Can you help me decide if this is a foolish diversification strategy? (EPI, VEU, IIF)
I picked up "the Intelligent Investor" yesterday and I'm about 20 pages in. It's a tough read for me because I am not familiar with many common financial terms and strategies. I find that I have to stop and cross-reference a lot of the concepts and ideas in order to understand them... none-the-less, I am thoroughly enjoying it so far. And I'm excited to finally get a better understanding of the nebulous beast known as the market.
I've decided that until I finish "the Intelligent Investor", I want to avoid picking (or buying) any more stocks. I've benefited from an exceptional amount of beginners luck in my first year and a half of investing. I know it won't last forever, and I know I'm going to need an ample amount of skill to fill the void left by my luck once it runs out.
But before I stop picking... I need to decide what to do with the 28% cash which is sitting in my portfolio unused. I definitely don't want to use all of it... and I definitely don't want to leave all of it sitting there while I finish this (HUGEMUNGUS) book. (I have a feeling it will take me 3 to 6 months to finish reading Mr. Graham's text).
So here is what I was thinking of doing...
I've been wanting to diversify into emerging foreign markets... but it has come to my attention that I lack the skill to properly do this on my own.
So I was thinking about ETFs. What about putting 9% in EPI and 9% in VEU (I was also considering IIF).
Either way, I'd like to end up with 10% cash left (which to me, seems much more reasonable than 28%).
I've never much liked the idea of ETFs and Mutual funds... but I think in my current position, it may be best to let someone else be "in the drivers seat". That way I can continue to make some money while focusing my attention on learning and polishing my skills.
Being that I am a new fool... I would very much like to know how you feel about this strategy. Thank you very much for reading and have a great weekend.
p.s.- For more on EPI check out Cato's blog and the excellent commentary within.