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asset allocation for people living in high unemployment areas

Started by The_Farmer, July 14, 2020, 10:56:51 AM

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Hi everybody,

I've been following this blog for ages but I'm actually new to the forum.

I'd like to receive your opinions about my asset allocation strategy, taking into account my goals and my peculiar needs.

I'm 33 years old and a few years ago I left a relatively well paid office job and sold my house in order to start a small farm while pursuing a PhD in Economics.
I have an adjustable rate mortgage with extremely favorable conditions (+0,5% on the European Central Bank interest rate, which is currently zero and most likely won't be raised for a long time) for a residual amount of slightly over $90,000 (still 23 years to go, so my monthly rate is really low).
The value of my house doesn't concern me since I will never sell and I will never move from this place, so I just might consider it as rent + an heritage to receive when I'll be 55 years old.
I'd also not consider future farm income, since I'm still in a start up phase and I'm more focused on ending my PhD now.

What do you think my portfolio should look like?
Currently, I only keep 20% of my networth (I don't include the house in my networth) in stocks and 80% as cash, although I aim to go 50/50. I'm not sure whether I should have even less than 50% cash: this would currently amount to slightly over a year of living expenses, but please consider that I live in a place where unemployment for my generation hovers around 50% so you never feel too safe (my already low PhD salary will terminate in 5 months and then I'll have a 6-month reduced allowance that will barely cover my living expenses).

Specifically, 20% of my stocks are large firms located in my country (considering I won't ever move away, I'm not sure whether I should be MORE or LESS exposed to the national economic situation), whereas the remaining 80% is spread out between a handful of country ETF's (US, China, India, Turkey, Russia, South Korea, South Africa and Canada). Would you change anything? Consider I pay really small commission for buying/selling stocks (0,075% of the purchase price, with a minimum of $3 per movement).

Thanks to everybody that will be kind enough to provide some insight!

The Farmer