I'm not going to do the "doomer post", but indeed the market has been heating up quite a bit. I'd like to diversify and possibly miss on some gains, but lower the risk of loss.
Right now my portfolio is relatively heavily tech, although mostly ETFs.
I own:
- 10% GOOG
- 25% QQQ
- 23% SPY500
- 22% World
- 20% cash/bonds
Would you call this tech-heavy?
What would be your estimate of a downturn from this portfolio, were the "AI bubble" to pop?
I'd say possibly a -30% for GOOG, -25% for QQQ, -20% for SPY500, -10% for World? Or do you think it would be much higher?
I think that GOOG is the kind of stock which might get hit by the "AI bubble" popping, but has solid ground, and would recover most relatively quickly (also why I keep some cash at hand to be able to buy some stocks in case there's a downturn)
Another question:
- I'm also an European investor, and fear a bit the devaluation of USD, which would also eat on profits.
- I think for some reason in my broker, GOOG and SPY500 ETF are in USD currency, and QQQ and World are in EUR (perhaps because of the ETF I bought them with). Does that matter relative to USD/EUR valuation? Should I change my SPY500 ETF to a EUR-based one (if that exists?), or do the "EUR-based ETFs" actually simply do a conversion to EUR, and they are equivalent (eg in case of a downturn of USD-to-EUR, they will also go down by the same amount)
Final question: I've never really used/understood bonds? Are there the equivalent of ETFs for bonds? And what typical "benefits" (eg 4%/yr ? 6%/yr?) can I get from those? (so I can park my cash on these)