Hello Redit Colleagues
I spent another dozens of hours analyzing, simulating and polishing my Portfolio plans. I thought I wanted to let others participate on my thinking process. Note: I have enough low risk Investments in place that secure my early retirement. However, I want some more higher risk for chance for outperformance.
This is where I am now, which is inspired by what my dad is doing.
Mindset: My objective is to outperform the broad U.S. market over a 40‑year horizon by harvesting size, value, momentum and profitability premia. I’m DCAing monthly, rebalancing quarterly with a 5% drift trigger, investing inside a tax‑advantaged account, and prepared to deploy 100–200k of leverage if the portfolio falls >30% (tranche plan to be discussed). I accept multi‑year underperformance and meaningful tracking error if the long‑run edge is credible.
Note: Once I agree to a new Portfolio Plan, I will have to wait 6M before I can start realizing it.
These are the questions I am still struggling with:
A) Is my diversification good enough for the long term?
B) I skipped an individual quality factor ETF, as Aventis has internal quality screens. Also shown by the results of the factor regression results.
C) It seems there is an overlap between AVUV and XMMO. Hope this is not too bad.
D) I struggle finding good factor ETFs in emerging markets. No attractive Small Cap Value Fund and the momentum funds look scary…AVES was the best I could find.
D) Any other advice or thought?
Thanks for your help!
Ray