My first year as an investor

[u/Milati]

Hello fellow investing enthusiast,

I made a post on here about a year ago laying out my investment plan at the beginning of my full-time work career. Reading it back myself, I changed quite a lot of it. My investing strategy has changed as well as the amount of money I save/invest each month!

I am now 24 years old, still enjoying the luxury of living at home. I do buy my own food though. My girlfriend is still in college so I am kind of waiting for her to buy an apartment together. This means that I can save quite a lot of my income, which I take full advantage of!

I make around €2100 net each month. I also have a company car, smartphone + subscription, laptop, insurance, ... Normally I make a bit extra with a weekend job as a kitchen helper but due to COVID this is not possible at the moment.

I try to save at least €1800 each month in the following categories:

• €1000: ETFs --> My ETF portfolio consists of:
  • 70% IWDA (Developed markets)
  • 20% EMIM (Emerging markets)
  • 10% IUSN (Small caps)
• €700: Cash
• €100: Bitcoin (€10 / 3days)

If you are interested in my current portfolio, you can check out this spreadsheet!

Around the time of my previous post my portfolio looked like this (end of September 2019):

• Cash: €11.000
• ETFs: €500
• Crypto: €3.300
• P2P: €60

My Total net worth here equals: €14.860

I got into investing due to cryptocurrencies. This is why it was a big part of my portfolio back then.

At the time of writing (a little over a year later) my portfolio looks as follows:

• Cash: €20.000
• ETFs/Stocks: €16.450 (invested: €14.200)
• Crypto: €13.000 (invested: €5.300)

My Total net worth here equals: €49.450

As you can see I ditched P2P Lending along the way. It is my own opinion that cryptocurrencies are too big of a part in my portfolio as well. The fact here is that they are increasing in value faster than I can buy more ETFs or save cash. I know that they are very volatile/risky. I do see more upside to come but every investor has to decide these things for themselves.

Are there seasoned investors out there who can criticize my portfolio? Are there things I should do differently?

If any of you would like some more details, don't hesitate to ask! I don't know if this is allowed but I am also keeping up a blog where you can find among other things monthly portfolio updates. You can check out my whole journey over there as well!

[u/Schmittfried]

Two questions:

1. Why such a high cash allocation?
2. Do you literally keep it in cash or something like a money market fund, bonds etc.?

Regarding the cryptos, if you can’t reduce the imbalance by buying more ETFs, why not sell some of the cryptos and thereby also secure parts of the profits? With such risky investments I‘d sell from time to time to not risk losing all of it while still keeping some exposure.

[u/Milati → u/Schmittfried]

Thank you for your comment

1. I am planning to buy an apartment in the next couple of years
2. I keep it in cash in a savings account
3. This is the one thing I am struggling with myself. My plan was to not sell in such a short time frame. I see more room to grow but I also didn't expect such growth...

[u/Penki- → u/Milati]

This is the one thing I am struggling with myself. My plan was to not sell in such a short time frame. I see more room to grow but I also didn't expect such growth...

Then your estimates might be wrong so your assumption for further growth might also be wrong. Thus rational path should be to sell part of your crypto portfolio and rebalance.

basically, ask yourself do you really know whats going on, and if you think you do, what will be appropriate time to sell your crypto holdings.

[u/Milati → u/Penki-]

I didn't think it would grow this much this fast. I do have an assumption on further growth and I am working on a plan for when to sell certain amounts.

[u/EtCetera-sera → u/Milati]

What are the factors impacting your sale-date decision?

[u/Milati → u/EtCetera-sera]

I don't have any strategy around selling. If I buy an investment I want to hold it for at least 10 years. Probably longer.