Not sold at the time of the cryptomining rally, but now it is. The money is invested in other assets.

Someone an idea which values are currently attractive, should be value with some dividend. :-)

Country weightings in the portfolio

Reading time: approx. 5min (fast), approx. 8min (slow, @leveragegrinding 😛), think so 3min (@DonkeyInvestor 🙉)

In the last few days I have been thinking about the weighting of some regions in my portfolio. There is always a hot debate about how much you should weight the US, Europe, Asia and the rest of the world in your portfolio. Should one have "China stocks" at all or how much USA share is too high?

Especially when it comes to the weighting of US corporations there is a hot debate: for some an overweighting of US corporations is perfectly fine, for others it is a cluster risk. In the MSCI World for example, the USA is weighted at 60%. That is why in the classic 70/30 strategy MSCI World ETF as well as an Emerging Markets emerging markets ETF is added. It gets even more complex if you add a Europe ETF on the STOXX Europe 600 is added.

Something that rarely plays a role in the debate, however, is the fact that this weighting only reflects the countries of origin of the stock corporations. Corporations like Apple $AAPL , Microsoft $MSFT or Google $GOOGL may be U.S. companies on paper, but they generate their sales worldwide. A LVMH $MC may be from Europe, but generates most of its sales in North America and Asia. Toyota $7203 is from Japan, but generates sales worldwide.

I think you see the problem: important to get an impression of your own regional exposure exposure are not the countries of origin of your shares but rather the question of where the sales are generated are generated. I wanted to get to the bottom of this question specifically for my portfolio.

Inventory

In my personal portfolio, the distribution of individual position sizes (as of May 24, 2023) looks exactly like this:

19.3% Apple $AAPL

11.1% Costco $COST

9.9% Allianz $ALV

9.5% VICI $VICI

8.3% United Health $UNH

5.6% Microsoft $MSFT

5.4% Visa $V

4.4% KLA-Tencor $KLAC

4.1% BJ's Wholesale Club $BJ

4.0% Starbucks $SBUX

3.4% Paychex $PAYX

3.3% DEFAMA $DEF

3.1% Air Products & Chemicals $APD

2.9% Rio Tinto $RIO

2.7% McDonald's $MCD

1.4% Greencoat UK Wind💚 $UKW

0.5% Coca Cola $KO

This corresponds to a weighting of 81.4% USA and 18.6% Europe. Mind you, this weighting corresponds to a weighting according to countries of origin of the companies. So do I have a huge cluster risk as far as the USA is concerned? In addition, there are no Asian shares in my portfolio.

Now I have made the effort (in a sweaty manner) to all annual reports of the 17 companies on the corresponding investor relations pages. In some cases, sales are broken down by region. Unfortunately, it is clear that not every company provides the same breakdown. For example Apple breaks down its sales in [1] according to Americas, Europe, Greater China, Japan and Rest of Asia Pacific on. The situation is different for Visawhere in [2] sales are only broken down by U.S. and International is broken down.

After a lot of toing and froing, I finally decided to split into the regions North America, Europe and Asia & Rest of the World to the rest of the world. North America includes the USA, Canada and Mexico. Europe is mainland Europe and Great Britain. The last category then includes China, Japan, South Korea, Australia and everything else.

Just about every company reports the percentage of revenue that is generated in the US. As mentioned in the example of Visa, this is not necessarily useful to find out the share of sales for Europe and Asia if reported according to the principle "USA and the rest of the world".Partly I had to find values with a "good guess" guess. Smaller researches in the net helped me here. The last decimal place is not important here, but rather a correct order of magnitude of the sales distribution.

Result

Before I present the results of my analysis, I would like to say a few words about the methodology. In my calculation, the sales shares of the individual companies are weighted according to portfolio share.

ExampleApple has a 19.3% weighting in my portfolio and generates 18.8% of its sales in Europe. The 18.8% European share is then weighted at 19.3% in my calculation. Apple thus provides for a roughly 3.6% European share in my portfolio.

Without further ado, here is the result of the weighted sales distribution by region in my personal portfolio:

56% North America | 24% Europe | 20% Asia & Rest of World

The difference to the country weightings in my portfolio are therefore:

-25.4% North America | +5.4% Europe | +20% Asia & Rest of the World

Despite an 81.4% weighting of the USA in my portfolio, only 56% of sales are generated in North America and this despite the fact that I have real USA-pure-plays like VICI and BJ's Wholesale, which generate 100% of their sales in the US, are highly weighted in the portfolio. The European share is about 5% larger than the countries of origin of my companies would suggest and despite not having a single Asian company in my portfolio, 20% of the weighted sales are generated in Asia and the rest of the world.

Conclusion

Diversification by country is important. However, in my opinion, too much attention is paid to the countries of origin instead of really looking at where the companies' sales are actually generated. Unfortunately, there is no quick way to find out. The way over the individual investor relations sides of the enterprises is laborious and nevertheless incomplete. Here I would wish for greater transparency from some companies. Exemplary here were above all Apple and KLA-Tencor.

In addition to the pure "sales risk", it is of course still necessary to consider the political- and regulatory risk. I can sleep soundly with the revenue distribution in my portfolio even if it might be a nightmare for others.

What is your opinion on this?

Sources:

[1] Apple Financial Report 2022: https://annualreport.stocklight.com/nasdaq/aapl/221338448.pdf

[2] Visa Financial Report 2022: https://s29.q4cdn.com/385744025/files/doc_downloads/2022/Visa-Inc-Fiscal-2022-Annual-Report.pdf

#dividende #portfoliofeedback #dividendendepot

From seeking and finding meaningful financial goals

And the appropriate strategy

Again and again I read statements on getquin like "My goal is to read 50 books about finance this year and then finally start investing", "My strategy is to invest 300 euros every month" or "I have set myself the goal to increase the value of my portfolio to 20,000 euros by the end of the year - buy & hold!". Don't get me wrong, I think it's mega that you're all here, dealing with your finances and sharing your ideas and views with the community. And it's also much better to invest 300 euros every month - simply because you can - than to invest nothing at all. But there's so much more ... And that's what I'm going into today!

Step 1: Make clear what you want

@InvestmentPapa always rings in my ears when I think about this topic, which used to be "Hobbies - soccer, skiing and reading. Investing? Necessary evil with no chance of alternative." wrote. And he's damn right about that. Investment is not a hobby. Money and asset growth does me absolutely no good if I don't use it. Get clear about why you want to invest money! Putting 300 euros every month into an ETF is not a goal. It is a measure that could help you to reach your goal. Having X Euro in your portfolio at the end of the year but at the same time following a buy & hold strategy including a savings plan is not a reasonable goal either. The stock market fluctuates and if you are not actively trading, you have no influence on the short-term size of your portfolio.

Of course, the desired goal differs from investor to investor. But money simply for the sake of money does not make sense. Some people want to close their pension gap, buy a house, work only part-time, bequeath as much as possible to their children, show off their assets to others, take a money bath or simply see a really big number in their own account.

That's your goal. Or at least the first step towards it.

Step 2: Formulate your goal

You now know where you want to go? Great. Then make it more concrete. Embellish your desire with details. How big and luxurious do you want the house to be and when do you want to buy it? How much do you want to bequeath so that your children can live a carefree life (who will probably be close to retirement themselves by the time they inherit)? How big is your pension gap and when do you want to retire? ...?

A concrete goal could be, for example, "I want to reduce my working hours by the age of 50 at the latest and make up the difference to my full-time net salary through dividends!"

Step 3: Putting your goal into figures

This is the part where you need all the things you learned about math in school that you thought you'd never need again anyway. Sorry.

To stay with the example from step 2: Just because you now know that you want to reduce your working hours at 50 and make up the difference to your full-time net salary through dividends, you still don't know how much dividend you specifically need. So you have to calculate the gap to be filled. Or in the case of other goals, for example, the capital required at time X. Or how many coins fit into your bathtub for a money bath.

Especially for long-term goals it is important to consider changing parameters - like a higher salary or inflation. Let's assume that 2,000 euros net is currently enough for you to live on and that you want to draw half of that in 25 years via dividends. Then you have to take into account that your cost of living in 25 years will be significantly higher than today due to inflation. If you calculate with an inflation of 2.5% / year on average, in 25 years you will no longer need 2,000 Euros net to live, but 2,000 Euros * 1.025^25 = 3,707.89 Euros. So to reach your goal, you need to generate a net dividend of about 1,853.94 euros and not just 1,000 euros. In addition, it could be that your lifestyle changes in the next few years - e.g. children, more luxury through a higher salary, moving to a more expensive city, ... and therefore your needs may be higher in 25 years. Here you have to make assumptions and consider them accordingly. Overall, I recommend to calculate a little higher than too tight.

Add concrete numbers to your goal. Make it more tangible. Make it predictable. "I would like to reduce my working hours by the age of 50 at the latest and make up the difference to my full-time net salary through dividends. To do this, I need a net dividend of 2,500 euros / month in 20 years, taking into account any salary increases and a reduced tax burden due to the lower income."

Step 4: Write down your options and calculate the required rate of return

You thought that's it for the math? Sorry, now it really starts.

You know your goal and the numbers behind it, but you don't know how to get there. Accordingly, you must now become clear about your financial possibilities. Do you have a large sum available that you can invest immediately? Do you want to save monthly and how high could the savings rate be? Could this savings rate increase or decrease until you reach your goal? ...?

Once you are clear about this, you need to calculate the required rate of return. For example, if you need 300,000 Euros in 20 years and you can invest 50,000 Euros once, the calculation is 50,000 Euros * x^20 = 300,000 Euros. Wolframalpha [1] calculates x at about 1.0937. So you need a return of 9.37% per year to reach your goal.

Another example: You want to invest monthly and receive a payout of 2,000 Euro per month after 25 years without capital consumption. The first thing to do here is to calculate the required capital. For 2,000 euros per month or 24,000 euros per year and assuming 25% taxes on the income, you can reach the goal with a payout ratio of 2% and a capital of 1.6 million euros: x*0.02*0.75=24,000. You calculate with 3.5% payouts? Great, then 914,286 euros is already enough.

What return is needed to generate this capital? For this you can use Excel or tools like [2]. With a monthly savings rate of 500 euros, a target amount of 1.6 million euros and 25 years time, you need a return of 15.906% per year [3]. If you consider a certain return to be realistic, you can of course also turn the calculation around and calculate the monthly savings rate required for the return and target capital.

Now add to your goal the conditions that are given (your financial possibilities) or necessary (the required return) to achieve it.

Step 5: Select a suitable strategy

Now that you know your goal, your financial possibilities and the required return, you have to choose a suitable strategy. Your strategy describes how you want to achieve your goal under the given financial means. From "I just regularly stock a world index" to trading to "back and forth makes pockets empty" there are plenty of possibilities. Besides the classic buy & hold approach of a globally diversified portfolio, getquin also presents different strategies again and again. You can find some examples in the sources under [4], [5], [6] and [7] (naming these strategies is not a recommendation from me, you can find my strategy under [8]). It is important that you ask yourself for each strategy about the expected return (historical data, do they go far enough into the past to be reliable? ...?) and the risk (how likely is it that the return will be achieved, what is the maximum loss in the worst case, how likely is a failure of the strategy? ...?).

You should choose the strategy that is most likely to achieve your target return at the lowest risk. The risk should also be <= your personal risk tolerance. If you get gasps because your portfolio is 0.5% down, you should rather stay away from crypto. Also, the strategy should match your skills (already existing or learnable in a reasonable amount of time) and capabilities. It's no use if you decide to trade based on technical analysis, but you don't know anything about it and you live as a hermit in a desert in Africa without electricity and internet.

Sometimes it can make sense to use strategy A (asset accumulation) for a few years and then switch to strategy B (asset management / consumption). In this case, you should take into account any taxes that may be due on your profits if you switch and set the target for wealth accumulation higher if necessary to compensate for this.

Step 6: Nothing is set in stone

Our world is very fast-paced. Things change from one day to the next. Personally, locally and globally. You should therefore regularly check your goal and your strategy and readjust them if necessary, but please don't throw them over the top every year and start all over again.

Congratulations, you've now set a meaningful financial goal and chosen a strategy that fits it.

What, you are a low-income earner with ambitious goals and you haven't found a strategy that brings you within reach of your goal with your given financial capabilities? Then please read the next steps.

Step 7: You can't reach your goals in your current situation? Then improve your situation

Important: Be focused and rational. It does not make sense to read 50 books about finances. Investing in your human capital is right and important. But please be specific. It would make more sense to look at what will actually help you. Can you significantly increase your income through further education? If yes, then continue your education and apply for a better paying job. Does an active strategy promise a higher return on investment that will help you reach your goal? Then acquire the necessary skills.

Continuing education and new skills can be an insanely great lever to reach your financial goals. Don't underestimate them, but also use them wisely and don't invest time and money in subjects that won't help you reach your goals. Sometimes it makes sense to take a few steps back to get a running start.

Step 8: You can't improve your situation? Then you need to adjust your goal

Especially the first financial goal is often simply too ambitious or your own possibilities are too limited. In this case, unfortunately, there is no way around adjusting the goal. But that's okay. Defining a meaningful goal is usually an iterative process. However, by doing the groundwork, you should now have a sense of what's realistic and what's not. Adjust your goal and strategy with your newfound knowledge and under your given circumstances.

Conclusion

Not worrying about your financial future is easy. To save / invest a few euros a month already requires more work and energy. Accordingly, I think it's great that you're here and very likely already doing that. But to really set meaningful financial goals, it takes much more. You have to deal with it, you have to calculate, you have to deal with different strategies, you have to check and correct regularly and maybe you have to leave your comfort zone sometimes and increase your human capital. But it's worth it. Not only that the probability increases to have actually achieved "later" what you want / is important to you. A goal and a strategy also help you to sleep more peacefully, to say goodbye to unrealistic ideas and to be able to enjoy your life today and not in 30 years. Why? If you know where you want to go, what return you need for it and what financial means you have available, you don't have to invest every cent you have left at the end of the month. No, you can spend it with a clear conscience - you know that you will reach your goal with your strategy even without that cent.

What is your goal? Have you already found the right strategy?

Please, you are welcome.

Your StrategyDonkey

Sources

[1] https://www.wolframalpha.com/input?i=50000*x%5E20%3D300000

[2] https://www.zinsen-berechnen.de/

[3] https://www.zinsen-berechnen.de/sparrechner.php?paramid=eifzwfp7mj

[4] World index + Titans from @Chefkoch256 https://app.getquin.com/activity/SzlYKFECjG

[5] Overview of different strategies from @GetRichorTryin https://app.getquin.com/activity/oNRQtDbTcO

[6] Global Tactical Asset Allocation by @Epi https://app.getquin.com/activity/OpanTqOJoV

[7] 3x Leveraged Rotating Strategy by @meta (currently but gone under the bitcoin maxes). https://app.getquin.com/activity/YWrjxizhqG

[8] https://app.getquin.com/activity/NhIGEJGCTA

#learn #strategie #strategy #esel

The daily chart is currently forming a brachiosaurus, which points to a medium-term correction in the near future.

no investment advice

💸Economic data, shares and key figures💸

In many of my posts I would like to introduce you to the topics of stocks, business valuation and accounting and give you important tips and tricks. In the following post, I would like to be a little shorter and simply show you a few exciting links that generally revolve around the topic of business, shares / ratios and money. Maybe there is an exciting link for you.

𝑼𝒏𝒅𝒆𝒓𝒔𝒕𝒂𝒏𝒅𝒊𝒏𝒈 𝑴𝒐𝒏𝒆𝒚 - 𝑽𝒊𝒔𝒖𝒂𝒍𝒊𝒛𝒂𝒕𝒊𝒐𝒏𝒔:

-→In what I find to be an exciting way, topics are visualized. Topics are broadly diversified from economy, politics, crypto, jobs, monetary policy, etc..

https://howmuch.net/

Examples:

"Visualizing 20 American Cities with Economies as Big as Countries."

"Visualizing the Top Export Partners for Each U.S. State."

𝑯𝒂𝒏𝒅𝒆𝒍𝒔𝒅𝒂𝒕𝒆𝒏 𝒑𝒓𝒐 𝑳𝒂𝒏𝒅 𝒗𝒆𝒓𝒑𝒂𝒄𝒌𝒕 𝒊𝒏 𝒔𝒑𝒂𝒏𝒏𝒆𝒏𝒅𝒆𝒏 Ü𝒃𝒆𝒓𝒔𝒊𝒄𝒉𝒕𝒆𝒏:

-→"The best place to explore trade data. Visualize, understand, and interact with the latest international trade data."

https://oec.world/en

Example: https://oec.world/en/visualize/tree_map/hs92/export/col/all/show/2020/

𝑺𝒆𝒆 𝒉𝒐𝒘 𝒕𝒉𝒆 𝒃𝒆𝒔𝒕 𝒊𝒏𝒗𝒆𝒔𝒕𝒐𝒓𝒔 𝒊𝒏𝒗𝒆𝒔𝒕:

-→Overview of well-known investors, their performance and portfolio composition.

https://stockcircle.com/

𝑸𝒖𝒂𝒓𝒕𝒂𝒍𝒔𝒛𝒂𝒉𝒍𝒆𝒏:

-→Overview quarterly figures

http://cashkalender.de/calendar/2022/49/

𝑨𝒌𝒕𝒖𝒆𝒍𝒍𝒆 𝑻𝒐𝒑 𝑻𝒓𝒆𝒏𝒅𝒔 𝒖𝒏𝒅 𝑨𝒌𝒕𝒊𝒆𝒏 𝒑𝒓𝒐 𝑻𝒓𝒆𝒏𝒅:

-→Shares categorized by industry/trend. Fun to browse through.

https://www.trendlink.com/

Ü𝒃𝒆𝒓𝒔𝒊𝒄𝒉𝒕𝒆𝒏 𝒛𝒖 𝑼𝒏𝒕𝒆𝒓𝒏𝒆𝒉𝒎𝒆𝒏𝒔𝒌𝒆𝒏𝒏𝒛𝒂𝒉𝒍𝒆𝒏:

-→"When you need to go fast". The links will give you good overviews to get you started.

https://aktie.traderfox.com/

https://de.marketscreener.com/tools/stock-screener/

𝑨𝒌𝒕𝒊𝒆𝒏/𝑼𝒏𝒕𝒆𝒓𝒏𝒆𝒉𝒎𝒆𝒏 𝒗𝒆𝒓𝒈𝒍𝒆𝒊𝒄𝒉𝒆𝒏 (𝑷𝒆𝒆𝒓 𝑮𝒓𝒐𝒖𝒑 𝑽𝒆𝒓𝒈𝒍𝒆𝒊𝒄𝒉):

→Once you have an overview, it certainly makes sense to compare companies based on their metrics.

https://viz.traderfox.com/aktien-vergleiche/NL0000235190/EI/airbus-se/aktien-386536-386603-387185

𝑰𝒏𝒔𝒊𝒅𝒆𝒓𝒕𝒓𝒂𝒅𝒆𝒔:

-->Where do insider purchases take place and to what extent? Here you can find relevant data!

https://www.insiderkauf.de/overview?market=US&time=7D

https://www.boerse.de/insider-trades/

I am sure that one or the other link can provide some good contributions from the community. So have fun with it!

If you know more exciting links then just share them in the comments!

#learn

#theaccountant

Source image:

https://www.123rf.com/photo_8248959_global-economy-money-background.html

Exactly one month ago I posted that there is a great entry opportunity at $GME there. All have not taken me seriously here and made ready. Now you see that I have fished the exact bottom and have made over 32% return in a month. 🤡 You clowns all rush here on the platform against technical analysis, Gamestop and WSB.

Today I opened the app and was the first time at 50,000! Unfortunately, already a little below. Nevertheless, amazing and also a bit scary how quickly you can bring quite a nice sum of money to the stock market.

Here's to the next 50,000!

**** UPDATE ****

Dear Community, just now we have published another big update, today among other things new:

• Improved portfolio analysis incl. new categories like countries and currencies
• Long-term Dividend Forecast: Forecast your cash flows up to 40 years into the future
• Completely revised feed design in the web app
• Cost prices in the position overview in the web app
• Improved performance calculation (Performance will be updated in the next release)
• Many fixes and performance improvements

Enjoy :)

I just have to ask your opinion again, I have now invested for just under 1000€ in All-World ETF. Furthermore, I would like to save it now for at least the next 20-25 years with 100€ per month. Would you support this decision? Thumbs up 👍🏻 for yes, SOS 🆘 for no. Thanks for your opinion.

Hey, started investing, what do you guys think of my first shares? Acceptable?