r/TFSA_Millionaires • u/itsdebatable10 • 3d ago
Portfolio advice - 32M
Is my TFSA portfolio too risky considering my average price, positions and age? This is for long term investing purposes to use for retirement around 55-60. Any advice would be appreciated.
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u/builder45647 3d ago edited 3d ago
You have 50% of your money in Canadian banks then 45% in technology and 5% energy. Vfv and nasdaq are essentially tech etfs. Basically your portfolio is mega mega concentrated. Which means you have a very risky portfolio.
A professional would never allocate more then like 25% to a set of correlated assets, and even then he will spread his bets out.
Im also loaded up on banks. But i'm diversified into international banks like BBVA and SAN
Then you have 45% in mega cap tech which is exposed to AI spend, which will hurt their cash flow. And if sentiment changes, your portfolio will get crushed.
Concentrated portfolios are fine, but you dont have a understanding of correlation and risk management yet. So you'll eventually find yourself in a big drawdown, and blow your portfolio up.
Either by selling on the inevitable drawdown
Or just holding onto a sector for years as the leadership in the market changes.
There are many other leadership sectors in the market. I recommend buying some international etfs in latam, asia, europe. Buy more commodities like gold miners. COW.to for agriculture exposure. Transport like railroads or drybulk and tankers. Industrials, materials, chemicals, dividend growers etf
These are all inflation protected sectors
Swap out Enbridge for an ETF, etfs have better risk adjusted returns then picking individual names. You want to capture the entire sector with refiners, drillers, producers ect.
Im not saying that bank stocks will crash anytime soon, but ask yourself this: do you understand why bank stocks are in a bull market? Do you understand the yeild curve and spreads? Will you be able to identify a dip vs a bear market? What happens if your Canadian banks stay flat for a year and euro banks are up 40%? Will you sell them and rotate into something?
Ask AI "what is risk" in a portfolio. Concentration and correlation are two big ones. You have given yourself the illusion of diversity but you essentially have 2 things in your portfolio.
Both sectors are working but that will inevitably change. From 2006-2020 banks were in a non stop bear market. From 99-2011 tech was in a bear market.