9Mon·

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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

9Mon

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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Epi@Epi

9Mon

@Renditedichter Thank you for the detailed answer! It shows very nicely that most people here are probably not concerned with returns at all.

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Sponge💰@spongeboy

9Mon

@Epi almost like a ki generated text, but nice that he described it in such detail

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Epi@Epi

9Mon

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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Kevin E.@KevinE

9Mon

@Epi I don't think the article is fundamentally wrong. However, the first point mentioned is already a massive one: "Volatility is not taken into account", i.e. risk-adjusted returns do not play a role.

Low(er) volatility is one of the most important factors, especially in the savings phase.

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Kevin E.@KevinE

9Mon

@Epi sorry, you've actually already said everything there is to say in your other comment. I fully agree!

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Epi@Epi

9Mon

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

9Mon

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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Sponge💰@spongeboy

9Mon

@Metis "You" all don't really realize that you can't do it, because you always see people posting their stocks and writing that they want to try to beat the market or think so.

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Sponge💰@spongeboy

9Mon

@Metis and what makes you think that I have a fundamental assumption that everyone is trying to beat the market in the long term. If you read through my post, it expresses a completely different thing

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Metis@Metis

9Mon

@spongeboy Well. Of course there are those who try and say so clearly. But there are enough people whose goal is not that and who don't write it anywhere.

And yet, between the lines, that's exactly what you're saying. That "everyone" would try to do that.

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Paketknecht@Paketknecht

9Mon

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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Sponge💰@spongeboy

9Mon

@Paketknecht That's a good answer to my question, do you also think that when a stock is well up that people realize their profit too "quickly" and find it hard to let the position run?

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Paketknecht@Paketknecht

9Mon

@spongeboy Yes, good shares are not held long enough and good shares are bought expensively and sold cheaply because people have no patience, but this also affects professionals who simply have to deliver a return.

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Ronald@AlterMann

9Mon

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

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Sponge💰@spongeboy

9Mon

@AlterMann $CSPX $IWDA $VWRL $SPYI

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Ronald@AlterMann

9Mon

@spongeboy What should I do with it?

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