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Saturday, 5 March 2016

Buying Emerging Markets and Pacific ex-Japan...


OK, so I have to admit I was hoping for some better bargains than this, but I've forced myself to follow my own "rules" - Emerging Markets and Pacific excluding Japan have just crossed up through their 21 week EMAs and SSTOs.

That means I'm buying them.

All other markets (US; UK; Europe; Japan) look expensive to me, although I'm at pains to point out that I have NO IDEA what the future holds. This is purely a rule-following exercise.

Since I approximately follow the Permanent Portfolio (with personal tweaks of adjusting allocations based on long-run price averages and timing of equities and bonds based on long-term moving averages to avoid bear markets and buy into bull markets at the beginning when they are cheap), my current allocation to equities is 27.6% based on long-run price averages.

I break that allocation to equities down as follows:

UK = 16%
US = 20%
Europe = 16%
Pacific ex Japan = 16%
Japan = 16%
Emerging = 16%

Therefore, only (16% * 27.6%) = 4.4% of my total wealth has been allocated to each of these markets.

Never put all your eggs in one basket...

UPDATE - I realised I ought to have pointed out HOW to buy these markets!

I'm personally buying the following:

Blackrock Pacific ex Japan Equity Tracker Class D Acc

Blackrock Emerging Markets Equity Tracker Class D Acc

Through my TDDirect SIPP and ISA.

As always, Monevator has a fantastic comparison of most (all?) of the online brokers and the cheapest index trackers. Like him, I also prefer funds rather than ETFs, and you can see why here.

2 comments:

  1. Interesting that these two have ticked up, are these GBP denominated funds? In that case the marks on the ruler you're measuring with have just got a little bit closer together, which muddies the picture somewhat. What we need is funds denominated in a basket of currencies, like IMF special drawing rights, to track out that sort of noise.

    I guess it ought to be computable by rescaling the price by XDR/GBP, if you are looking for changes within the underlying asset class?

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