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Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 12:38 am
by ILoveMoney
What you see below are all the quotes from the ETFs I choose for the PP. As you can see the price for 1 share of gold is 5 times as much as the highest price of the other 3 remaining assets.
If gold gains more then 10% this year (in capital gains) how can I rebalance this portfolio?
Stocks - Price Per Share: €32.50 (28 shares makes 25%)
Bonds - Price Per Share: €176.50 (5 shares makes 25%)
Cash - Price Per Share: €142.40 (6 shares makes 25%)
Gold - Price Per Share: €910.10 (1 share makes 25%)
It looks like a very messy situation to me. Even when I add more money into it over the years. It will be many years down the road before I can rebalance this puppy properly. Am I wrong in thinking this?
An obvious solution would be to find another gold ETF but the only suitable I could find had a share price of over €7000. Also, the same fund (€910 per share) has shares for a little less then 1/3 the price but those are in Swiss Francs. Something I'd rather stay away from.
As a side note, I am living in the countryside in Belgium, located in Europe.
Any (other) solutions to this? Thanks!!
Re: Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 4:32 am
by Thomas Hoog
You have got the ZKB Gold EFT (EUR), i presume. There are no alternatives (as far as I know)
So you have to add some IAU for rebalance purpose and yes there i $, but there is no perfect system
Although you can open een Goldbouillion account, i don't know if there is a mimumun price and it is quite costly but they are also quoted in €.
Re: Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 8:19 am
by dualstow
I have struggled with this a little bit while switching to buying only physical coins, 1oz each, for new gold purchases. Have to buy ten at a time to get a good deal. Yikes. It doesn't leave much money for buying any of the other assets.
Re: Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 10:12 am
by Harry.Browne
ILoveMoney wrote:
What you see below are all the quotes from the ETFs I choose for the PP. As you can see the price for 1 share of gold is 5 times as much as the highest price of the other 3 remaining assets.
If gold gains more then 10% this year (in capital gains) how can I rebalance this portfolio?
Stocks - Price Per Share: €32.50 (28 shares makes 25%)
Bonds - Price Per Share: €176.50 (5 shares makes 25%)
Cash - Price Per Share: €142.40 (6 shares makes 25%)
Gold - Price Per Share: €910.10 (1 share makes 25%)
It looks like a very messy situation to me. Even when I add more money into it over the years. It will be many years down the road before I can rebalance this puppy properly. Am I wrong in thinking this?
An obvious solution would be to find another gold ETF but the only suitable I could find had a share price of over €7000. Also, the same fund (€910 per share) has shares for a little less then 1/3 the price but those are in Swiss Francs. Something I'd rather stay away from.
As a side note, I am living in the countryside in Belgium, located in Europe.
Any (other) solutions to this? Thanks!!
Try DE000EWG0LD1 Euwax Gold or DE000A0S9GB0 xetra Gold
1 share = 1 Gramm of Gold
Delivery in Gold is possible, may be to Belgium with a Fee
Re: Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 12:54 pm
by KevinW
Unfortunately it is difficult to implement an ETF-based PP for a smaller portfolio, due to the high price of some ETF shares and also commission costs. In the US, I don't think the 4x25 is really feasible for balances less than $5,000 USD or so. My advice for smaller portfolios is to just accumulate PP-style cash until hitting that threshold. So you might just hold cash until it's easier to rebalance. Or keep your existing holdings and allow yourself to get overweight in cash until that point.
Re: Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 1:24 pm
by Ad Orientem
For smaller portfolios I generally suggest using PRPFX until you have enough money to comfortably set up a 4x25% PP.
Re: Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 1:54 pm
by Harry.Browne
Ad Orientem wrote:
For smaller portfolios I generally suggest using PRPFX until you have enough money to comfortably set up a 4x25% PP.
For European a no go
This Fund id perfect for us citizen
Re: Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 2:01 pm
by Ad Orientem
Harry.Browne wrote:
Ad Orientem wrote:
For smaller portfolios I generally suggest using PRPFX until you have enough money to comfortably set up a 4x25% PP.
For European a no go
This Fund id perfect for us citizen
That's a bummer. If PRPFX is not an option then I would suggest just sticking to cash or a near equivalent until you have enough money saved to set up a workable PP.
Re: Help!! I am in rebalancing hell.
Posted: Mon Jan 27, 2014 8:21 pm
by ILoveMoney
@ Thomas Hoog, dualstow, KevinW
Thanks for reminding me to be adapt as best as possible and save up enough money to start & grow the portfolio. (And yes, those were the prices for the ZGLD fund.)
@ Harry.Browne
Thanks for both suggestions, I didn't find much information - like fund performance against a benchmark - on Euwax Gold. Xetra Gold looks like a very good fund for where I am at right now. This will make rebalancing a heck of a lot easier
@ Ad Orientem
Thanks as well for you reply. It would've considered it.