9Mon·

Overthinking ETF / individual shares / core satellite?

Hello everyone,

This topic has probably been discussed before and I'm sure many people feel the same way as I do.

I'm currently thinking a lot about whether it's wise to switch my individual share strategy to an ETF strategy after all. As the father of 3 children, it's certainly more relaxed.

Basically, I really enjoy individual shares. I'm also very fond of dividends and love lots of paydays.

However, I don't have a clear strategy on how best to invest my monthly savings installment of 1500 euros.

Sometimes I invest here, sometimes there. I have savings plans for the very small shares in my portfolio so that the weighting fits again.

There are so many things I can get excited about. Currently BDCs. But I also think the Fidelity ETF is a great dividend solution, for example.

What also stops me from selling everything are the taxes on unrealized gains. I've grown particularly fond of my Apple position. But it actually takes up too much of my portfolio.

How do you deal with the issue of "overthinking" and have you found a solution?

Kind regards

Marc

31 Comments

9Mon

I have the same thoughts. I am pursuing a dividend strategy but am considering switching at least to the distributing FTSE All World (so far three distributing ETFs with lower yields) and putting at least the entire savings installment into the FTSE All World Dist in future and staying away from individual shares.

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tommycash@tommycash

9Mon

@Marty0292 I did it this way and am happy with it ✌️

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Trade4future@Trade4future

9Mon

@Marty0292

@Bexi You have built up a nice portfolio 👍🏼

Personally, I've been shifting/saving into dividend ETFs for about a year now. In the long term, I'm aiming for a half/half weighting. Accumulating ETFs are also being added and will be further expanded.

The reasons for this were on the one hand
1 Saving time: with shares, you have to follow the performance of the company/figures regularly. The last crises have shown that even large companies can get into difficulties. With a large number of stocks in the portfolio, ETFs are more relaxed.😊
2 Taxes: Due to the partial exemption of 30% and treatment of withholding tax (if you take the right ETFs/ fund domicile), more or just as much is left over as with US dividend payers.😉

In principle, I have also diversified my ETFs more broadly and have several in my portfolio. Of course, this is not absolutely necessary, because an admixture of a few ETFs would be enough. However, I am invested for the long term and therefore additionally diversify across issuers, composition and weighting of country classes, top shares and co.

I think it's important to have a strategy yourself and to implement it 😉.

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Julian@MoneyISnotREAL

9Mon

Although I don't have 3 children myself, I have now opted for an ETF strategy and am sticking to it.
But even with the ETF strategy, there are countless ways to "find your way".
I realize that I am fascinated by the topic of finance and securities, but just because I end up saving in ETFs doesn't mean that I don't inform myself.
I just have the advantage that if I don't have time for it, it doesn't matter. 😏

To your point about profits. If this is correct, then you have a loss pot of around € -15,000, which means you can offset some of the gains. Furthermore, some positions are "in the red", i.e. if you want to move away from individual stocks as you write, you can offset this with gains.

With the Apple position - depending on which ETF(s) you choose, you can certainly reduce it.

I myself (as written) have opted for ETFs, but keep some individual stocks as a supplement (which are only slightly or not at all represented in the world ETF, for example). In other words, a core-satellite strategy.
I have not yet reached my goal - it will take a few more years.

This means you can also approach the restructuring of individual stocks in stages. Some companies are "long runners", so you don't have to worry about them. Others, on the other hand, do.

Before you restructure, think about a plan, a target composition, choose the ETFs carefully and once you have that, start the process step by step.
So don't do it first and then think about it.

Good luck!

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Ph1l1pp@Ph1l1pp

9Mon

Wow, an amazing portfolio!
But I think with an 8% annual return, you can also go into an ACWI + possibly include a nasdaq/ S&P500 depending on your risk tolerance
(my unqualified opinion)

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beardonfire@beardonfire

9Mon

Firstly I would like to congratulate you on making such a nice portfolio already! What would I do I just leave all the positions and start investing into ETF now without selling any of the stock or making only small adjustments and let them compound.

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Kevin E.@KevinE

9Mon

I have to say, especially with Apple, I would think about a partial sale. >10% of the portfolio, little cash flow would at least not be my thing. Unfortunately, you will have to pay taxes at some point anyway. With a 300% return, it's even more than with 200. I think time is essential with 3 kids. Every single share less saves you some work with the portfolio.

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Kevin E.@KevinE

9Mon

@KevinC without having checked against it, I also fear that broad ETFs would have performed better than your total of individual stocks. I think a certain amount of consolidation wouldn't do any harm. Core satellites as you suggested would be an idea in this respect.

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Horsti@Horstiiii

9Mon

Your portfolio reminds me of mine... I also have a lot of dividend stocks and now invest in ETFs... There are already plenty of dividends at the moment... Even though I only have 2 children, it's more relaxed for me this way...
Your Apple is my alliance...

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Hodlinvestor@Hodlinvestor

9Mon

I would not sell.
I think the positions are good.
If it was too stressful for me, I would just invest in etfs, but not sell the individual positions.
You've actually put together your own etf 😀
With the exception of your top two, you haven't made that much income. So the taxes remain manageable.
And you may have something to offset against tax in the year of the sale!
...
Personal circumstances require personal decisions 😁.

Otherwise, a nice portfolio

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Leo@wealth_maximizer_149

9Mon

I would reduce the portfolio, sell all small positions. It also makes no sense to have 2 individual stocks from the same sector, e.g. either Verizon or Telekom, but I don't think both make sense.

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JJ-Invest@JJJanson

9Mon

@wealth_maximizer_149 I see it the same way. The "small" positions of less than 3k only inflate the portfolio and you have to take care of them. It's somehow also a commitment to yourself that you don't believe in these stocks so much or underestimate them so much that you can go straight into an ETF

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LDA@LDA

9Mon

I had the same thought and am now rebuilding my portfolio piece by piece. Target: 50% Nasdaq100, 25% China, 15% India, 10% Brazil. So 50% USA and 50% BRICS. My BRICS positions are positioned so far and when I get rid of individual stocks I sell them in favor of the Nasdaq100.

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Maximilian@Max095

9Mon

Nice portfolio! How much dividend do you get from it? Why don't you weight the Global Quality Income higher?

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Marc Bex@Bexi

9Mon

@Max095 Just over 6000 net. I'll probably do that. 👍🏼

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Tomi💰Dividend 🇪🇺@EinhornDividend

9Mon

Showcase depot, keep it up and soon you'll be a Milioner 👍

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Thoranos@Thoranos

9Mon

A very nice, solid portfolio. You basically have a lot of quality stocks and therefore it makes little sense to switch to ETFs in my opinion. If you think your companies won't go bust, then keep it up. I would start applying the savings rate only to stocks with a minus, so that they soon run into the green. Good luck!

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Carles@Carles

9Mon

I agree $AAPL is too big and too risky at this point, if you don’t want to pay taxes, just sell off your losing positions with a part of $AAPL winning one… doing that at least you can descrease $AAPL in about 6k without paying…

In a couple of months (or the period of time that your country considers to let you write off the loses with the gains), if you still want to be in the actual losing ones for the long therm, you buy them again.

I don’t follow this companies closely but seems like 2 months are not going to impact a lot the price of them.

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Gu Bang@AK_LS

9Mon

Great portfolio 🤩. How long have you been in the stock market? How high is your monthly savings rate?

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Marc Bex@Bexi

9Mon

@AK_LS Started around 2018 and averaging around 2000euros a month. Thank you 🙏

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Dividendensammler@DividendensammIer

9Mon

Looks great, I would just keep going. If you want, you can set up another portfolio where you buy 500€ etf every month. And then continue to build up your dividend portfolio.

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PietAT@Petzi-Port

9Mon

First of all, a strong deposit!

I see a lot of dividend fans commenting here, which dividend ETFS do you invest in? Or do you invest in a World distributing?

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Maximilian@Max095

9Mon

@Petzi-Port I invest in the Global Quality Income and in dividend growth stocks

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Max@Max___Power

9Mon

A completely different approach to tax savings:
Assuming that your motivation is (also) to leave something to your children, you could start by transferring parts of your portfolio to them. If you're alone in the portfolio, you have an allowance of 200k/child over ten years. This way, you're already playing a trick on the tax authorities now when it comes to the end, hopefully not for many decades (and the value of the custody account will most likely have exceeded the tax-free amount). One possible disadvantage, of course, is that you will no longer have any control over it after your offspring's 18th birthday.

Just my two cents.

BG

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JT97@JT97

9Mon

Literally this past week, I sold out of all individual positions and exclusively opened positions in yielding ETF’s. With a baby on the way, I wouldn’t have had the time and attention to screen individual stocks anymore. I wanted to drip feed into these ETF’s each month, set and forget approach. It’s actually really freeing.

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Samuel We@Sammmy

9Mon

Hi.
Just think about a fixed savings rate for ETFs and individual stocks (e.g. 50% each). Then you can let off steam with the individual stocks and have a sufficiently large position with the ETFs, which should take vola out of the overall portfolio.

MFG
Sam

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RM@Dividendenhunter_RM

9Mon

What do you do for a living, if you don't mind me asking?

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Hugo S.@hsalva23

9Mon

important sharing! Amazing Portfolio.
Ever since I became a father, I also feel the need to sell and always make some gains, especially because besides the low-paying job, I no longer have any sources of income. What are your expectations for yours BMY in 2024/25?

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KALLE@Sasiiio

9Mon

You can take a look at "Cardno" if you like Divi 👌🏽

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userb48becaf10324a0e@userb48becaf10324a0e

9Mon

Nice portfolio, I wouldn't liquidate it. Mine is similar. If you don't have any time at all in the near future, then keep saving in etf. But that doesn't make much sense, because then there will be too much overlap with your current portfolio. If you still have some time and the desire, then rebuild something according to the core/satellite principle, but only with shares. That's what I'm doing at the moment. Core: Low volatility / stable business model / moat. My core: Allianz, Apple, Bank of America, Enbridge, Pembina Pipeline, Coca Cola, Pepsico, Johnson + Johnson, Procter Gamble, Microsoft, Realty, WP Carey. The satellites such as pharma, retail, wholesale, tech, chemicals etc. you build around them. I also have a few etfs in my 60 positions, I just leave them or sell one if necessary. Your portfolio has a very good basis for core/satellite.

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Tom@Fluglotse

9Mon

Your custody account is basically your ETF.

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