14.OWNING THE WORLD

When you don’t know what stock to pick it´s better to have them all. It’s really easy and less time-consuming. Owning the world resembles like this:

Figure 1 – Asset allocation by country

As expected US represents 62% of my portfolio and the rest of the world 48% (7% Japan, 4% UK, 4% China, 2% Australia, 2% Taiwan, 2% India, 2% Switzerland, 2% France, 2% Germany, 1% Brazil to name a few ). Gold and commodities are out of the equation because their origins are from all around the globe and their intrinsic value already work as risk mitigator.

A quick visual analysis make me wonder if shouldn’t I have a Canadian ETF, after all as shown here USA plus Canada have better rate of return than USA alone. I’ll pin this thought for future memory.

The asset allocation by currency is similar, but with common european currency (Euro) surging in third place with a little more than 5%.

ByCurrency

Figure 2 – Asset allocation by currency

Coincidently or not my portfolio allocation doesn’t differ much from today’s world markets capitalization relative size, as shown here (pag. 35).  The higher allocation in US is because I took into account the bond market.

It’s true that I have a big chunk of the portfolio allocated in US, but it only represents what is going on in world markets. So, in future, if I sink with US all world will sink with us. As positive thinker, while we don’t forget subprime crisis, we will be allright.

Owning assets all over world is great. Although I only own a ridiculous small fraction of it I’m sure for now that it’s my best chance to win in the markets having less risk. A true “owning the world for dummies”.