Setting up the stock part of the PP

[happyspec]

I live in Germany and want to set up the prosperity part of the PP, i.e. stocks. I often read that, living in the strongest country of the EU, one could get by by buying a DAX-ETF. I'm not sure if an investment in only 30 stocks would be enough to give me the calmness that should come with the PP. Instead I prefer splitting the money for stocks equally in 4 ETFs: DAX, MDAX (next 50 stocks after the DAX), Euro Stoxx 600 (not 50) and MSCI World. This way one would have access to around 2000 stocks worldwide (except Emerging Markets) with the focus in EU where I live and especially in Germany. But if the stock markets in the U.S. and GB rise faster than those in the EU (as they did the last years) one would not sit only with the laggards but participate in this movement too. What do you think about this approach? Would appreciate any comments (especially of my European fellows which face similar problems)?

[magneto]

UK investor here.  The UK represents about 8% world cap.

Have settled on :-

1/3rd domestic UK
2/3rds global

Have no special insight but it feels comfortable.  Hope that helps.

[Ad Orientem]

I am not sure what your options are but generally speaking I would probably not have more than half in an all German fund. Assuming they are available at low cost I would suggest an all European Union ETF coupled with a global fund.

[koekebakker]

What
you suggest seems reasonable. If I were German I would go with max. 50%
German stocks and the rest in MSCI World. For smaller EU countries I
would just go 100% MSCI World.

[Thomas Hoog]

Just out of sympathie for HB:
25 % own country
25 % Europa
25 % USA
25 % other markets of which:
25% Pacific
25 % Asia
25 % EM
25 Latin America

[Kshartle]

Isn't Germany now the world's second largest exporter?

What percentage of German companies revenue is related to exports? It has to be enormous already. This would be an argument that the German stock market is already Global and wouldn't require a tremendous amount of foreign stock exposure to be diversified.

Or conversly, there is no reason for a German investor to be concerned with the domestic aspect of the stock portion at all. Prosperity abroad is crucial to the success of the German market anyway so you might as well gain the diversity of owning all these other companies (US, UK, Japan, China etc.)

Unless German shares represent a significant discount to the Global market I think you would be better off with Global funds vs. German exclusive funds.

[Kshartle]

Just out of sympathie for HB:
25 % own country
25 % Europa
25 % USA
25 % other markets of which:
25% Pacific
25 % Asia
25 % EM
25 Latin America

Wait that's 200% 

[LC475]

"of which"!

25% Pacific
25 % Asia
25 % EM
25% Latin America
are all a four-way split of the 25% that goes to other.  So each one is 6.25% of the total.

[Kshartle]

"of which"!

25% Pacific
25 % Asia
25 % EM
25% Latin America
are all a four-way split of the 25% that goes to other.  So each one is 6.25% of the total.

oooops, got it!

25% others of 25% total stocks of 25% of the portfolio!

[Bean]

Ticker: VT

I have an unhealthy love of this ETF

[Ad Orientem]

Ticker: VT

I have an unhealthy love of this ETF

I really like it too.

[WhiteDesert]

Ticker: VT

I have an unhealthy love of this ETF

I love this one too. The only reason I use VTI instead of VT in my 4X25 PP is the higher expense ratio for VT.