Buying Emerging Markets and Pacific ex-Japan...


UPDATE May 2018 - Since writing this post, I've changed my opinion on using technicals to determine entry and exit points.


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.

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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