That's Not an Allocation Strategy!

How's it going blogfam?

I've been working hard, trying to impress the bosses lately. I realize that my work days could be so much more productive so I'm trying out this thing where I give 110% when I'm there and forget it for the rest of my day. It's going well thus far.

You know how I cut back on my trips to London? yeah well that didn't go as planned. And to make things worse, every time I get behind a wheel these days, I automatically cease and desist all eating / drinking /iPod changing / general (accepted and safe but in the grand scheme of things still) not paying-attention-at-the-wheel nonsense seeing as PC Shiny Buttons is still on the loose and I don't know what other zealous law enforcement officers believe in his type of policing.

***for my Non-UK readers** PC Shiny Buttons is a policeman with an interesting interpretation of "not being in control of the vehicle". He is not afraid to hand out spot fines and penalty points for blowing your nose at the wheel even with your handbrake applied. Last year, he gave an unemployed man coming who dropped a £10 note accidentally a spot fine for littering***

In other news, I realized I don't know anywhere near as much as I thought I did about ETFs. I was conducting a very routine check on my investments recently and I noticed my stocks were down in value by around £300 since the beginning of the year. Closer inspection showed one of the ETFs I hold has tanked - terribly. It's from a reputable company, in a "safe" area and I did what I thought was sufficient due diligence before purchasing. So what went wrong?

It would seem my ETF ownership is concentrated in one area.

I'm overexposed and it's my own fault. I made a conscious effort to concentrate on Large Cap initially - just because I thought that was a sensible approach to gaining a foothold and getting my feet wet. What I didn't plan to do was to target Blend stocks. I only hold two ETFs outside this box. That's worrying. I got into this mess because I was researching ETFs and determining which ones I thought were compatible with my long-term objectives. I didn't consider how they would interact together or what the complete picture would look like. You could say I became overconcerned with the minutia.

So, I'm falling back and adopting a "Big Picture" approach. I'm immersing myself in more research and attempting to come up with a balance that's more reflective of my goals. I'm aiming for a distribution that looks something like this:

I don't need to concentrate largely on Value ETFS but I am appreciative of their role in reducing the volatility of a portfolio and I'll look to adjust my target distribution once things change in my life. Until I get some real responsibility i.e. a spouse / family / dependants and/or a mortgage, that's the revised plan.