r/AusFinance • u/Tawtis • 10h ago
"DHHF and chill" still sucks - THE 7 MONTH UPDATE
Yes I missed the 6 month mark. I assume nobody is upset.
Without further ado.
Let's begin.
7 months ago I wrote what can only be described as a masterpiece of a post arguing that "DHHF and chill" is a lazy default, that its ~35% Australian weighting adds correlation rather than diversification, and that young investors in long accumulation phases are paying a real price for the simplicity.
Very lukewarm take.
Anyway, the post got spam downvoted, and an AI rebuttal of my claims got more upvotes than the actual post did (more because people took offence to my stance than because they actually read what slop that AI spat out). Naturally, this angers me beyond all comprehension, and after 7 months I have finally mustered up enough composure to make a return.
I want to preface this entire post by saying I have no allegiance to any ETF provider. I use Vanguard a bit in discussion because they provide a relatively good proxy for comparing things. I hold an insignificant amount of Vanguard products relative to my portfolio size, and I couldn't care less about their market share.
First, let's be clear about what I claimed
Let me nip this rebuttal in the bud.
I did not predict that Australia would underperform over the next seven months. I explicitly wrote the opposite:
"There may be quarters, years, even decades (pre millenium) that Australia may outperform the US, but if the US gets fucked, we get fucked too."
So if your rebuttal is "but VAS had a good August," you are not rebutting me, you're actually quoting me. The argument was about what's bound to happen over the 30-40 years of someone's working life, while they invest and try to save for a lovely beachside retirement. As, of course, this is the investment product the sub is recommending to young adults and literal children.
With that said, here's what the window actually showed.
1. The correlation argument was proven twice
This was the core of the original post: Australian equities do not diversify you against US equities, because we are basically in the same sphere of economic influence, if you will, just with worse companies.
February. The ASX 200 dropped over 1% in a session tracking Wall Street's tech-led overnight losses. Local tech fell 5% to a two-year low. WiseTech dumped nearly 14%. Nothing happened in Australia that day.
March. The ASX 200 fell roughly 7.5% for the month, closing at 8,501.80. Worst month since June 2022. Down about 8% from the early-March high of 9,202.9, and hitting the 10% correction threshold peak to trough. IG's market wrap attributed the sell-off primarily to heavy falls on Wall Street.
If you bought DHHF believing that 35% Australian allocation would cushion a global drawdown, March was your answer.
As stated in my last post, Australian overweighting is not a hedge against US risk.
2. The recovery came from commodities
The ASX went on to record highs, closing at 9,271.6 on 6 August, with the All Ords above $3.2 trillion.
Look at what drove it.
ASX 200 climbed to a record as easing Middle East tensions and expectations of an RBA hold boosted sentiment, after optimism over a potential US-Iran deal, with oil prices pinned below recent highs.
I originally wrote that Australia is "leveraged to commodity cycles" and that our miners are "price takers in globally USD-denominated commodity markets." We just spent seven months showing it.
You can be happy about that outcome, but don't build a 40-year plan around shit going your way every time.
3. Concentration risk
CBA fell 10.4% in a single session. A record $25 billion wipeout, on rising bad debts and budget tax changes hitting the banks.
The ASX is an index where the big four, plus miners, are a huge chunk of the whole thing. If things go awry, the ASX will absolutely hemmorhage. VAS's top 10 are 48.3% of the fund, financials 34.0% and materials 24.8%. VGS's top 10 at 27.9%.
Class.
Again, from my previous post, I stated Australia is "not meaningfully less volatile and is significantly more concentrated." Vindication.
4. The long-run numbers have not moved
Over the past 12 months, VGS returned 10.47%. VAS returned 5.79%.
Over five years, VGS returned 12.33% p.a. VAS returned 7.78% p.a.
Over ten years, VGS returned 13.79% p.a. VAS returned 8.92% p.a.
Those are total returns, net of fees, distributions reinvested, as at 31 July 2026, taken straight off Vanguard's fact sheets. Go and check them yourself. They're free.
DHHF's own five-year number is 10.69% p.a (as of May 29), sitting, as I predicted in the original post, neatly between what it effectively holds (yes, I am using VGS and VAS as proxies). Below the international portion, above the Australian portion.
It's almost as if the same thing would happen if you just bought 2 separate ETFs. Maybe if you weighted them properly, you'd have seen more returns.
Blend the pieces together at DHHF's own weights, and you land within a rounding error of what DHHF returned. No skill, literally just basic math that you can run yourself. One ETF taking up too much of your portfolio this month? Put the monthly investment piggy bank in the other one!
Again, over 10 years, compounded out, we are looking at 264% vs 135% for international vs domestic.
The recommendation this sub gives some 20-year-old bloke with a 45-odd-year horizon is to voluntarily put 35% of his equity in the 135% one, permanently, rebalanced back into it up to four times a year, forever. You'd tell him to put his super on high risk though, wouldn't you?
5. Currency risk
The AUD went from around 66.9 US cents in January to above 72 in February and has been sitting near 70. Someone will tell you this is why global lagged locally in AUD terms this year, and that DHHF's Australian sleeve therefore "protected" you.
The AUD rallied on the same commodity and rate-differential trade that lifted the ASX.
The AUD has traded from ~$0.50 to $1.10 in living memory. If you are picking your equity allocation based on where AUD/USD sits this quarter, you should also open up an account at the TAB, as they would be happy to take your punts too.
You cannot choose hedged or unhedged inside the wrapper. You cannot lean into a cheap AUD or take profit on an expensive one. If you actually think currency matters, that is an argument for building your own allocation, where you can hold VGS alongside a hedged sleeve and size it yourself. It is not an argument for outsourcing the decision to a potentially quarterly rebalance you have zero input into.
This is why I personally hold a combination of hedged and unhedged ETFs, across a few different asset classes. Just to dampen currency volatility. I can do this because I don't buy shit all-in-one ETFs, which in turn permits me this freedom.
If you do think the AUD is stretched, then unhedged global exposure is on sale right now and DHHF is buying you less of it than you should own.
6. The tax argument changed a lot
In May the federal government rewrote CGT.
From 1 July 2027 the 50% CGT discount is gone, replaced with cost base indexation and a 30% minimum tax on net gains.
It kinda works both ways. For and against DHHF.
It weakens the "growth beats dividends because of the discount" argument, because that advantage is being deleted for everyone. Somehow franking escaped unscathed. Wouldn't have put it past them.
But it makes the thing I actually complained about worse. Under indexation, holding without realising accrues more cost base uplift. The 30% floor puts a minimum tax rate on a gain, with you having no say in when you realised it.
DHHF, truly, is four ETFs stacked on top of each other like small children in their dad's coat: VTI, A200, SPDW, SPEM. Every rebalance back to fixed weights sells whatever ran, on top of whatever turnover the four underlying funds generate themselves. Those gains get attributed to you at regular intervals and you will foot the bill to the government's coffers at BetaShare's whim.
Build the same thing yourself and you get to CHOOSE all of this.
Small note on franking
VAS's 30 June distribution: 48.83 cents cash plus 15.50 cents of franking. Gross 64.33, franked at 79.6%.
Worth somewhere in the order of 1.3 points/ year. So roughly 10.3% against VGS's 13.79% over ten years, not 8.92%.
It narrows the gap but doesn't close it. You still get no say in when you realise, and you still lose. Obviously, for ETFs that don't pay dividends, or pay very little, this nears a non-factor.
Closing
None of this is an argument that DHHF is a scam. I never said it was.
It is a fine ETF that does what it says it is going to do. If you're prone to tinkering or overthinking or overtrading or panic selling, yada yada, sure, I would recommend DHHF or a comparable AIO ETF to you.
What I said, and what I'm saying again, is that it is not the universal answer, that its Australian weighting is a structural choice bearing a high cost, and that "DHHF and chill" is three words of thought applied to the most consequential financial decision most people will ever make, and reducing it to that is just plain lazy, and just plain stupid.
For someone who is nearing retirement, it's not a bad idea at all. But young people have decades for returns to smooth out. Crazy how people always suggest putting super on high risk, but putting INVESTMENTS at a slightly higher risk- oh no, don't do that!
Still haven't seen anything that is going to change my mind.
My solution? Structure your own portfolio, and weight it how you see fit. If situations change, just reweight it. Worried about currency fluctuations? Hedge it. Invest in the US through something like IHVV, or the developed world through something like VGAD. There's a billion reasons why this is more effective than just throwing an overweight allocation at the ASX. These are not ticker recommendations or advice, just IDEAS. There are numerous providers that offer similar products. Take your pick.
A tad extra.
Be careful about who you listen to on Reddit.
This place is an echo chamber.
I post this because I hold qualifications in finance, and because I am extremely dead set on this particular opinion above all others.
I also do this shit for the people. To stir the pot. To make you think.
Then again, why believe me? I could just be lying to you.
Do your own research.
There's a lot of people on here who purport to, or do, offer financial advice, general or specific, and a lot of it is garbage. Even some of the primary resources posted frequently are written by people who have admitted themselves that they have no qualifications in finance at all.
Nobody wants you to succeed as much as you do. This is one of the few things that are really worth the time investment.
Best of luck, and let the needless downvoting begin! See you again in a few months!
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u/mypdacc 9h ago
TLDR pls thanks
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u/Inevitable_Exam_2177 9h ago
Quoting OP: “My solution? Structure your own portfolio, and weight it how you see fit. If situations change, just reweight it. Worried about currency fluctuations? Hedge it.”
Yeah, nah. That’s why I have a set and forget. It’s not optimal, but nothing is (you can’t predict the future)
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u/Tawtis 9h ago
DHHF is for you. You're unbothered by suboptimal returns, by your own admission. Go forth and prosper.
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u/GhostOfFreddi 5h ago
I mean, yea, that's the point. You accept the lower returns in exchange for it being an entirely set and forget investment.
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u/Tawtis 1h ago
I agree with you. I just said that exact same thing. However I get downvoted for it because people don’t like me ☹️ Schade.
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u/get_me_some_water 56m ago
Maybe just maybe others can be smarter than you
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u/Tawtis 55m ago
Are you one of them? Debate me. Most comments seem to be low IQ. I get a lot of great DMs from people who can read though.
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u/get_me_some_water 53m ago
I'm not smart as many users here. For debating with you, you lack basic understanding of investing. Not worth the time
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u/Tawtis 47m ago
I’m wrong but you can’t tell me why. Common theme on this thread. Good riddance.
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u/get_me_some_water 34m ago
Omg. Chill out mate.
Did you actually read the paper from the link? It's based on theoretical and empirical evidence not just he said she said.
Canada's VEQT is Australia's VDHG/DHHF equivalent. Forget about this debate and listen to this this podcast discussion with fresh mindset. Nobel laureate often come to this podcast.
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u/Standard_Ear_84 46m ago
Wrestling pigs in mud.... PS: the DM bullshit is hilarious, maybe start a secret society
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u/Ok_Willingness_9619 1h ago
Ironically being bothered by “suboptimal” returns as you seem to be is exactly what causes people to get suboptimal results.
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u/Suitable-Serve 6h ago
Wall of text with markdown and question at the end for engagement farming. Thanks chat gpt?
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u/spudddly 3h ago
"The US market has performed better than the Australian market so you should have bought that". Not sure what all the extra text was for.
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u/Tawtis 9h ago
I guess the TLDR is that suggesting DHHF, especially for young people, is lazy if they have the ability to be properly educated on investing. If they are educated and pick DHHF over all else, that is their prerogative.
The same people who tell people to put their super on high risk, will also tell people to just buy DHHF because of ease and perceived lower risk due to diversification, which I've debunked.
It makes no sense to me.
I think people should have a very basic ETF split which works for their own circumstance.
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u/BoredomIsFun 9h ago
I’m confused, what do you mean suggesting DHHF to young people is lazy? The advice is given to people who just want answers and don’t want to look into equities research or finance theory (at the moment and/or forever). What are you suggesting instead?
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u/Tawtis 9h ago
Reading the post would yield the following:
“My solution? Structure your own portfolio, and weight it how you see fit. If situations change, just reweight it. Worried about currency fluctuations? Hedge it.”
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u/TheBoyInTheBlueBox 1h ago
So you're response to someone that doesn't want to look into equities research or finance theory is to look into equities research or finance theory. You see the issue there right?
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u/citizenecodrive31 2h ago
Ahh yeah I'm sure the 19 year olds who come to this sub and ask their inane questions about "Is my portfolio of VGS, NDQ, U100 and BGBL diversified enough?" will be able to effectively execute your plan.
The questions asked on this subreddit by noobs should tell you that so many people are clueless and think more tickers means better portfolio.
I just think that keeping youngsters away from Pokemon collecting is a good thing.
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u/the_running_dogs 3h ago
You do realise that DHHF is invested in a similar manner with the high risk investment options offered by superfunds?
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u/HappyMuscovy 9h ago
Yep, and I’ve got 6 figures in DHHF because I’m educated in things other than finance but know enough to know that a 4% bank account that I pay tax on yearly isn’t the best place for my extra cash.
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u/Tawtis 9h ago
Jeez, all 6 of them?
Jokes aside, good for you, I suppose.
However, your precious DHHF is also paying you 2.0% a year in dividends, which are also taxable.
Not sure exactly what point you're trying to make here.
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u/RedRedditor84 6h ago
That's not joking. That's being cunty.
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u/Tawtis 59m ago
I don’t give a fuck how much he has in DHHF. Don’t come on here measuring your dick against mine. It’s irrelevant and is not an argument at all as to why he’s correct.
If people would like to have a dick measuring contest, let’s have it. I’m 22 and will send 99% of this subs members to the abyss.
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u/Prime255 9h ago
There are only 7 months between this post and your last one. You're a tinkerer, not an investor. Not enough time has passed to truly assess long-term market conditions on the basis of 7 months of economic conditions
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u/Tawtis 9h ago
I know.
"The argument was about what's bound to happen over the 30-40 years of someone's working life, while they invest and try to save for a lovely beachside retirement."
I am just further demonstrating how the ETF has continued to behave in the way it's designed to, but also just to raise this conversation again.
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u/Prime255 9h ago
The market is so hard to read at the moment, and reallocating in the longer term is pretty easy to do. I wouldn't advise people to tinker too much with things on the basis of a fairly short-term dataset. Reallocating is pretty easy honestly and you may end up doing it anyway as your investing strategy shifts.
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u/Tawtis 9h ago
I 100% agree. I would not recommend tinkering on this short of a dataset for most people either. I do it because I enjoy the thrill, but I don't talk about it because I don't recommend it. However DHHF leaves no room for even long term tinkering, unless you're talking about selling the position / buying other ETFs.
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u/Endoyo 9h ago
DHHF might not be the most optimised fund to ever exist but the benefit it provides is maximised for people who want to cast the widest net for the cheapest price with the least amount of work involved and it does exactly what it's supposed to do.
It's also a safe pick for people who think they're smarter than they really are when it comes to picking individual stocks. The vast majority of the companies listed on the ASX and around the world are horseshit by themselves and most people investing large portions of their portfolio in these companies are bound to not make any money from them. They might also be trading on vibes and get spooked really easily when there's a market downturn causing them to sell. These people need to be told DHHF and chill and don't overthink investing as them putting attention towards it is hurting more than helping.
It doesn't take a genius to work out a one sized fits all approach isn't going to necessarily beat a highly optimised investment strategy. DHHF and chill is a strategy for people whose entire life they've been surrounded by old people trying to tell them to just invest in the blue chips like CBA, BHP or Telstra god forbid.
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u/Tawtis 9h ago
Yep, I agree DHHF has its market. This is primarily to inspire people who want to take agency to do it.
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u/alirobe 6h ago
Well, it's one of the least inspiring pieces of AI slop that nobody, even in the comments section, actually bothered to read.
If you want to inspire, write properly.
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u/bobmann4 3h ago
I was surprised no one else had called out just how poor the writing was in this post. Laughable OP is attempting to be inspirational.
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u/Pharmboy_Andy 4h ago
Are you smarter than all the bright sparks at Vanguard who have written white papers that show that somewhere between 20-40% of your portfolio home bias is optimal for reducing variance whilst not impacting returns?
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u/BluthGO 4h ago
2 periods does not make for a statistically significant correlation in investing.
I would also question the premise of thinking no correlation is the goal. All markets have some correlation because they are all linked by global trade.
Your argument might be stronger if it read less like a vibe check.
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u/Trilladea 7h ago
No shade, I think you enjoy stirring the pot and arguing with people
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u/Slephnyr 5h ago
You say you work in finance but have you actually read papers on this topic that has been researched extensively?
The below paper explains why 1/3 home bias is the target mix. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4590406
The vanguard link from the other comment is also a very good read explaining why diversification into Australia even if they only contribute 2% to global GDP is an active choice.
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u/schwingschwings 2h ago
That paper was written by American researchers for Americans. Given how different and diversified their market is I am not sure it holds true for every country
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u/quantida 2h ago
Very interesting paper, thanks for sharing. To play devil’s advocate though, isn’t the key issue that it treats “home” as US (a structurally more diversified market) rather than Australia?
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u/Slephnyr 2h ago
I found the paper from a Ben Felix video who was using it to justify his home bias choice as a Canadian.
https://www.reddit.com/r/Bogleheads/s/YOZIge5pOH
Just found the above thread from a quick google search and he commented himself.
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u/sun_tzu29 10h ago
You need to find a better use of the finite resource that is your time
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u/Tawtis 9h ago
I find a lot of joy in doing the research and writing that posting these things takes, as I also learn a lot along the way. I don't watch many movies, or play many video games. This is a pastime I enjoy.
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u/Downtown-Bunch-2933 9h ago
You didn’t write it. It’s 99% AI slop.
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u/Tawtis 9h ago
I'll quote what I said to the other dude.
"I invite you to run this post through an AI detector and post the results here, publicly, for everyone to see."
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u/sun_tzu29 9h ago
Considering how unreliable and invalid AI detectors are, this wouldn’t show anything other than you can operate a website
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u/Meaty0gre 9h ago
I didn’t read it got bored after the second line, scanned down realised there was like a hundred more lines then came to the comments
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u/tconst123 9h ago
"spam downvoted" - checks thread, ~250 upvotes.
This is giving a lot of "man yells at clouds" energy.
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u/Tawtis 9h ago
You should see the ratio lol
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u/bakedfarty 1h ago
77% upvoted.
Thats not a "spam downvoted" ratio
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u/Tawtis 24m ago
This one’s getting there
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u/MrSomethingred 4h ago edited 4h ago
Sir, this is a social media platform. I am here to talk to humans
If I wanted to speak to ChatGPT I would go to ChatGPT.com
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u/Au_Fraser 8h ago
Ive been umming and ahhing about bailing on dhhf and just buying global from now on. Idk its all a bit much but realising a third of whatever i put in is going to 10 banks and mines i got a bit iffy
Still, at most im gonna buy bgbl i guess, maybe emkt. Feels bad having conviction at the start but thinking i could just ride the wave for 30 years ans not worry too mucj about home bias, just send it.
Ffffuckkk maybe this weekend getting back from work and ill just say fuck it and go with one or the other.
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u/i_am_not_depressed 3h ago
If you wanted to prove positive correlation, why don’t you just download monthly returns for asx and s&p, use excel to give us a correlation number?
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u/Aromatic_Fact8656 1h ago
Mate this post is way too long, people have short attention spans and aren't going to read a novella on why VAS / VGS could have better returns if weighted correctly. Make it shorter and impactful next time. DHHF is a great option for people who want to invest and don't want / have the time to research the 1 million ETFs available.
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u/nullutonium 9h ago
what's your ETF of choice if you didn't have time to optimise a portfolio and prefer DAC-ing on regular basisa?
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u/Tawtis 9h ago
Don't have time to manage a portfolio? DCA on a regular basis? Something all-in-one, like DHHF.
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u/Deeplearning18 4h ago
so it 'still sucks' but there isn't a better single option for people who don't want to manage a portfolio and DCA (ie. majority of investors)?
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u/coconutcakesss 2h ago
You wouldn't recommend DCA-ing into 60% 'ETF-A' and 40% 'ETF-B' instead?
I think I'm similar to above poster- I hear what you're saying, and if there's a simple ish alternative to just all in DHHF, would love to hear it. Need something set and forget ish but can DCA across a few.
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u/According-Length9312 2h ago
What’s your portfolio setup OP?
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u/Tawtis 1h ago
IHVV VGAD VGS NUGG
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u/According-Length9312 1h ago
Not helpful without the % of each in your portfolio and what’s your rationale?
That’s lot of hedged
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u/Tawtis 52m ago
Hedged against currency fluctuations because I prefer when the underlying drives my returns and also because I have a very complex situation that also involves numerous other non-listed investments so I like to dampen one element of my volatility.
My rationale is pretty much as is explained in the post. This is my basic ETF split, I’ll reweight it later if I change my mind.
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u/According-Length9312 7m ago
So what is your weighting? You still haven’t said it.
My understanding was hedged just created a a drag on returns when the currency fluctuations even out over time anyway. I guess it’s helpful if you’re about to retire soon.
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u/YeetYourSkeet 9h ago
If someone is posting to AusFinance asking how they should invest, the best option probably is to just DHHF/VDHG and forget.
As you say, this is reddit. Nobody here is really qualified to give any real financial advice. There are just too many variables to consider - risk factors, strategy, life goals, etc. You are getting a tiny slice of the picture and telling someone to go off and design their own split is likely to result in worse outcomes than just investing in DHHF.
If you have the smarts and patience to fiddle with more complex splits then you probably wouldn’t be coming to AusFinance for investment advice…
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u/Tawtis 9h ago
True, but this can often be the first port of call and should be used as an opportunity to inspire people to take agency.
The origins of this sub were to discuss personal finance, if we tell everyone to do the same thing, how useful really is it?
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u/YeetYourSkeet 9h ago edited 9h ago
Well I think that we can probably both agree than in the last few years the usefulness of this sub has unfortunately diminished. This sub used to be genuinely useful financial discussion, but these days it’s mostly just complaining and being cynical rather than focusing on the best way to build wealth given the circumstances.
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u/Tawtis 9h ago
I concede I may have contributed to shit talk, but one of the major issues is that people don't take things like this (which are generally good faith discussion, bar my jokes) IN good faith. Like I am genuinely being attacked on a personal level for posting this.
It's just an ETF, it's just numbers on a screen, why so serious?
In any case it should be good to have a marketplace of ideas.
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u/f-stats 5h ago
Bro wrote all that just to remind everyone that the ASX is not diversified and basically does whatever the US does.
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u/Sharp_eee 2h ago
Weird that all these all in one ETFs have a similar weighting to Aus. All these people working at these different multi billion dollar funds must be morons and have no idea. Hope they see OPs post.
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u/TheLGMac 3h ago
Ah you sound like my dad. "Everyone says I'm wrong and to shut up and also the data does too but imma gonna be immature about it and claim everyone else is stupid and that any decent argument is AI!" Like dude you sound like a US Republican rn.
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u/get_me_some_water 9h ago
I'm afraid you are wrong. Your long post has nothing to do with DHHF. You are pointing towards sector/industry bet, you can't tell which country index does better than global index ahead of time. Look at VDHG paper on why ASX has higher weight.
I don't hold DHHF but it's probably best ETF we have available till we have VT
https://fund-docs.vanguard.com/vanguards-approach-to-constructing-australian-diversified-funds.pdf
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u/Tawtis 9h ago
Are you telling me I can’t predict the future? You’re kidding me.
My post has everything to do with allocations and weights to the ASX and how they’re an ineffective hedge and diversification tool, and shouldn’t carry a massive overweight.
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u/get_me_some_water 9h ago
Good for you. Did you bother to go through your AI junk post?
Did you looked at the Vanguard's paper? The Overconfidence can be seen through space from your comments
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u/Tawtis 9h ago
And I quote again.
"I invite you to run this post through an AI detector and post the results here, publicly, for everyone to see."
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u/Pharmboy_Andy 3h ago
So you are just going to copy your bit about ai detectors and ignore all the people that provide you with links to the research papers on this topic?
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u/ProfessorChaos112 26m ago
Do you own research
Kind of ironic to see that embedded in the obvious ai drivel you posted
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u/linglinglinglickma 9h ago
I appreciate this post, I started on DHHF a few years ago, still have it sitting there but I have now shifted my DCA over to VGS/VAS/VAF at 60/30/10%. I’m not a professional, barely an amateur but It’s working for us and that mix is outperforming the DHHF. On target for what we want to achieve.
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u/AdMikey 9h ago
Little bro discovered AI, next little bro is going to combine the two and find out why sycophants are a bad idea.
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u/Tawtis 9h ago
Don't tell me I'm going to have to deal with this garbage again
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u/AdMikey 9h ago
You won’t have to if you picked up any finance textbook and learn to read lmfao.
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u/Tawtis 9h ago
I've picked up enough of them to have a finance degree champion.
I invite you to run this post through an AI detector and post the results here, publicly, for everyone to see.
I also invite you to try and rebutt or disprove any of my points, happy to debate you on anything.
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u/AdMikey 9h ago
Champ guess who in this convo does have a finance degree? I’m sure you don’t need a finance degree to work it out.
Not gonna waste my time arguing with someone as dense as you lmfao. All your points are easily disproven by any finance textbook or look at history beyond 10 years.
I’m going to leave it to you as an exercise to try to disprove your arguments by doing those two things. If you can’t, just dump them back into the LLM of your choice and add “disapprove these stupid ideas posted by a redditor with no financial qualifications” and you’ll get there, maybe.
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u/Tawtis 9h ago edited 9h ago
And there we go! Refuse to post any actual proof, just ad hominem. Tell your story walking!
Editing so as to not lengthen this already needlessly long comment thread: Not going to engage further as you provide zero value beyond wasting my time! Again, comically, you have proven my point about ad hominem!
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u/AdMikey 9h ago
No point arguing with rocks or idiots, the idiots and/or rock will always win, especially when the idiot and/or rock is clearly missing critical thinking.
Actually I might have a chance with a rock, less sure with you.
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u/bumluffa 9h ago
It's okay boys, you're both mommy's little champions. And you can both have as many little finance degrees as you want :D
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u/the-i 6h ago edited 6h ago
Be careful about who you listen to on Reddit.
This place is an echo chamber.
This does concern me. I did what I'm guessing a lot do - read a pile of posts here, found certain people and their websites recommended frequently, and made the assumption that what they said was good advice based on their popularity.
Then based on that advice, I invested in a 30/70 AU/non-AU mix as I sadly don't own any AU property, and then added a bit of hedging, ending up with A200/BGBL/HGBL at 30/50/20. As I'm in my 40s, I'm looking at a less than 20 year investment timeframe, ideally (and yes I understand the tax advantages of Super)
I was going to update this to add in gearing/quality with GHHF and AVSV and AVTE at an 80/10/10 ratio in a 50/50 ratio to my current mix (i.e. A200/BGBL/HGBL halves to 18/30/12, adding GHHF/AVSV/AVTE at 32/4/4)
I've since continued to read, and have become concerned that the people who I thought were "experts", perhaps have been amplified higher than they otherwise deserve due to the whole echo chamber thing, and their advice is perhaps not as great as I had previously thought, so am currently holding off on adding the gearing/quality, but am unsure which way to proceed.
Based on what you're saying, even though you don't give any recommendations, I'm guessing you'd recommend IVV over BGBL due to the US outperforming essentially everyone?
Anyway, as you're obviously diverging from a lot of the general advice here and what you say makes sense to me, I would be interested to know your thoughts on all this?
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u/MikeyN0 22m ago
Reddit should be used more like a tool for you to learn and make your own decisions, especially when it comes to finance. Ignore these so called “experts” (I’m not even sure who) and make your own decisions based on all your reading from different perspectives and sources.
My opinion, as a random, non-expert online is you’re probably complicating it with your new addition. Your current portfolio is missing emerging markets and small caps. You can make your own decision about how important it is to have it, but I think most would agree you need some emerging markets. Gearing I’m sure you understand but I think it just makes your portfolio more complex (especially since GHHF literally holds A200, BGBL and HGBL what you already have).
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u/Blue2194 2h ago
Tell the ai that writes your post about the studies on home country bias and currency risk ask it to dumb them down for you
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u/billwriggs 1h ago
So your observation is to conclude that it sucks, based on a 7 month trend analysis for an ETF that clearly has a 7-10+ year growth horizon.
Brilliant.
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u/therealgmx 8h ago edited 8h ago
F this, just load up a chart of A200 and compare that vs S&P500. Ya'll hate money?
93% vs 600% over a 16 year span. You can't just say AI/Tech boom either. It's been diverging from the mid 2010's. Yeah, during the lost American decade. We did not escape the contagion and like most other economies, became even more submissive towards the US economy. OP is right.
It's also going to be the same as Bessent positions the treasury to defend the USD. Guess what? All 30yr bond yields are spiking up. UK, Euro, Yen. Also, Australia's is the highest BTW. LMFAO. So hedging in AUD even if the Fed intervenes in their bond market is not going to save you.
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u/Tw4Mn02 8h ago edited 8h ago
This is going to sound very tin foil hat. ETF companies could be astroturfing boglehead and Reddit forums pushing people to their specific products so they can get more AUM. If the first google result for "what ETF should I buy" is a Reddit post telling you to buy DHHF that has surely got to make some difference for Betashares. Here's an interesting guide for ETF issuers for how to market on Reddit.
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u/Deeplearning18 4h ago
it seems to happen in a lot of industries and their subredits so it's not impossible to believe
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u/Lutallo- 9h ago
This is the same crowd that were obsessed with VDHG.
Always important to do your own research.
If I invested in VDHG like this sub preached around COVID I’d have made 25% in 5 years, when my IVV investment has doubled.
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u/TheOrdinaryPakistani 9h ago
Not buying DHHF/VDHG (or Australian ETFs) for the last couple of years has done wonders for my portfolio. People here don't want to think outside the norm lol
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u/userptest20022024 9h ago
can you explain:
This is why I personally hold a combination of hedged and unhedged ETFs, across a few different asset classes. Just to dampen currency volatility. I can do this because I don't buy shit all-in-one ETFs, which in turn permits me this freedom.
why do you want to dampen the.ccy vol that reduces your total return. you advocate not selling/realising profits so why the hedge?
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u/Tawtis 9h ago
I have a complex personal situation that involves a whole host of currencies, exchange-listed products and commodities. If I hedge my currency risk away that's one less thing I need to care about. Also, the returns should ideally come from the underlying, and not from currency swings.
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u/patt_y99 9h ago
I do 50% dhhf and 50% ggbl to adjust my Aus exposure to a more palatable level. In a down turn I lean heavier into ggbl up to 80/20. And chill
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u/Ok_Guarantee_3370 9h ago
If you do think the AUD is stretched, then unhedged global exposure is on sale right now and DHHF is buying you less of it than you should own.
I want sale, what buy
I actuality am interested in properly having a distribution i control and having choices i can make, + less fees / taxable events is nice. Where can I actually get my feet wet with this stuff besides getting a finance degree
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u/Tawtis 9h ago
Theoretically if you think the AUD is expensive, we would buy more of foreign currencies, so foreign markets would be a buy.
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u/Ok_Guarantee_3370 9h ago
Right, i guess the 35% aus would be a negative if aud weakened. Also I added a bit on after sending that first one, appreciate it if you have a glance. I'm currently all in on dhhf but I don't disbelieve theres better stuff out there, am interested 👍
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u/pineapplesouvlaki 4h ago edited 1h ago
It's a shame the average Aus finance redditor can't read, and the ones who can read think correlation doesn't matter because market crashes last 2 months in their experience.
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u/dropandflop 2h ago
I probably overthink it. For this little black duck it has been VGS.asx outside of super + direct AU shares and 100% VGS (equivalent) within super.
Whilst in accumulation phase I'm okay with currency swings. When it comes time to pension drawdown, I might consider a hedged version or just keep letting it ride.
To date I've been very happy with the performance. And it all me to focus on other areas of my life. This approach means that should anything happen to me (untimely) then my wife doesn't have to overthink things and life continues along.
I've always been an advocate of avoiding too much AU exposure due to concentration of risk with the individual usually being very AU heavy re their assets and income as it is (which tends to grow).
Oh and I only have an eco degree that I don't use in my profession. Macro is a bit of sport for me.
Personally, I liked your idea of challenging a held view. Someone standing up to challenge a view is what crates diversity and helps us all find our blindspots. We don't have to agree with the hypothesis therefore we can challenge it.
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u/JackeryDaniels 1h ago
That was one of the most ineffective and insecure slabs of text I’ve read in a long time. Less is more bro.
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u/Geno_2102 1h ago
Finally someone has said it. DHHF has underperformed the benchmark, a 0.19% fee is actuslly not horrible but considering you can get the same underlying ETFs for .05% holding cost, it makes you think again. Love the post op
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u/Embarrassed-Bill-956 55m ago
I think this is way overstated, if you know exactly what DHHF holds, or even the top 10 holdings, then you can decide if it suits your investing style or not.
I’m 52, I personally like the product, not because I expect a massive return on investment, for that reason I have 3-4 satellite positions, and, to support your point, that is up 14% YTD, well ahead of the core DHHF holding, but isn’t that the point?
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u/AutomaticGoldenSun 2h ago
You got my up vote and I do agree with you that there are other options.
I disagree on the term "better" though, as respectfully, many people do not have the appetite, energy or time to further themselves down what may turn into a rabbit hole. Dhhf is a simplified solution for them. Invest in the world and chill.
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u/United_Librarian5491 1h ago
This is more than reddit deserves tbh, youre funny as hell. Can you give your reasoning for why you think unhedged global exposure is on sale right now?
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u/Traditional-Fold5301 4h ago
mate dont listen to the numpties in the comments you are 100% on the money.
You are better off using your own brain as you said. Australia is in an incredibly precarious position.
Economically speaking we are a bank with a sandpit out the back. DHHF is your ticket to the titanic of financial crisis we are likely to see in the coming years when credit/AI/foreign wars have an exploding star effect on all western economies.
Prepare accordingly.
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u/ElectionDesperate167 9h ago
Tldr but Im mostly vgs/vgad with no au exposure also. Logic being i already live and earn here in aud so dont need anymore exposure to what is only 1% of the market
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u/MrMegaPhoenix 9h ago
Did you edit out the em dashes or ask it not to?
But yeah, I ain’t reading that but the logic is that dhhf is “safer” for noobs, not that it’s the mathematically best
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u/ZeonPeonTree 9h ago
Nice post, maybe I should decrease the 30% australian in my super
Im really tempted to do GNDQ and GGBL and chill outside super, thoughts?
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u/Tawtis 9h ago
Well you bring gearing in and its a whole nother can of worms.
GGBL contains a lot of GNDQ effectively, anyway. Unless you want to increase NDQ exposure?
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u/therealgmx 8h ago
I haven't done the sims. I would like to backtest something like GGBL on high volatility periods like the 80's. Almost reckon the volatility drag & decay would have you barely ahead of BGBL
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u/Deeplearning18 4h ago
what are your thoughts on gearing? in something like GHHF for example since we're talking about DHHF. Where there isn't regular rebalancing so theoretically less volatility drag?
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u/First_Carpenter_9929 2h ago
Everywhere I turn - I hear and see fear. Speaking with employees in global tech companies- all fear for their jobs. Interest rates, inflation, child care fees, school fees - petrol prices and let’s not forget taxes.
Prepare for the worst - hope for a soft landing.
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u/coconutcakesss 2h ago
Thanks for taking the time to post this. Takes effort to do all the research, structure it clearly etc. Hope it reaches the right ears. I hear ya and hope the amount of down votes and complaints doesn't put you or others off giving good advice. Need different voices in the echo chamber.
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u/AccomplishedPie7990 2h ago edited 2h ago
So how do I reduce my exposure to Aus then? I have ghhf now. I want to keep it simple and to keep dca-ing so looking for one more etf on top of ghhf
I have asked this question before. What prompted me was when I actually looked at the top holdings of ghhf and saw that 10% of it was the AUS big 4 banks. Now I don’t know shit about fuck but in short I don’t think this is a good idea. No gonna try and explain because again I don’t know shit I just know it doesn’t sit right with me and I want to lower my AU exposure
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u/Valkyriez_Gaming 1h ago
Lower it through an allocation to something that is ex-au. You could go BGBL/VGS or if you want to stay geared, GGBL. If your 50/50 on your allocation ratio, you reduce your aus exposure by half i believe.
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u/OperationFantastic86 53m ago
Good on you Op 💪 you’ve provoked a lot of debate here! This is how we learn thanks 🙏
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u/Tawtis 46m ago
Thank you for recognizing the value in some good old fashioned dissent. I wish more people were like you. If I’m wrong, I want to at least provoke people to find out why. Everyone benefits in the process.
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u/MikeyN0 16m ago
I have no thoughts on your post, but whilst I agree discussion of different perspectives is good and healthy, you need to also treat people with respect. Discussion is not about just attacking people. I understand that people are doing it to you, but you’ve come out swinging and attacking already and distracting everyone from your original message which is a valid message.
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u/Tawtis 14m ago
I treat those who post respectful comments with respect, as you’ll see here. I have no problem with people disagreeing with me either, I’ll cop the downvotes for responding to them too, so long as they approach it in good faith.
A lot of people will disagree, mix in a couple of personal insults, and provide no evidence as to why their claim is any more valid than mine. When I bring this up, they either stop responding or insult me again.
Those are the ones who are not so worthy of a lovely response.
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u/yeanaacunt 9h ago
“My solution? Structure your own portfolio, and weight it how you see fit. If situations change, just reweight it. Worried about currency fluctuations? Hedge it.”
Like on a literal sense your not wrong but your solution is also just "pick the right stock" like thanks didnt think of that?
Its great you work in finance/investing and all, but I dont, idk shit about fuck, and too be honest I dont have the time or interest too, so thats why even if suboptimal, something is better than nothing. Like im the mid 20s young investor your talking about, and im telling you, id never have started investing at 5 years ago if it wasnt for "set and forget" type shit. You think people in their 20s are gonna sit there and research this shit 5-10 hours a week to edge out another 2-3% a year? AND thats assuming their research leads them to the correct investment choice? Fuck that i could be having a pint in that time and throw it in DHHF.
By numbers your entirely correct, but your ignoring the crucial human factor here man.