What do you mean by "clean concept"?
You are focusing 100% on B&H shares. No diversification across asset classes or strategies. That increases volatility. If you've only been in the portfolio since 2021, you've never experienced a deep bear market. This means your portfolio contains a high psychological risk. This can cost you 5-10% pa in the long term.
You are focusing 100% on B&H shares. No diversification across asset classes or strategies. That increases volatility. If you've only been in the portfolio since 2021, you've never experienced a deep bear market. This means your portfolio contains a high psychological risk. This can cost you 5-10% pa in the long term.
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By a clean concept I mean that I execute the savings plans with fixed percentage values and rebalance 1-2 times a year.
Do you mean that I should also invest in other asset classes? E.g. commodities or bonds?
Do you mean that I should also invest in other asset classes? E.g. commodities or bonds?
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@Sven235 This would reduce the vola, but also lower the return. At least if you want to invest for decades to come.
What is the goal (in figures)?
Cash flow x? Assets y? What horizon? And then, of course, there is what Epi says: how well can you cope with vola?
What is the goal (in figures)?
Cash flow x? Assets y? What horizon? And then, of course, there is what Epi says: how well can you cope with vola?
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•@Sven235 Okay, that's what you mean. I would have expected a clear, logical derivation of the asset allocation and the trading strategy from your goal, your situation and your knowledge, including backtests. Have you considered the dynamic return sequence risk? Sounds nerdy, but in the end it makes up 50% of your pension.
It also depends on whether other asset classes make sense for you.
Your allocation is just like a VW Golf. Somehow you'll get there, and better than with a bicycle (daily allowance), but it's never really optimal. It's too staid to pick up women, too small for a family, too low for a pensioner, etc.
Most people here try to pimp their Golf somehow (Core Satellite) instead of looking for a car that suits their situation.
It also depends on whether other asset classes make sense for you.
Your allocation is just like a VW Golf. Somehow you'll get there, and better than with a bicycle (daily allowance), but it's never really optimal. It's too staid to pick up women, too small for a family, too low for a pensioner, etc.
Most people here try to pimp their Golf somehow (Core Satellite) instead of looking for a car that suits their situation.
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@Epi In the past, a tuned Golf II was still good enough for towing. At least for a certain clientele ;-)
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•My goal is to retire as early as possible.
In other words, to break the million mark in 20 years.
At 6% p.a. over 20 years with 1000 per month possible.
I invest around €1000-1500 per month.
In other words, to break the million mark in 20 years.
At 6% p.a. over 20 years with 1000 per month possible.
I invest around €1000-1500 per month.
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More risk would be conceivable for a portion of the money or for future deposits.
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@Epi How do you value shares and when do you buy them?
Or how do you pimp your Golf? 😁
Or how do you pimp your Golf? 😁
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@KevinE Other asset classes do not always reduce vola and returns. BTC or 2x leveraged gold ETCs can reduce vola and increase returns at the same time. This is certainly not everyone's cup of tea, but you should be aware of these possibilities.
Unfortunately, the argument often goes like this:
-I have 100% ACWI + equities, what can I improve?
-Add gold, that lowers the vola.
-Oh no, I don't care about vola!
-Then mix in BTC, that increases the return.
-Oh no, I wouldn't feel comfortable with that.
-Why not?
-Vola too high.
😅
Unfortunately, the argument often goes like this:
-I have 100% ACWI + equities, what can I improve?
-Add gold, that lowers the vola.
-Oh no, I don't care about vola!
-Then mix in BTC, that increases the return.
-Oh no, I wouldn't feel comfortable with that.
-Why not?
-Vola too high.
😅
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•@Sven235 How do you want to retire with 6%pa and 1 million? Have you thought this through or just quoted pretty figures?
6%pa at 1million makes 60k pa, i.e. 5k pM, minus taxes you get 4k pM net. With a savings rate of 1.5k, this corresponds to 5.5k pM net current income. So either you are currently saving far too little or far too much, or your calculation is wrong.
By the way, if your target return is only 6%pa, you have a lot of leeway to smooth the return curve. Google Meb Faber GAA.
6%pa at 1million makes 60k pa, i.e. 5k pM, minus taxes you get 4k pM net. With a savings rate of 1.5k, this corresponds to 5.5k pM net current income. So either you are currently saving far too little or far too much, or your calculation is wrong.
By the way, if your target return is only 6%pa, you have a lot of leeway to smooth the return curve. Google Meb Faber GAA.
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@Epi by less vola I was referring to the asset classes "commodities" and "bonds" mentioned by TE.
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