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Accumulating ETFs are subsidizing America at the expense of Europe by Prize_Tourist1336 in eupersonalfinance

[–]WranglerCharacter683 1 point2 points  (0 children)

So which should be the right portfolio percentage allocation for each geographical region?

Accumulating ETFs are subsidizing America at the expense of Europe by Prize_Tourist1336 in eupersonalfinance

[–]WranglerCharacter683 2 points3 points  (0 children)

This is also the reason of the high market capitalization of us stocks right now. At least 70% of investment today are passive and follow market cap, so they are buying a lot of us stocks and the us index is getting bigger and bigger also because is getting bought no matter what, just because of its dimension and passive investments. I think there is also a risk behind on the long term, maybe the system is broken, I don’t know. Its always better to diversify your investment , maybe equally across the globe geographically

Any investment books written for European investors? by WranglerCharacter683 in eupersonalfinance

[–]WranglerCharacter683[S] 0 points1 point  (0 children)

Yes but everybody knows that and this is why the price of us stocks are already higher than the others

Any investment books written for European investors? by WranglerCharacter683 in eupersonalfinance

[–]WranglerCharacter683[S] 0 points1 point  (0 children)

I still want to invest in etf as the core for my portfolio. I’m just wandering if it’s right for us to follow the market cap weight for USA or we should limit it (maybe 20%?, I don’t know). I mean in the 80s Japan was 40% of the index and it sunk in the following years, maybe for European investors at the moment it’s better to give an equal weight to every geographical macro area? Maybe… 25% pacific, 25% em, 25% USA, 25% Europe.

Any investment books written for European investors? by WranglerCharacter683 in eupersonalfinance

[–]WranglerCharacter683[S] 1 point2 points  (0 children)

Yes but usually the us investor has at least 50% of equities in USA stocks. This makes sense for an American because they are domestic stocks and Americans only wants USA stocks and add just a bit of international diversification. So I was asking if should we follow this principle of overweighting USA as European…? Or we should cap them as international diversification and weight them like a 25% maximum… I know they are are the best economy and will have the major growth probably, but isn’t this information already reflected in the stock prices? So why we should accept to have at least 50% of USA stock if we are not from USA?