2Wk·

Allow me a few questions about your portfolios 🤭

Hello everyone

Lately I've been asking myself fundamental questions about investing again and questioning my own portfolio a lot. 🤯

One of the triggers was the book "The little handbook of sensible investing

" by J. C. Boogle.

Investing is a journey, and over time not only the markets grow, but also your own insights. In this context, I have looked at some portfolios here (thanks for sharing) and worked out a few questions. With this post, I would like to explore the questions on low cost diversified ETF portfolio and successful dividend strategy.

Thank you in advance for your participation.

The Simple ETF Portfolio 🌎

Some rely on low-cost, broadly diversified ETFs as recommended by Gerd Kommer to participate in the global market returns. Some even focus on a single ETF, such as the Vanguard FTSE All-World (or this $FWRG) (-4.67%)

Meanwhile, I believe that those who consistently invest in a few or even just one ETF over the long term must be of above-average intelligence. 🤓 These people probably have an IQ of over 200 to choose such a strategy from the beginning or very early on and stick to it consistently.

To all those who invest in this way, such as @DonkeyInvestorI have the following questions:

Given the opportunities today, which probably didn't exist when you started, and considering the knowledge and experience you've gained over the years: How would you build your ETF portfolio today?
And how would you trade if you could start all over again?

Living off dividends 😎

Until now, I was firmly convinced that a growth strategy was the best choice in the long term, as companies that pay out "no" dividends reinvest their capital more efficiently and thus achieve a higher total return. Dividends seemed to me to be a "secondary" source of return compared to the potential share price growth of strong growth companies.

But recently I've seen some very successful portfolios here that rely heavily on dividend stocks, both in the form of classic dividend aristocrats and strategies that rely on a combination of growth and distributions. That got me thinking: Have I possibly had too one-sided a view? Is there perhaps a balance between growth and dividends that I haven't sufficiently considered so far? After all, my goal is to live off distributions/dividends. A very nice example @Dividendenopi. Hence my questions to you and those who specifically focus on dividends:

How would you describe your strategy and what principles have proven particularly successful for you?
What criteria do you use to select the stocks in your portfolio? Do you attach more importance to high dividend yields, dividend growth or do you have other criteria?
Which key figures are most important to you when evaluating the quality and sustainability of a dividend strategy?
How do you deal with market phases in which dividend stocks perform worse than growth stocks?
Have you made any adjustments to your strategy over the years? If so, why?
If you were to start from scratch, how would you build your portfolio and what mistakes would you avoid?

Thanks to everyone who has contributed to the discussion and have a great weekend everyone

29 Comments

Maximilian@Max095

2Wk

I am Team Dividend Growth with a fixed core of 2 ETFs and individual stocks. I also very often think about my strategy and whether I should make changes... Unfortunately. 😕 Maybe you should just be happy and follow through instead of constantly making changes and worrying too much.

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Nobody@Nobody_123

2Wk

I think you're overengineering everything a bit too much.
The best strategy is useless if you can't get through it mentally.
You just have to try things out on a small scale and find out what works best for you. Knowing full well that we all have no idea what will happen in 10 years' time.

Just spread your wings and hope for the best 😉

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Tenbagger2024@Tenbagger2024

2Wk

I think if you constantly change your strategy, you will only lose. Because if you run after a hype or trend, as a small investor you are usually far too late anyway. You often only buy expensive or before the correction. Just because Trump and his tariffs are causing uncertainty and investors are fleeing to safer dividend stocks doesn't mean that a dividend strategy will be more successful in the long term. Perhaps you should fish out the pearls right now and add these growth companies, which have been unjustifiably undercut, to your portfolio. That way, you will already have these stocks in your portfolio when the rest rediscover them. And so this time you are not running after them, but are already there. The next rally in tech and growth stocks is sure to come.
My dear Kate, be part of it.
Love from your Tenbagger 😘

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Ph1l1pp@Ph1l1pp

2Wk

I am team outperforming the S&P500 through market timing and bitcoin share and trading
40% etf, 20% btc and 40% cash currently

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Metis@Metis

2Wk

I have a similar strategy to @Max095, with a core of 3 ETFs (because each ETF pays a staggered quarterly distribution -> a distribution from one of the 3 ETFs every month) and a little equity component, because I honestly lack experience with individual stocks and sometimes have more learning effects than return effects and also want to have them.

For me personally, dividend growth is more important than the dividend yield alone. Because high dividend growth may result in lower payouts in the short term, but in the long term it ensures a significantly higher payout generation than choosing a high dividend yield, which hardly increases in the long term.
In other words, the individual dividend yield increases significantly more over time than with high-dividend stocks.

Unlike Max, however, I have no stress with my strategy, not even now when prices have been very depressed in recent weeks. 😅
However, I'm also a tough overthinker and think everything through twice and three times beforehand, and when I decide on something, it's because I'm extremely convinced of it. And then it's not so easy to shake it. 😂

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Stefan@Da_Fischi

2Wk

@Metis If dividend growth is more important to you than pure dividend yield, why did you choose the $JEGP for your portfolio?

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Metis@Metis

2Wk

@Da_Fischi It's actually a bit of an experiment, it just missed its weighting in the portfolio a bit because I adjusted the savings plans too late. 😅

Core are still the other 3.

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Stefan@Da_Fischi

2Wk

@Metis Ah ok, I'm also curious to see how it will develop.

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Kate💎 🙌.@Iwanowitsch

2Wk

@Metis Am I right in thinking that it has remained stable through the "correction" of the last few weeks?

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Metis@Metis

2Wk

@Iwanowitsch So far yes. But I still have a monthly savings plan.

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Stefan@Da_Fischi

2Wk

@Iwanowitsch This is a covered call ETF and still lost 5% in March.

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Maximilian@Max095

2Wk

@Metis I'm just like you when it comes to rethinking my decisions! I think too much about everything 😁 I'm basically happy with my strategy, I'm just worried about the poor performance of my individual stocks.

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Ronald@AlterMann

2Wk

I stubbornly pursue the dividend strategy on individual stocks.
The dividends and other money are paid monthly into savings plans for all positions. With rising dividends (due to the higher number of shares and dividend growth) and the otherwise more available money, I increase the savings plans and/or open new positions.
As a result, I have more dividends as income each quarter than in the same period of the previous year.

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Dividendenopi👴@Dividendenopi

2Wk

My dear Kate @Iwanowitsch, I hope you enjoyed the lovely weekend as much as I did. Hence the delay in my reply.

My strategy is to outperform the overnight and fixed-term deposit market with the available capital and the addition of a certain amount of risk 😇. I invest equally weighted in stable dividend stocks with an admixture of riskier "high percenters". I usually buy in three tranches until my target purchase value of 14 to 15k per share is reached and the resulting return on my invested capital corresponds to the target market size.

I attach importance to a dividend yield of at least 6% and prefer stocks that guarantee this and have a history of regular dividend increases. I accept exceptions such as one-off suspensions of the dividend, as in the case of corona or special financial years, if a reliable payout is otherwise guaranteed.

Important key figures are the cash flow and the payout ratio, but these should not be viewed in isolation.

In principle, I don't care about comparisons with the performance of my dividend stocks, even if I am naturally pleased with a better performance than the indices over a limited period of time. I have a fixed buy-in, want my dividends on it and that's that. Market phases and price fluctuations are relatively unimportant to me, as long as there are no fundamental changes to individual positions. Of course, I also find the articles here on outperformers and the immense price movements that are possible in a very short time exciting. Every now and then I can't avoid a swing trade, but otherwise I allow everyone their successes without feeling like I'm missing out. Incidentally, the worst performing stock for me is $NOVO B Novo, which also pays the lowest dividend...🤷‍♀️ So much for that as far as I'm concerned. 😂😪

I'm not going to make any major changes to my strategy. What counts for me is capital preservation with planned and realized cash flow and I'm only partly invested in shares. The much larger remainder is in areas that hardly anyone here is interested in anyway. Government bonds, corporate bonds, bonus certificates and the like. For me, certificates in particular achieve a very good return of more than 10% p.a. if I select them carefully.

If I had to start from scratch.... is not an answer for me personally. What age do you want to start at? What level of knowledge? Compared with my current strategy and possibly taking a different approach, I wouldn't do anything differently anyway, as the high price gains and potential setbacks don't appeal to me. I am old and rather passive when it comes to investing my capital.
However, I would definitely avoid chasing trends and deviating from the investment approach. It happened to me twice that my emotions got the better of me and I chased after parts of the lithium and hydrogen trends. I have withstood the seamlessly following technology trend and, more recently, the armaments trend. As far as gains are concerned, of course I could have.... But I have my dividends and everything is fine, and I'm doing just as well.

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Kate💎 🙌.@Iwanowitsch

1Wk

@Dividendenopi Dankeschön ☺️

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Harald@Madhatter5566

1Wk

Dividends are a choice. Winners usually remain winners. The same range of companies invested without dividends (then just long-term yield and growth) can also lead to a portfolio that beats the world market.

In my opinion, if you understand what you are doing, there is nothing wrong with a simple ETF portfolio or a well-chosen dividend portfolio.
If you have time, the former is the safest, but probably the most boring, the latter is probably psychologically better.
And this is where I see the sticking point, which has little to do with intelligence and more to do with perseverance. The first variant is boring. There is no tenbagger, no sudden lottery win. There's no big crash either, but people are less interested in that.

As I don't need dividends at the moment (otherwise I could simply reduce my savings rate), I'm more of a boredom team, although I hold significantly more commodities than ETFs.

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Kate💎 🙌.@Iwanowitsch

1Wk

@Madhatter5566 Which commodities do you hold?

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Harald@Madhatter5566

1Wk

@Iwanowitsch Gold and silver.

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Epi@Epi

2Wk

I am basically from the ETF faction.
But B&H WeltETF is not for me because of the high max drawdown and the resulting high risk of subsequent returns, the low safe withdrawal rate, the high savings capital required and the ultimately late retirement age.
But I also don't have an IQ of 200.😅

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CashBurner 🔥@DonkeyInvestor

2Wk

1) My IQ is 322
2) Of course, if I were to rebuild my portfolio from scratch today, it would look exactly as it does today. If you come to new conclusions, you have to adjust your strategy and portfolio accordingly. See #fehlkauf

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Patrick@Pazi3

2Wk

@DonkeyInvestor 240 would have been enough to get the highest IQ (so far).

Yaaaaa.... I just googled this. *don't look at me so surprised!

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CashBurner 🔥@DonkeyInvestor

2Wk

@Pazi3 but then it wouldn't be my IQ

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Uwe@SchlaubiSchlumpf

2Wk

Not a dividend disciple. However, I would give the basic advice to do some groundwork. Historical data is usually available, especially for overarching strategies. Dividends per se are not bad, but suboptimal from a tax perspective in the savings phase if you are above the tax-free amount. And often even before that because of withholding tax.

With ETFs, you could use an accumulator. Then simply sell proportionately when withdrawing. Dividend accumulators are of course nonsense. It might help to ask yourself why you want dividend stocks. Often these are simply value stocks that you could pick up with value ETFs.

If you find dividend growth interesting, but don't buy individual stocks and don't really like distributions, the quality factor could be something for you.

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HB@DKHBMD

2Wk

I then asked myself similar questions and would like to find out more.

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Stulle 🥪@Stullen-Portfolio

2Wk

The return advantages of the accumulator compared to the distributor have decreased but are still there.

A.
When interest rates are low, the up-front tax for the accumulator is zero; tax is due on the distributed dividends.

B.
If there is no price appreciation in a year, there is no advance tax for the accumulator; tax is due on the dividends distributed.

You can actually find all the other information you need here (and it's attractively presented), dear Kate @Iwanowitsch.

https://hartmutwalz.de/vorabpauschale/

As you know, I am absolutely convinced of ETFs, and as you can see, only accumulators are included in the Stullen portfolio. ✌️

No doubts.
No change of strategy.
100% satisfaction.
...that is sooo cool.

Greetings
🥪

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Cashflow G.@CashflowG

1Wk

I'm not a professional, more of a "learning by doing type" and have tried many things successfully and for me the most efficient approach is: Savings plans on dividend stocks. My portfolio currently consists of 70% dividend stocks / ETFs (10%). 30% growth stocks (mainly tech stocks) and crypto

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Thewolfofxetra@thewolfofxetra

1Wk

Hello @Iwanowitsch I can really recommend Maximilian Gamperling's coaching. It's best to watch a few of his YouTube videos - you'll quickly get a feel for how he works and what you can expect. I myself was at a very similar point to you last November and had similar questions. Through coaching, I have now received clear, well-founded answers - based on tried and tested knowledge and practical experience. Sometimes it's worth spending some money and taking a shortcut with an expert. For me, this was exactly the right way to go.

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Kate💎 🙌.@Iwanowitsch

1Wk

@thewolfofxetra What were your most striking changes at the depot after the coaching? And what was the most important learning for you?

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Thewolfofxetra@thewolfofxetra

1Wk

@Iwanowitsch I would like to illustrate this figuratively: It's as if an average gym-goer suddenly started preparing for a professional competition. Since the coaching, I have a clear strategy, can evaluate shares on the basis of fundamental data and chart analysis and use active risk management.

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