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I think index funds are illegal here for some reason. I have some money in regular funds (they all seem to perform very well, though worse than the index). I also have some in individual stocks, actually with this latest purchase I have over 50% of my money in individual stocks. I'm thinking of putting more into the funds, to save myself from the stress of volatile events. On the other hands, funds charge for exiting early, so if I want to leave in a rush, they're going to shave 2% from my investment (that's besides their managment fees).
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Q: Do you own any real estate?
You can be vague here, if you wish.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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I own no real estate. Real estate praces are also growing like mad here. Now that you've mentioned real estate I feel poor again
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A stepped, gradual program of diversification is in order, to minimize your downside when the bubble pops. You want to reach the point where your initial investment is fully recouped, so you're playing with "house money."
Sounds like all is well for the moment, though. Congrats.
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Sorry.
First of all, congratulations on getting to where you are through hard work, savings, and luck. At a minimum, don't spend the money on hookers and blow.
Secondly, the biggest issue with your portfolio doesn't have much to do with the level of Croatian stock market prices. Rather, it has to do with the fact that your portfolio isn't well diversified, and probably has become much less diversified because of the IPO. Don't get me wrong, Croatia seems like one of the best places to have a poorly diversified portfolio.
It's general practice nowadays for someone of your age to use the 80/20 rule (Saras always mentions it, f.e. Lithuania probably has much in common with Croatia). 80% of your portfolio should be in global stock funds. 20% of your portfolio should be in funds that generally go counter to the direction of the stock market, such as hedge funds.
You can choose to follow the spirit of this advice rather than the letter of this advice. For example, you may invest a little in domestic real estate -- after all, you have to live somewhere. Also, you may want to keep some money available for some opportunistic speculation, as you have done. Or maybe there's a domestic stock or two that are especially good bargains. Also remember that cash funds help you diversify. But in the end, it's particularly important for you to diversify into a bigger pool of assets than is on offer in Croatia.
As a first step in your diversification, perhaps you could take your net winnings from the IPO and move it into a global fund of some sort. I especially like index funds, because they are ultra-diversified, passively managed and have very low management fees.
Good luck!Last edited by DanS; October 8, 2007, 13:05.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Did Croatia have it's own stock market, or was it the KoSCaS?Originally posted by VetLegion
Yep, in newer history. We had a lively stock market until WWII, then the commies came and did away with that.Comment
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I never got any money for free, so yes, I'm careful with itOriginally posted by DanS
Sorry.
First of all, congratulations on getting to where you are through hard work, savings, and luck. At a minimum, don't spend the money on hookers and blow.
Thank you for your advice. When you say "global" what do you mean? US index funds or some sort of funds that track indexes of multiple stock exchanges?
I have never invested outside Croatia, so I'll have to check if I have to pay any taxes to foreign countries if I do.
As for investing into real estate, it's a good idea but I don't have that kind of money yet. As soon as I do I'm going to buy a place of my own, but they're very expensive.Comment
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Zagreb had a stock exchange while it was in the Austria-Hungary, and it continued to operate when it was in the joint country with Serbs and Slovenians. Belgrade also had a stock exchange I think, but Ljubljana didn't. Communists ended the practice in the entire Yugoslavia. Workers became owners of enterprises they worked in, but they couldn't transfer ownership. There is a revival of shareholding happening these days across the region. I heard that the Belgrade stock exchange was the fastest rising in the world last year.Originally posted by Cort Haus
Did Croatia have it's own stock market, or was it the KoSCaS?Comment
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Thanks. Also, any predictions about where the graph I posted might be heading?Originally posted by DanS
Good luck!Comment
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Up, down, then up.Originally posted by VetLegion
Thanks. Also, any predictions about where the graph I posted might be heading?
I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Others probably can steer you in the right direction regarding global funds and the practical aspects of investing in global funds. I am dollar-denominated and buy globally from US markets. I've used Barclays funds purchased from my buyandhold.com brokerage account. Barclays might be a good starting point for thinking about this, even if it isn't practically how you will go.Originally posted by VetLegion
Thank you for your advice. When you say "global" what do you mean? US index funds or some sort of funds that track indexes of multiple stock exchanges?
I have never invested outside Croatia, so I'll have to check if I have to pay any taxes to foreign countries if I do.
As for investing into real estate, it's a good idea but I don't have that kind of money yet. As soon as I do I'm going to buy a place of my own, but they're very expensive.
I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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My general thought is that you're not rich yet. You're rich "on paper" but until you sell those shares and put the money in the bank, it's not for sure. It could come crashing down tomorrow.
I'd say that it's time to diversify like DanS says. Sell high and move your money into some funds that spread out your risk.
Of course, I'm far from being a savvy investor. But it sounds pretty straight-forward to me. You know this cannot last.
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40% return on $7000 is rich for a third world nation. Not sure if Croatia qualifies...
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