Choosing a portfolio

This piece is meant to be supplementary to Investing for beginners. I highly recommend reading that first (or at least after this) if you have not done so.

There are many investment strategies out there that are outright bad. You should be relatively well-equipped to avoid some of them if you follow the basic tenets of investing I introduced in Investing for beginners. However, there are probably equally many investment strategies out there that are sensible.

If you ask for investment advice online, you will likely to be told “just buy X” or “buy Y, thank me later”. This severely underestimates the behavioral challenges of handling your own investment portfolio. If you follow what others are doing without understanding why, you give up responsibility for your own financial life. At the same time you also give up your biggest advantage against large institutional investors.

Large players have to answer to their investors, and they face huge pressures to change their strategy during periods of underperformance—precisely when they should hold on to their underperforming assets, i.e. “buying low”. Small players do not have to answer to anyone but themselves, allowing them to stick with a well-thought out strategy. Of course, if all you do is follow what others say, you may act just like these large players and sell off your cheap assets to chase the next hot stock/strategy.

This guide aims to (1) show you some example portfolios that are sensible, (2) explain the reasons for adopting each one, (3) contrast the reasons for each portfolio with each other to help you see which aligns better with your needs, risk tolerance, and beliefs.

An important point to note is that all of the portfolios are probably sufficient to meet reasonable financial needs. The more important factor for your success is to stick to one and not constantly jump between them. I find an analogy to health useful here: all sensible health professionals will tell you to cut out processed foods, exercise regularly, and get enough sleep. This is the equivalent of sticking to the basic tenets of investing discussed in Investing for beginners. Some health professionals might tell you a keto diet is more optimal, or sleeping between 10pm to 6am is better, etc. But this really is just optimizing the final 5-10% of health outcomes. What is more important is for you to have a plan you can stick with, in both personal health and finance.

For all portfolios I try to give two versions: one fully DIY, and the other with a robo-advisor (in this case I used Endowus). The simplicity benefits of automatic trading and rebalancing cannot be understated, and robo-advisors take care of this for you. Pursuing the DIY option saves the robo-advisor fees, but comes with a slight learning curve and semi-regular monitoring. Pick whatever works for you best.

Clarifying some terms

For this post,

Stocks will only refer to market cap-weighted index funds in stocks unless otherwise stated
Bonds will refer to bond funds, i.e. a basket of bonds instead of individual bonds
- Long term: 10+ year average maturity
- Intermediate term: 5-10 year average maturity
- Short term: <5 year average maturity
- Total market: government + corporate bonds
Treasuries will refer to government issued bonds (may be US/non-US)
TIPS refers to treasury inflation-protected securities.
- They are a type of treasury that aims to protect against unexpected inflation. The value of the principal (the amount you borrow) increases with inflation.
Developed markets refers to countries with more economic stability and mature capital markets
Emerging markets refers to countries that are not yet classified as developed markets, but might be in the process of doing so
- Note that some indices differ in their definition of Developed and Emerging Markets by a few countries.
Global refers to Developed markets + Emerging markets
Home country refers to your own country—for me this is Singapore
Ticker refers to a unique grouping of letters that identify a fund, e.g. VWRA
TER refers to the total expense ratio of a fund. Essentially how much it costs per year to own the fund
- Weighted TER is the TER of your entire portfolio. Calculate this by:
  (% allocated to asset A x TER of asset A) + (% allocated to asset B x TER of asset B) + …

General things to consider

Risk tolerance

Risk in the context of this post refers to the standard deviation of the asset, i.e. how much it swings up and down. Stocks in this sense tend to be riskier than bonds.

$10,000 investment from 1993-2025. All returns are nominal.

A quick historical back test on portfolio visualizer shows us that while stocks have the highest annualized returns at 10.46% p.a. they also have the highest standard deviation at 15.22%. A 100% stock portfolio should expect at least 50% drawdowns over the life of the portfolio. This is not something every investor can stomach. Imagine seeing your lifesavings half in value, likely during a period where news stories are saying how the world will never be the same again because of some economic or political crisis. While it tends to be true that the world will never be the same again, markets also tend to be really resilient across many crises (including two World Wars, multiple pandemics, and a global financial crisis). However, for an investor living through these crises, it can be difficult to hold on to your portfolio that has been giving negative returns for the past few years.

This post on the bogleheads forum during the 2008 Global Financial Crisis is a great read for getting a perspective of living with a risky portfolio through a crisis.

Portfolio risk can be mitigated by diversifying across assets that are less risky, like bonds.

$10,000 investment from 1993-2025. All returns are nominal.

As you can see, the 60/40 stock/bond portfolios now had significantly lower standard deviation (<10%), while still having very respectable annualized returns at ~8.5%-9% p.a. The biggest drawdowns for these portfolios are now ~27%; still quite high but much better than 50%.

It is often recommended to choose your portfolio based on your risk tolerance, which refers to your (a) ability to take risk, (b) behavioral tolerance for risk, and (c) need to take risk.

(a) is determined by the probability you would have to take out the investment money to spend on necessities. Ensure you have at least 5 year runway for investing in stocks. Always consider if you will need to sell the investment for some financial need, e.g. losing a job, down payment for house.
(b) is determined by how psychologically affected you are by large swings in your portfolio value. Can you sleep at night after losing 50%? What about negative returns for a 5 year period?
(c) is determined by the returns required for your financial goals. Higher returns demand taking higher risk. Set realistic goals, and don’t take more risk than you need to.
There are online questionnaires you can take to try to find out your own risk tolerance. However, I can’t comment on their usefulness.

All other assets (including yourself!)

Examples of some other assets to consider:

Central Provident Fund (CPF)

Consider how much you have saved into the risk-free 4% returns from your CPF Special Account (SA). Estimate the amount that would be paid out by CPF LIFE, the default annuity program, with the calculators on the CPF website.
Having more money secured for your retirement from CPF results in a lower need to take risk.
Consider the amount you have in your CPF Ordinary Account (OA). This may help you cover large expenses like housing and education, increasing your ability to take risk.
Some would recommend seeing your CPF balance as part of your “bond” allocation. I do not recommend this. An important reason to include bonds in your investment portfolio is to reduce volatility so that you don’t panic sell and can sleep better at night. By not having the bond component in your portfolio, you take away the psychological benefits of having bonds.

Real estate

If you own a house, then you essentially have a large asset allocation to real estate. Since people often take loans to buy a house, you are also using a large amount of leverage (borrowed money) in this asset.

Having too much of your assets in real estate increases the amount of idiosyncratic risk you are taking, i.e. risk specific to the particular asset you buy. If the real estate sector does not perform well, maybe due to unfavorable policies, decrease in demand, excess supply, lower population growth, etc., then a large bulk of your portfolio will suffer.
- This idiosyncratic risk is diversifiable, through holding a range of assets across different industries.
Real estate exposure is already possible through stocks (MSCI ACWI has ~2% of its weight in real estate)
Since most people either aim to buy a house to live in or already own one, a good rule of thumb is to try not to increase your real estate exposure even further (unless you know what you are doing).

Human capital

For younger investors most of their assets lie in their future earnings. This means their job, i.e. where they get their income from, is where almost all their assets are held. There are a few consequences of this:

Whether you have a stable job is the largest factor for determining your ability to take risk.
You are already exposed to a large amount of idiosyncratic risk associated with your company. The company might change leaders, retrench staff, make bad business decisions.
Buying your own company’s stock further increases this idiosyncratic risk—if the company goes down, both your income and investments go down.
You might also wish to avoid buying investments in the industry you work in for similar reasons. E.g. if you work in tech, try to lower your tech allocation.
- In theory it makes sense to take short positions on your company (i.e. betting that its price will fall), but in reality this is too complex and difficult for lay investors to execute well. Not recommended.

Taxes

Try to always aim for tax efficiency since it is guaranteed returns. For Singapore tax residents this means buying Ireland-domiciled funds, and if you wish to, Singapore stocks. There may be some funds you wish to purchase that aren’t Ireland-domiciled. If possible, consider advisors that have access to these funds. If you already have an advisor, ask them about whether it is possible to get access. If you do not have an advisor, and you really want to buy that fund, do so only if you think it will help you stick with your portfolio.

Also consider the likelihood you will be a tax resident in another country. Many countries in the world charge capital gains tax, which Singapore does not.

Home country bias and Emerging market

Both of these topics deserve some discussion separately. I personally don’t think either are super important, having them and not having them can both make sense.

Alternatives/Diversifiers/Commodities

I don’t go into these other assets here. I think they could have a place in a portfolio, but I am not too well informed on them yet. Some that I think could have potential are: gold, commodity futures, managed futures, protective puts, maybe alternative risk premia and crypto (as of now private investments seem too suspicious for me). Again, not recommending them. I don’t think about them as assets that increase your returns. Instead, I think they have potential to decrease volatility without decreasing returns by too much. I may try to learn more and do a write-up in the future, but certainly not necessary to have a great portfolio.

DO YOUR OWN DUE DILIGENCE

Before investing in ANY fund, please at least read up their documents like the factsheet, KIID, and prospectus. Make sure you understand what you are buying and their methodology. If you are buying an index fund, make sure that the index itself makes sense. Since creating an index is just like circling a basket of stocks, funds can create whatever index they want and build an ETF or mutual fund around it. At least know:

What you are paying for, i.e. TER / other costs
Where they are domiciled (US, Ireland, Luxembourg, etc.?)
Whether it is an ETF or a mutual fund
How you will be compensated if something happens to the fund company
Whether dividends will be accumulated (reinvested) or distributed
What currency is the fund trading in
The general composition of the stocks they buy
- US/Global/Developed/Emerging?
- Proportion of different industries? tech/financials/healthcare/…
- Which specific countries are included/excluded
- Fund size (how much money they manage)
- How many stocks do they buy?
If they are an index fund
- How long has the index been around?
- What does the index track?
- Do other funds track the same index? If so, are their TER different?
- How do they replicate the index? Physical (buy the underlying stock) or Synthetic (trade equivalents)
- How much of the market capitalization does it cover?
- How well do they track the index? (how much tracking error)
If they are an actively managed fund
- How do they select stocks for the fund? Is it transparent?
- Do they follow a systematic and replicable strategy?
- What is the rationale behind their strategy? Do you buy into their investment beliefs?
- What is their benefit over tracking an index?

Portfolio 1: Standard Bogleheads

Bogleheads are a community online that generally follows the investment philosophy of Vanguard’s founder, John C. Bogle. They often advocate for buying the market, with some split between stocks/bonds/home country stocks.

Global stocks (or just US stocks, hello S&P 500 lovers)
Bonds
Home country stocks
(Optional) exclude emerging market stocks

The relative weight of each component in your portfolio is mostly personal preference. The only limitations I would impose are: 1. (for non-US investor) don’t go 100% home country stocks, 2. don’t go >50% emerging markets, 3. try to include at least some stocks (at least ~30%?). Here is one sample portfolio:

40% Global stocks
40% Bonds
20% Home country stocks

This gives a 60/40 allocation of stocks/bonds, which is a very standard start point. For a Singaporean investor, typically we want to buy Ireland-domiciled funds, so this might be:

ETF version

Type	Fund	Ticker	TER
Global stocks	SPDR MSCI ACWI IMI	IMID	0.17%
Home stocks	Amova Singapore STI	GAB	0.25%
Long term treasuries	iShares USD Treasury bond 20+ year	DTLA	0.07%

Weighted TER: 0.136%

Endowus version (No EM)

Type	Fund	TER
Global stocks	iShares Developed World Index Fund	0.12%
Home stocks	Amundi Singapore Straits Times Fund	0.15%
Intermediate term bonds	iShares Global Aggregate 1-5 Year Bond Index Fund	0.17%

Weighted TER: 0.146%
With platform fee: 0.746%/0.646%/0.496%/0.396%

Reasons for

Simple. Managing only a few funds.
Flexible. There is still room for adjustments based on your beliefs about the market. E.g. If you think emerging markets are better investments, increase its %. If you think home country bias is not important, decrease its %.
Tried and tested. There is a lot of data supporting this strategy. US stock data at market cap-weight goes back to 1928 (S&P 500). Historically, an investor that just invested (bought and hold) for that duration would have earned ~10% p.a for S&P 500. International stock data (MSCI World) goes back to the 1980s with a ~8.7% p.a. return.
- Investors should not expect the same returns going forward. But they can reasonably expect positive returns above bonds on average.
Community support. Many people invest in this way, you can join communities (like Bogleheads) that rally together during ups and downs. This has important effects on your ability to stick with the portfolio.
Lowest cost. Probably the lowest cost strategy in the list. No pressure to outperform other portfolios to make up for the extra cost.

Reasons against

Likely not optimal. The optimal portfolio is often taken to be the portfolio with the highest risk-adjusted returns, i.e. the greatest ratio of expected returns per unit of risk you are taking. Note that you don’t need an optimal portfolio to achieve any reasonable financial goal (or optimal for you could just mean something different).
Not the highest expected return. You could take more risk to get higher returns. Note that you don’t want to take idiosyncratic risk because they don’t lead to higher expected returns. You can, however, take on more risk from known risk factors—factors that have consistently shown to have higher returns if you are willing to take the higher risk.
- An example of a known risk factor is value, defined as lower price relative to some fundamental value, i.e. cheaper stocks.
Expensive. By almost all measures of value, the top 1500 stocks are expensive: https://funds.alphaarchitect.com/visualfactors/ (click Universe, it shows the median valuation of US/Developed country stocks)
Not diversified across risk factors. For the stock component, you are only banking on the market paying off. If the market does not pay off, you can be screwed for quite a long time (see Japan 1990-2020).
There’s always going to be some smart-sounding guy saying it is bad since it is the biggest target to beat.

Basically any reason against it is some finance bro talk. You can probably do a little better, but only if you are willing to put the time and effort to learn more.

Portfolio 2: (Light) factor investing

Disclaimer: I don’t feel fully confident in recommending factor investing. (1) I don’t understand it as well as I understand “buying the market” (I don’t study finance), (2) there is disagreement about whether factor premiums exist after fees, and (3) chasing higher returns often comes with more risk. I will instead try to go through what I have learned about it, as a start point for you to explore more and do your own due diligence. Warning: this gets into quite nerdy stuff (if it wasn’t nerdy enough already).

Nerdy talk about factors

A little bit of background is that most economists believe in the Efficient Market Hypothesis. Basically, in an efficient market, all available information is already reflected in prices. So the only way to achieve a higher return is to take more risk.

“Factors” came about because economists were aiming to explain returns of the market as a whole in terms of systematic exposure to some risk. The first of these models was the Capital Asset Pricing Model (CAPM). In the CAPM, there was only one risk factor—market risk.

In essence, the thought was that the only way to motivate a rational investor from moving away from a risk-free asset, is for the asset to have a higher expected return which would be explained by taking on this market risk—literally just the risk of participating in the market. Colloquially, the risk-free asset has been thought of as really secure government bonds, while the “market” has been thought of as the “stock market” as a whole.

The nice thing about having a model, is that you can empirically test it. So if the CAPM is true, we would expect to see the differences in returns of diversified portfolios explained by their exposure to market risk. However, the CAPM has basically failed to fully explain differences in returns (it still explains ~2/3 of returns).

There are two conclusions we can draw from this empirical failure. Either, markets aren’t efficient, or the CAPM is the wrong model. Because markets have seemed quite efficient for a long period of time (if it wasn’t, active managers could consistently outperform the market), Professors Eugene Fama and Ken French then proposed a different model: the Fama-French three-factor (and subsequently five-factor) model. The three factor model explained 90% of differences in returns between diversified portfolios, while the five-factor model explained 95%.

The upshot of this is that (a) all of the returns of “buying and holding the market” could be explained by a systematic risk factor (market risk), and (b) an investor can take on exposure to other risk factors to obtain higher returns, and (c) an investor can potentially diversify across risk factors (if they are not perfectly correlated).

The initial three factors are:

Market risk (risk of buying the market)
Size (small caps outperform large caps)
Value (high book value of assets-to-price outperforms low book-to-price)

The five factors add on two more:

Profitability (high profitability outperforms low profitability)
Investment (low investment in book value of assets outperform high investment)

The historical returns of the risk premium are:

Source

MKT-RF is market risk, SMB is small minus big, HML is high minus low book-to-price, RMW is robust minus weak profitability, CMA is conservative minus aggressive investment. Note that one should often expect these premiums to be lower than they have been historically (maybe 50%), since those who invested in them in the past did not know they were “factors” and was hence likely taking on more risk.

Typically when people say they do “factor investing”, they mean that their portfolio tilts towards stocks that have exposure to risk factors other than market risk (there are other “factors” but my understanding is that many overlap with these few, or are just these factors in a different name or grouping). For instance, it is common to find people who invest in value stocks, which are primarily characterized by their cheapness, i.e. low price to some fundamental value—Fama and French used book value of assets (another common measure of fundamental value is price/earnings).

It is also quite common for investors to utilize a combination of these factors, for instance a tilt towards small-cap and value stocks. So the portfolio would likely include:

Global stocks
Small cap value stocks
Large and mid cap value stocks
Home country stocks
Bonds

As you can see, not much change from the standard bogleheads portfolio. Why would it, if the standard portfolio is already so good? Note that what the large and mid cap value stocks do is just to increase tilt towards stocks with value characteristics since the global stocks often already hold those stocks. Here is a sample portfolio:

30% Global stocks
20% Small cap value stocks
10% Home country stocks
40% Bonds

This maintains our 60/40 allocation to stocks/bonds, while introducing some (but not too much) of another risk factor. I did not include large and mid cap value stocks here, because I still wanted to maintain relatively small tracking error relative to a standard bogleheads portfolio. Like before, we want to utilize Ireland-domiciled funds but there aren’t many good options (I know of) here, so you should do your own research

ETF version

Type	Fund	Ticker	TER
Global stocks	SPDR MSCI ACWI IMI	IMID	0.17%
Small cap value	SPDR MSCI USA SCV	USSC	0.30%
Home stocks	Amova STI ETF	GAB	0.25%
Long term treasuries	iShares USD Treasury bond 20+ year	DTLA	0.07%

Weighted TER: 0.159%

Note that the small cap value fund only consists of US stocks. If you prefer to tilt towards value stocks globally, it might make sense to remove USSC and replace it with a large and mid cap index like IWVL (or do both IWVL + USSC). Personally, I think the best option for small cap value now is Avantis’ Global Small Cap Value fund, AVGS (which I personally invest in). Note that the fund is still quite new (launched sep-2024), which might be a consideration for some. Their US-listed small cap value funds have a longer history (2019), so they are not entirely new to this. They also do not track an index, and decide on what stocks to buy based on their own (systematic) criterion.

Endowus version (No EM)

Type	Fund	TER	Weight
DM multi-factor	Dimensional Global Core Equity Fund	0.26%	40%
Home stocks	Amundi Singapore Straits Times Fund	0.15%	20%
Intermediate bonds	Dimensional Global Core Fixed Income Fund	0.27%	40%

Weighted TER: 0.242%
With platform fee: 0.842%/0.742%/0.592%/0.492%

Reasons for

Higher expected returns. If you are convinced by the research behind factors, you should expect slightly higher returns (~0.3-1%). Note that the returns might not survive after excess costs.
Risk factor diversification. Probably the best reason to invest in factors. The other risk factors are not perfectly correlated with market risk, so when the market is not doing well other risk factors might do well.
Feel different from others. Some might wish to have a portfolio that is different (or better) than others. Holding the market is too boring?
Doesn’t differ too much from market. Still has significant exposure to market risk, so not too much tracking error from the market.
Tends to be cheaper. Obviously, since you are buying value (cheap) stocks.

Reasons against

Requires more due diligence. Factor investing is hard to understand, and you shouldn’t buy what you don’t understand. It makes it harder to stick with, and believe in when times are bad.
May increase volatility. Make no mistake, these are risk factors. You are taking more risk to get more returns.
Risk premium may not even exist after fees.
Perform slightly different from market. Which means there will be periods of underperformance if you compare it to a total market index.
Higher annual costs (TER).

Portfolio 3: (Heavy) factor investing

If the previous portfolio hasn’t scared you away and you want more, then you are already more hardcore than I am about chasing factors. I think of heavy factor investing (my made up term) as doubling down completely on the reasons behind factor investing. I would call anything above 50% of your funds in factors other than just market risk heavy factor investing.

It’s quite natural to think that: if factor investing has higher expected returns, why don’t I just put all my money there instead of a total market index fund? Well, that’s because if you are wrong about factors then there goes your grand plan. Do still keep in mind the basic tenets of investing: buying the market, diversifying, lowering costs, and sticking with your portfolio.

There are two other factors (which I am still not very familiar with) I see others tend to include in their portfolios: momentum, and low volatility.

Momentum refers to the tendency of stocks that have done well in recent history (maybe last 12 months) to continue doing well. Low volatility refers to stocks with just that, lower volatility. From my understanding, low volatility stocks correlate with profitability and investment. So, a heavy factor portfolio might only contain:

Multi-factor stocks
Small cap value stocks
Momentum stocks
Low volatility stocks
(Possibly) emerging markets

From what I understand, there aren’t many great funds that are Ireland-domiciled for capturing momentum and low volatility. Let’s say that you weight each component equally (20% each), this might look like:

ETF version (no comparable Endowus ver)

Type	Fund	Ticker	TER
Multi-factor	JPMorgan Diversified Factor Dev	JPGL	0.19%
Small cap value	Avantis Global Small Cap Value	AVGS	0.39%
Momentum	iShares MSCI World Momentum	IWMO	0.25%
Low volatility	iShares MSCI World Minimum Vol	MVOL	0.30%
Emerging market	iShares Core EM IMI	EIMI	0.18%

Weighted TER: 0.262%

Note that this would be a 100% stock portfolio. Also, since most of the funds actually have exposure to market risk, even if all the other factors don’t work you may still get decent returns. I want to be clear that while I wouldn’t recommend such a portfolio, I genuinely don’t think its crazy.

Reasons for

You really love factor investing. Maybe it helps you stick to your portfolio?
You are around other factor investing nerds. e.g. the rational reminder community where I learned a bunch of this stuff.
Probably higher expected returns? I genuinely don’t know, depends on the weights you assign to each component. I kind of just slapped some numbers on so don’t take it too seriously.
Really good risk factor diversification?

Reasons against

Risk premium may not exist after fees.
Momentum funds might just be a closet index. I don’t think there are good momentum funds out there that are Ireland-domiciled. From what I can tell the best are US-listed (tax inefficient), like those by Alpha Architect (IMOM, QMOM).
- Momentum funds might also offset the effects of value funds, since they may overweight the expensive stocks that value funds underweight. This may be avoided if the momentum fund targets a different universe of stocks.
There is no risk based explanation for momentum. Momentum is hard to explain if you believe in market efficiency; how are you taking on more risk by buying the winners?
Minimum volatility funds might not have good methodology. I don’t know much about this min vol fund or the factor in general. Do your own research.
Performs different from the market by a lot (probably). If it stresses you out that your portfolio is down when the S&P 500 is up all time high, maybe factors are not for you.

General rules

I have given you three sample portfolios to consider, but actually they don’t differ too much from each other. In fact, they just follow some really simple rules which you can use to construct your own portfolio:

Decide on your stock/bond mix. Allocate more to stocks if you are comfortable taking on more risk.
For the stock portion consider:
- How much home country bias?
- How much emerging market exposure?
- Which factors do you believe in?
- How much do you want to pursue factors?
For the bond portion:
- I like long term treasuries because they have high yield for a long term investor (but not many good options from Ireland-domiciled funds). Note that longer term = higher volatility. Intermediate or short term treasuries make a lot of sense too.
- Most other bond strategies are fine. Don’t chase yields too much or your bonds start looking like stocks (corporate bonds, long term bonds, and high yield bonds tend to be riskier)
- If your investment has a short timeframe, match the investment timeframe to the bond duration. E.g., for a 5 year investment try to get bond funds with ~5 year average maturities.
- TIPS sound great, I would recommend them if there were long term options (probably good even without).
Keep it simple. Remember that you have to manage it yourself, i.e. buy the thing and rebalance the weights when necessary (robo-advisor does the rebalancing for you).
That’s it. Stick to your portfolio!

Some of the smartest people have some of the simplest portfolios. A 50% global stocks 50% global bonds portfolio is totally reasonable. Simple, easy to rebalance, and really sensible. Even for factors you don’t have to complicate things: 50% global stocks, 50% small cap value is probably an unbelievably good portfolio in terms of expected returns. I personally invest in something between light and heavy factor portfolio (more light). I am compelled by momentum and low volatility, but until I see good funds introduced and can be bothered to properly research it further, I will just sit on what I currently have.

For many of my loved ones I simply recommend 70% developed market stocks and 30% home country stocks (I’d go as high as 50%). I don’t see a whole lot of value being missed out by emerging markets, and I think home country bias can be sensible (although I hate that there isn’t yet a fund that tracks the whole Singapore market even though the index already exists!).

If, when you are constructing your portfolio, you are really stressed about should I include/exclude this? How much should I weight this? Just remember that at the end of the day it probably does not affect whether you will achieve your financial goals, if you set reasonable goals. Since we have been talking a lot about expected returns I want to leave a quote that really left an impact on me:

I have spent most of my life studying empirical data. And what I know is volatility, the uncertainty, the unexpected part dominates most outcomes—not all of them, but most outcomes in my life are dominated by the unexpected part.

So when I want to judge the quality of an investment decision I’ve made, I don’t pay much attention to the outcome. I pay attention to: did I make a good decision based on the information I had at the time. The outcome, that’s dominated by the things I can’t forecast.
Kenneth R. French

The future will contain the unexpected. Just try to make the best decision you can today.

References/Further resources

Most of the things I learned about factor investing are from the Rational Reminder community and Alpha Architect’s resources. There is also a Rational Reminder Podcast hosted by Ben Felix and Cameron Passmore from PWL Capital. I think it is a great resource because they invite all sorts of speakers on so you get a diverse set of views. Of course, bogleheads are the OG resource for sensible investing.

Next read: Ireland-domiciled funds (on IBKR) compilation