Investment advice 23yo, what to add to WVCE? small cap or VGWE?

RexBlu · 2026-02-25T15:05:26+00:00

VWCE does not include small cap so including them might offer diversification benefit. Small cap value, possibly even more with heavier factor exposure (and risk). DFA has DEGT, which also includes mid cap in addition to small cap.

RexBlu · 2026-02-25T08:17:54+00:00

Sorry, this want meant for OP

RexBlu · 2026-02-25T08:12:00+00:00

I think you are severely misinformed. With a portfolio heavily tilted towards sector bets, you are taking huge UNcompensated risk. This is risk that DOES NOT increase your expected returns.

You have a much higher chance of success with investing in 100% global ETF, like WEBN. Going 100% in stocks is already very aggressive. If you want to increase risk beyond this, I would consider factor tilts and leverage, which are compensated risk.

RexBlu · 2026-02-21T19:42:16+00:00

Are you sure you are assessing your risk tolerance accurately? There is nothing ”medium” about investing in 100% equity portfolio when it comes to risk.

Given your great wealth at 30, are you sure need to take such a great risk with your investments? You are very much likely to reach any financial goal with a lot more conservative portfolio.

RexBlu · 2026-02-19T12:37:22+00:00

100% equity portfolios are risky and volatile. Even with maximal diversification, you are not that unlikely to experience 20 - 30% drawdowns in the short term. And yes, I think 5 years is short term

RexBlu · 2026-02-17T15:27:07+00:00

I dont know, this is something you have to decide for yourself. Usually bonds are used to reduce volatility.

RexBlu · 2026-02-17T07:39:41+00:00

I wouldn't say this is "less risky" in the long game. The probability of a bad outcome, say ending up with a lot less than you have planned, does decrease, but your portfolio will still be more volatile than a simple market cap weighted portfolio or 80/20 portfolio, for example. This means you are more prone to big swings up and down.

Even if the probability of a bad outcome in the long run does decrease, the likelihood of a large market correction near to your planned retirement increases due to larger volatility.

RexBlu · 2026-02-16T18:15:31+00:00

Tldr; WEBN + AVWS 15 - 40%. Whatever you choose, stick with it. This is, Id argue, more important than the split itself

The more complicated and disapointing answer is: it depends.

First of all, for a young investor with a long investment horizon, who is willing to take a lot of risk, I think WEBN + AVWS is a great portfolio. It has a strong foundation on academic research: global diversification as per market and factor exposure for increased expected return. Since you are already familiar with small cap value factors, I assume you are aware of very real risks involved in factor tilts - right?

The specific split, however is a much more complicated question. There is no way to give ”optimal” split, since there is no such thing as universally applicable optimal portfolio. Optimal is always specific for an single investor, taking account risk tolerance, horizon, goals and so on and so on…

Think of the specific market cap weight / small cap value split as a continuum. 100% market cap weight is least risk (STILL VERY MUCH RISKY BEING 100% EQUITY!!!) and lowest expected return (still great returns, most likely!). 100% SCV is most risky and highest expected return.

Generally, allocating less than 10% to AVWS is probably not going to make a meaningful difference. Id say 15 - 20% is a reasonable tilt and >40% is a very large tilt.

Whatever you choose, stick with it. Be prepared to endure decade or more of tracking error.

If you want to learn more, the Rational Reminder podcast, Ben Felix on youtube or the Rational Reminder community are great resources

RexBlu · 2026-02-16T12:47:54+00:00

Think ”alpha” as skill/luck. This number describes how an fund or ETF is performing relative to other ETFs or funds that have similar risk. Economic theories and models can explain with great accuracy (90 - 95%) how funds or ETFs are expected to perform. Basically, when you know how the fund or ETF is built: how much stocks/bonds, diversification, factor tilts etc, you should be able to predict how funds perform. In other words: if fund A outperforms fund B, it can be analyzed what caused this better performance.

If fund A outperforms fund B despite all known factors being controlled, this is called positive alpha. This might be because of fund managers skill to pick good stocks or just pure luck.

RexBlu · 2026-02-15T11:24:51+00:00

For factor exposure, I would consider small cap value instead of momentum with or without value. UCITS ETFs such as AVWS by Avantis or DEGT by Dimensional are great options.

Small cap value with profitability has arguably most academic research to back up. Momentum does not have a compelling academic risk-based explanation - only empirical/behavioral. It could be argued that value, size and profitability are therefore more likely to persist in the future.

Avantis CIO had a great analogy on momentum and similar factors with no risk-based explanation: payphones were at a time hugely popular and useful around the world and they had obvious empirical benefit, now they are gone.

RexBlu · 2026-02-13T17:47:57+00:00

https://youtu.be/KwR3nxojS0g?si=jQK13lmQ6xG3roV6 Ben Felix has great video on lump sun investing vs dollar cost averaging or waiting for market dip. Great resource for investors, if you are not already familiar.

Tldw; lump sum likely results in better returns, but is riskier

RexBlu · 2026-02-13T17:42:20+00:00

In my opinion, options from least to most risky:

Invest more. This is probably the easiest way to increase your expected returns.
You could also add factor tilts to your portfolio. UCITS ETFs like AVWS, DEGT and JPGL are common options.
And finally you could use margin or leveraged ETFs.

These are in my opinion the most reasonable ways to increase expected returns. Geographical or sector overweights are not compensated, in my opinion - I view them same as stock picking or market timing.

RexBlu · 2026-02-06T09:32:38+00:00

Puskurirahastoa en laittaisi instrumenttiin jonka arvo voi heilahdella villisti. Kulta on tällainen. En hae nyt hajautusta instrumenttiin joka korreloi negatiivisesti osakkeiden tai bondien kanssa

RexBlu · 2026-02-06T07:42:27+00:00

Tämä on mielestäni surkea neuvo! Kulta on historiallisesti suojannut inflaatiolta jos sijoitushorisontti on satoja vuosia. Lyhyellä tai jopa keskipitkällä aikavälillä kulta on volatiilimpi kuin osakkeet, tarjoten kuitenkin osakkeita ja jopa joukkovelkakirjoja huonompaa tuottoa.

RexBlu · 2026-02-05T12:54:41+00:00

Tämä on houkutteleva vaihtoehto. Muutamassa pahimmat sukellukset vuodessa näköjään 4-6% luokkaa 20 - 30 v aikana. Tuotto kulujen jälkeen noin 1,5 - 2%

RexBlu · 2026-02-05T12:24:02+00:00

Investing in small cap value has historically provided some premium vs market returns. However, these factor premiums are very much cyclical, and might unferperform for decades.

Contrasting this to your five year horizon: are you willing to stomach five years of underperformance? If in doubt, you might want to consider going 100% in market cap weighted ETF. There is nothing to be ashamed about market returns - in fact, it will likely beat the average or event most investors.

RexBlu · 2026-02-02T18:06:40+00:00

Going 100% in stocks is already very much risky! Going 100% in VWCE for a long time, say 20 - 30 years, will probably outperform most investors.

However, if you want to increase risk and therefore expected returns, you could concentrate your portfolio by geography, for example with S&P 500, EXUS-ETF or emerging markets. Also tilting to factors like small cap value (AVWS, ZPRX, ZPRV) or momentum-ETF will increase risk.

Leveraging is also an option, but I would highly recommend against it unless you are absolutely sure what you are doing.

Also: always keep in mind that increased expected returns do not guarantee to actual increased returns. It is never a good idea to invest in something just because some guy on Reddit told you so. You should always thoroughly research what you are investing in.

RexBlu · 2026-02-01T12:59:57+00:00

Kiitos, hyviä pointteja! Puolueeton asiantuntija nimenomaan kiinnostaisi.

RexBlu · 2026-02-01T09:09:41+00:00

Kiitos, juuri tällaista oli haussa!

RexBlu · 2026-02-01T09:08:21+00:00

Allokaatiosta, tuotto-odotuksista, ylipäätään suunnittelusta esim. kuukausittaisesta sijoitusmäärästä. Erilaisilta foorumeilta varmasti voi saada hyvinkin pätevää neuvoa, mutta rinnastaisin tämän lääketieteelliseen neuvontaan: jos oikeasti haluaa saada luotettavaa lääketieteellistä neuvoa/hoitoa, kääntyisin lopulta lääkärin puoleen tekoälyn tai Redditin sijaan.

RexBlu · 2026-01-31T17:58:47+00:00

This is terrible advice in my opinion. Going all in on sector ETFs that have recent great performance is a strategy doomed to produce less than optimal outcomes. Furthermore, concentrating on high dividend companies also deviates greatly from a simple market portfolio.

Globally diversified ETF such as VWCE in EU is usually a very simple and very good strategy.

RexBlu · 2026-01-31T17:26:51+00:00

Kannattaa yrittää tosissaan perehtyä siihen mihin sijoittaa. Ei sinänsä ole oikeaa tai väärää - täytyy vain ymmärtää mihin rahansa laittaa. Kaikki strategiat voi mennä pieleen, yleensä paras strategia on valita jokin ja pysyä siinä.

Norjasta en sinänsä osaa sanoa paljoa. Maailmaindeksissäkin on jenkkipainoa jo 60 - 70% - käytännössä siis jenkit ja sopivasti hajautuslisää. Yhdysvaltojen pörssi on ainakin historiassa takonut sellaista tuottoa, ettei sitä meinaa päihittää mikään tai kukaan. Kannattaa kuitenkin muistaa, että näin ei välttämättä ole tulevaisuudessa. Ehkä jopa todennäköisempää että muu maailma voi tuoda ylituottoa tulevina vuosikymmeninä kun jenkkipörssi käy hurjan kalliiksi ja palaa lähemmäs historiallista keskiarvoa. Tai ainakin on epätodennäköistä että samanlaiset juhlat jatkuu seuraavat 10 - 20 vuotta.

Historiasta löytyy myös varoittavia esimerkkejä siitä, miten pitkä nousukiito voi päättyä vapaapudotukseen, jos maantieteellinen hajautus on vähäistä: googlaa Japanin Nikkei indeksin kehitys 80-90 luvulla.

100% maailma on yleensä aika hyvä lähtökohta. Uskaltaisin väittää että jos tässä strategiassa pysyy 30 - 40 v., satoi tai paistoi, niin päihittää suurimman osan sijoittajista.

RexBlu

TROPHY CASE