Sponge💰 (@spongeboy) on getquin

Sponge💰

@spongeboy

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Why do so many people want to include stocks in their portfolio when only 11% beat the market in the long term?

🧽

8% luck

3% can

What makes you pick up shares, is it the dividend? Do you like a share/company or do you hope to outperform?

https://geldfakten.com/aktiv-investieren-und-den-markt-schlagen/#:~:text=Nach%252020%2520Jahren%2520sind%2520es,8%2525%2520eher%2520%E2%80%9EGl%C3%BCck%E2%80%9C.

geldfakten.comDen Markt schlagen durch aktives Investieren?

17 Comments

Kolibri@Renditedichter

I am a human being and therefore consist of a rational and an emotional part. My rational part has decided to invest 80% in ETFs. My emotional 20% in crypto, shares and bonds. For me as a beginner, it is simply interesting to see how the different assets work and react to changes. At the same time, it gives me emotional satisfaction when I have an asset that flies to the moon and I can be happy about it with others. And if it goes the other way, then I'm happy that I've only invested so little. Only etf would simply be too boring for me. And it offers me too few points of contact to engage with companies, countries or projects in a sustainable way. The stock market also gives you an insight into the state of other systems. Because the value of the assets is not one-dimensionally dependent on the economy, but is multi-dimensionally linked to everything. That's why the Etf only shows me how things are going globally as a whole, but the individual assets show me how things are currently going in certain countries, sectors, industries, companies, commodities, etc. This gives me incentives to invest. This gives me an incentive to take a closer look and gives me a better overall overview of what is happening in the world.

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Rmann@Epi

I suspect that all the share satellites here are primarily about the feeling of self-efficacy. You want to be able to say: I'm brilliant. This is also possible with broad market ETFs, but it is more difficult.

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Rmann@Epi

I have read through the linked article. The basic statement may be somewhat true, but the way it gets there is somehow dubious and a little too deliberate.
To equate the private investor who wants to beat the broad market with shares with a wikifolio investor, for whom a flat rate of 1.5%pa costs are deducted from the return, is quite daring. The fact that most wikifolios deliberately invest riskily in order to generate excess returns does not apply to the usual equity satellite saver either.
In addition, the period chosen, starting in 2010, is not very meaningful. After all, it is well known that market-wide ETFs are hard to beat in bull markets. These statistics would be interesting for the 10 years before that. This is because active strategies clearly outperformed.
And taking the return as the sole indicator for beating the market unfortunately shows little financial knowledge. Anyone who underperforms the market return by 0.5%, but has only 1/4 of the fluctuations, also beats the market.

In short: the article belongs more in the category of Pippi Longstocking "I make the world as I like it". 😁

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Metis@Metis

Why the fundamental assumption that private investors who play with equities or other assets in addition to their ETFs absolutely want to beat the market in the long term?

We are all very well aware that statistically we will not be able to do this, especially not for decades.

The highest possible return is not the only reason for investing in various assets. @Renditedichter has actually summarized it very nicely, with various reasons that also apply to me.

In addition to my really very personal urge of non-rational curiosity and the "want to play" instinct.

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Paketknecht@Paketknecht

40% individual shares, because I believe that you can beat the market with a portfolio of good companies if you buy and hold their shares stubbornly over the long term and reinvest the dividends. Unfortunately, I think most people don't do that and trade too much, don't let good shares run and that's why many private investors end up with such poor results. See also the average holding period of a share, which is currently a few months.

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Ronald@AlterMann

What is the "market" made of if it is apparently almost always better?

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