How do you properly diversify your portfolio for passive investors?
Let's say I would like to do lump sum investments quarterly into 3 different categories: (Local ETF, Global ETF, Bonds)
How do I properly diversify portfolio every time I am investing the sum of money?
Would it be safe to say
Global ETF 40% ( splits into 3 ETF )
Local ETF 40% ( split into 3 ETF)
Bonds 20%
*Considering I know my risk appetite and time frame
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When you are buying global ETF, in fact one ETF is already very diversified and do not need to split to 3 ETF, because when u buy 3 ETF, there are many overlapping, and the biggest concern is on the transaction cost. However I know some people do IWDA + EIMI to cover developed country and emerging country, which is still okay if your investment amount not too small.
Based on your allocation, this is good enough in terms of diversification. Im doing slighly different with global 60%, local 20% and bonds 20%.