1Yr·

Hello everyone,

after many interesting portfolios and investment strategies, I would like to share and briefly explain my portfolio.

I am 22 and started investing in ETFs in 2022. About 50% $IWDA (-0.23%) , 20% $EIMI (-0.1%) , 20% $EXSA (-0.35%) and approx. 10% $WSML (-0.43%) to diversify as much as possible.

My aim is to achieve a constant savings rate of around EUR 400,000 over the years and then to switch to a dividend portfolio.

However, since individual stocks such as Amazon, NVIDIA, Microsoft and others (primarily the Big7) have been outperforming the msci World on average for years, I have recently bought significantly more individual stocks and neglected the ETFs. As far as the investment period for individual stocks is concerned, I assume a period of 5-10 years. $MSFT (-0.62%) can probably be held for a similar length of time to ETFs. I don't want any more positions at the moment. I divide my savings rate of around €700 relatively evenly between all positions.

That's it :) I look forward to constructive feedback.

14 Comments

1Yr

Let's assume you need 21 years for the €400,000 (adjusted for inflation, i.e. today's purchasing power) (€14k starting capital; €700 savings rate, 6% inflation-adjusted return).

Then you will have paid in around €190k and made a profit of €210k. You pay tax on this profit at 26.375% withholding tax -> you then pay €55,300 in taxes. You can then only invest €345,000 in dividend-bearing securities.

In almost all scenarios in which you are not investing for tens of generations after you, it makes more sense to either a) make partial sales in the case of accumulation or b) go directly into dividends (growth).

Combining the two is not the best solution

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Joris@Joris

1Yr

@KevinC Why is combining the two not the optimal solution? So either only dividend growth or therausierend?

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Kevin E.@KevinE

1Yr

@Joris Sure, you can also take the accumulating ones and dividend growth. But it doesn't make much sense to do it one after the other. Of course you can (e.g.) save the $VWCE and $PG. The ETF can then be de-accumulated and the share can pay dividends.

It just doesn't make sense from a tax perspective to first retain everything for 30 years, then completely dissolve/tax it and then put it back into (e.g.) $PG.

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Marvin@Diamondhandzz

1Yr

@KevinC Perhaps a stupid question, but let's assume I have €400,000. Why would I then have to pay €55,300 in tax before I switch to dividend shares? As long as I don't pay out anything to my current account, the profits have not yet been realized.

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Kevin E.@KevinE

1Yr

@Diamondhandzz Let's assume that the value of your €400,000 custody account is such that you have invested €200,000 and €200,000 are capital gains. If you materialize these gains = sell your shares, taxes will be due on the €200,000 gains (25% plus solidarity surcharge = 26.375%).

You cannot simply "swap" the accumulating units (e.g. $VWCE ) for a distributing ETF (e.g. $VWRL ).

With the €200,000 profit share, you would therefore have to pay €200,000*0.26375 = €52,750 in taxes. Actually. In the case of ETFs and funds with an equity component >51%, the partial exemption applies, whereby 30% of the gains are not taken into account.
The calculation would therefore be: (200,000*0.7)*0.26375= €36,925 tax. You can reinvest the rest (400,000 - 36,925 = 363,075€), buy an apartment or a sports car or whatever you want. The state always wants its share of the cake.

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Marvin@Diamondhandzz

1Yr

@KevinC perfect! Thanks for the detailed explanation. I think I will save in accumulating etfs and then have them paid out.

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Joris@Joris

1Yr

@KevinC ok then I misunderstood. So now I thought theausierend and dividend growth together does not make any, but of course it makes no sense to put the capital in div growth in 30 years.

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Aktienmasseur@Aktienmasseur

1Yr

https://getqu.in/Of8gdq/ https://getqu.in/Of8gdq/

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Epi@Epi

1Yr

You want to "diversify as much as possible" - and yet you only invest in a single asset class that is also highly correlated? How does that fit?

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Marvin@Diamondhandzz

1Yr

@Epi diversifying with the etfs was the original idea. However, as US tech stocks have exploded in recent years, I have invested significantly more in them in the hope that they will outperform the msci world over the next 5-10 years. The fact that the shares correlate with each other was really not very clever of me. But I still think that the risk is still limited.

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Epi@Epi

1Yr

@Diamondhandzz Well, the long-term statistics on mean reversion, valuation levels, debt ratio, equity ratio etc. are all going against you and your strategy.
But as we all know, hope dies last. 🤷

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Marvin@Diamondhandzz

1Yr

@Epi So you think it would be better if I switched my entire portfolio into etfs? Along the lines of what I wrote at the beginning?

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Epi@Epi

1Yr

@[Diamondhandzz](Diamondhandzz) I think it would be better to diversify the portfolio as much as possible if you want to diversify it as much as possible.
At the moment I would give the diversification maybe 3/10 because you have diversified to some extent within the stocks (the individual stocks of course reduce the diversification significantly again), but not between the asset classes.
With the proposed reallocation you will bring the portfolio to 4/10, max. 5/10.

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K@TechNav

1Yr

Unfortunately, you have missed out on a lot of performance since last year. Even YTD you are below 10%, which you would have achieved if you had only invested in the S&P500🥲.

For me, European investments are a no-go because of the poor performance.

With the 50% MSCI World you can wait a little for the 400k and be patient.

If you like the tech sector, I would invest 20-40% per month there.

Honestly:

IWDA, EIMI, EXSA, WSML-> $CSPX
Individual stocks -> $WITS

I know there is almost only USA in this plan,
but... If you had written Google's entire business model on a piece of paper 20 years ago and asked for an investment loan in every European bank, there would still be no Google today.

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