On 14/02/2018 10:58, Mark Haanen wrote:
Wm via gnucash-devel schreef op 13-02-18 om 17:10:
On 13/02/2018 09:12, Alen Siljak wrote:
- we enter the investments we own, i.e. Stocks Fund, Bonds Fund,
Direct Bond, favorite company ABC stock, etc.
- we link the investments (by symbol) to the allocation classes above.
Stocks Fund => stocks
Bonds Fund => bonds
Direct Bond => bonds
ABC => stocks
- we get the latest prices
That's looking self referential to me as your plan allows for a 1.75%
government bond to be called a stock and a stock to be called a bond.
all a bit pointless.
All that computer software needs to do (and, deep into 21st century
this is the least I'd expect my personal finance app to do) is to
calculate the current value of the holdings, therefore asset classes,
and say:
"you have 50K in investments, out of which 30% is in stocks and 70%
in bonds, while your allocation is 10%/90%".
Isn't that just back referencing ?
I own a dog, I check my dog ownership and find I own a dog.
Neither I or the dog should be surprised.
Not really, because the value of the portfolio assets (and therefore the
value of the different asset classes) change over time.
But not as much as you suggest.
Say my target asset allocation is 10%/90% (as above) and that is the
ratio in which I divide the amount I use buying my assets (say $100).
However, I don't own $90 of stocks, but rather 2 stock units priced at
$45. The same for my bond assets (e.g. half a bond currently priced at
$20).
Over time the prices of the underlying assets in my portfolio change.
For instance, during recession and with quantitative easing in place,
bond prices climbed while equity prices dropped.##
Except they haven't. you should *not* expect gnc to do predictive
pricing. that is an absolute NO NO NO
So now my 2 stock units are only worth $60 total, while my bond category
assets climbed to $30.
But that is only in your mind. My stocks and bonds didn't do that!
All that Alen is saying that he wants a report which compares my target
ratio of 10/90 with my current value ratio of 33/67, as this may lead to
a rebalancing of the portfolio.
I am able to say that we do not actually give investment advice. Usual
reasons.
====================
I'm thinking at 10 stocks and 90 bonds (without knowing the currency or
market) it is just a rip off or it is a portfolio for a person that is
about to die.
======================
yeah, I know a senior can whack me for this, but it is in conversation,
so ... 33 / 67 is super conservative I'd check the switching costs.
That is how the sales person gets their money.
=========================
If Mark Haanen / Alen Siljak or anyone else related to them is in a
client / professional relationship I think we should know.
--
Wm
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