity (i’m already in fidelity at circa 250k GBP), 4 passive funds. It’s along the lines of the Permanent Portfolio but not quite! – Vanguard S&P 500, Vanguard FTSE 100, iShares UK 5 year Gilts & ETFS physical gold (25% each).

    you will note that no cash and the extra stock market fund when comparing to the PP. do you feel this is still a viable permanaent portfolio with the same 25% rebalancing rules applying? or should i reduce the risk and introduce a cash fund instead of one of the stock funds? or perhaps do that later on as i near retirement (currently 55 target 65)?

    I aim to add 200 GBP a month to each and rebalance once a year. and keep that going for as long as i can.


  13. Steve says:

    i’m assuming you did not get a response from Blackrock on the mail you sent 2nd April regarding dividends? Would you recommend switching based on this?


    • Hi Steve,

      I didn’t receive a response from iShares. I can’t see the earlier part of this thread, so could you remind me of the ETF again. We should make sure it hasn’t been converted to an accumulating share unit, while iShares hasn’t updated its profile.


      • Steve says:

        Hi Andrew,

        The ETF was IBGS. Appreciate your advice.


      • Andrea says:

        Hi Andrew,

        I’ll reply for Steve as I’m also facing the same issue. The ETF we were talking about is IBGS and as far as I can see online it was not converted to an accumulative share unit. Any suggestion on a possible alternative or you would suggest to stick to this one?


        • Hi Andrea and Steve

          In my book, Millionaire Expat, page 325, Table 17.1, I provided two European bond market indexes that investors could use. Here’s the link to the first:

          And here’s the link to the second:

          The book also describes the pros and cons of shorter versus medium term bonds. The first option above is short term bond index: lower yields, but greater protection when inflation rises. The second one has higher interest yields, but a it’s bit more vulnerable when inflation and interest rates rise. That said, either would be an excellent option. They are also both accumulating shares units.

          As for IBGS, I have sent iShares another email. At some point, if they really haven’t been paying investors interest, they’ll owe them a nice lump sum of payments that should have been accrued since March 2016. I also suspect that it might have been paying interest, but that the prospectus is erroneous. Either way, I would like to find out.


  14. Jon says:

    Dear Andrew,

    I read both of your excellent books and in this year I start invest some money. I had purchased a global stock ETF and I am about to make an allocation to a bond ETF. In your book you suggest to buy bonds from the area we live or where we are going to retire. I live in Europe. I have found an Europe ETF that is inflation linked. Should I proceed and buy it or the inflation linked characteristic is something I must avoid? If I must avoid the inflation linked ETF and buy a global bond ETF there would be any difference?

    Thank you

  15. Kendra says:

    Hi Andrew…I have never read a book on investing and money that is as clear and easy to grasp such as yours. I just have one question. I know you stress investing early. Besides the Apple stock that my husband bought in 1993 (thank God!!), i want to know your advice on those that did not start investing until their 40’s. After raising kids while living on one income, we’re now 2 incomes and lacking in the retirement dept. What should we do to make up (or at least get to a good place financially) for lost time?

    • Hi Kendra,

      I don’t think you should do anything special to make up for lost time. As my book suggests, build a portfolio of low cost index funds that suits your risk tolerance. Add money every month and rebalance (if needed) once a year.


  16. Lee says:

    Hi Andrew,

    Just a quick question re your thoughts on these. I’m an expat Brit living in Oman and in the process of opening an account with Internaxx. Having purchased and read 2 of your books I’m thinking this is the way forward for me? I don’t intend to go back to the UK for as long as I can/my body gives out and hope to stay an expat for the foreseeable future. I would like to retire once I hit a certain figure and have planned (markets dependent) to hopefully hit this target in 5-7 years.

    Vanguard FTSE 100 VUKE
    Vanguard FTSE All World VWRL
    Vanguard FTSE 250 VMID

    and finally for ETF’s Vanguard S&P 500 VUSA.

    Are there any issues with me buying the latter in terms of tax, inheritance tax etc? As a Brit should I avoid anything US based?

    In addition to this I was going to go with Vanguard UK Gilt VGOV

    I’d be looking at a 70-30 split ETF’s to Bonds

    Thanks for your work in educating everyone in this regard.



    • Hi Lee,

      It all looks fine, except the addition of the S&P 500. That would give you too much US overlap, as U.S. stocks are included in the total world index. Roughly 55% of that global index comprise US stocks.


  17. Lee says:

    Hi Andrew,

    Ok thanks for the advice, much appreciated.



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