Buying big before a bubble burst?

General
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Hi guys,

So… I’ve just sold out of my IUSA (Dist.) ETF in favour of a cheaper SPXP or SPXP (Accu.)

I’m about to reinvest all my uninvested funds on Monday… £40k!

I know it’s probably daft, and there’s going to be a lot of overlap, but I want to experiment with getting a couple of similar ETFs like IITU & SMGB, or FWRG, JGRE & LGGG for Global exposure.

I don’t really view it as overlap. If I want to put 10K in the S&P500, it can’t really hurt splitting it into a few similar ETFs from Investco, SPDR and the likes, right? :face_with_peeking_eye:

I also fancy trying IE’s managed portfolio too, and see how they all perform against eachother.

I’m hoping to get about £10k into each sector: SP500, Global, IT, maybe some managed, and ‘other’ like emerging markets, maybe (recommendations?).

The one thing I’m very aware of, is everybody saying the IT/AI bubble is going to burst, meanwhile other people say it has another three years to go.

What would your advice be on dropping 40k in one day, on a potentially bubble-bursting market. DCA would be the smarter way to go, but I’m sick of holding cash, and InvestEngine doesn’t offer interest on uninvested funds, which really sucks. :disappointed:

I’ve been waiting in fear for the market to crash like everybody predicted, only to see it go from strength to strength, while I’ve been holding like an idiot. :innocent::pray:

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how you would invest 40k is your choice and i very much doubt someone on this forum will tell you what to do.

IITU, LGGG, FWRG, JGRE and SMGB are all etf’s that i hold and will do well in the future as will AIAG and RTWP/ISP6.
i also have a managed fund which i am happy with.

10k in 4 different portfolios will spread your risk as will £CA.

https://www.justetf.com/uk/ is a great website to inspect etf’s.

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  • Not sure DCA is the smart choice. Evidence says lump-sum is generally better, though not always. Maybe this is one of the times when it isn’t of course.
    Lump Sum vs DCA
  • There are low-risk alternatives to cash. Eg. CSH2 tracks the SONIA index, 5.2% with minimal spread. Not a bad parking place if drip-feeding.
  • There is EM in Global, though you’d be below weight overall (10% of the market is in EM, but you’d be less). I thought that is the idea with tilting though: diverge from market weights in the desire to beat the market. Same with overlap, as long as you know you are doing it and why (over-weighting sectors you think will out-perform, which necessarily means other sectors are underweighted).
  • A problem with over-weighting AI is that it is already priced for out-performance, so you would need to expect it to out-perform the predicted out-performance (on a risk-adjusted basis) for over-weighting it to make sense.
  • Not sure buying multiple ETFs spreads risk, if they overlap sectors/regions they concentrate the risk (and the reward, if you get lucky - magnifying the losses if unlucky).
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Thanks Mark,
I put a smaller lump in… (£8k), and like magic the semiconductor market tanked! Just my luck :sweat_smile::man_facepalming:t2:

Yeah JustETF is a brilliant tool!

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This is great, you read my mind.
I literally only just discovered CSH2, and deposited about £10k into it. Because I was sick of not getting any interest on my cash.
I also did a small lump sum across a load of ETF’s (overlapping).
Any other day I would have thought it was a smart move, but… because I have nothing but bad luck the Semiconductor industry decided to have a melt down the day after I bought! :sweat_smile: