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Top, thank you. Very well explained!
I wonder what concrete influence the knowledge about IZF and TTWRR can have on my future strategy. 🤔
I wonder what concrete influence the knowledge about IZF and TTWRR can have on my future strategy. 🤔
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@Epi Let's assume that the efficiency value or delta value is next to the share. You could draw a direct conclusion from this as to whether an investment is (still) worthwhile at a given time. For example, I have Petroleo shares that currently have negative annual growth (aka loss to buy in), but tend to have a good total return due to stable dividend payments and, very importantly, no withholding taxes. The specific buying behavior is evaluated, not the internal company value or the future development of a share.
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@Epi At least if the IZF/TTWROR ratio is not right, you know that the strategy did not fit in the past.
A savings plan for 8 years on one world is definitely not a good approach according to the ratios mentioned above :)
A savings plan for 8 years on one world is definitely not a good approach according to the ratios mentioned above :)
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@Qheherain Okay, and would I then know whether to buy or sell the Petroleo shares?
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•@Epi Well. To cut a long story short: IZF/TTWROR is the little man's cock comparison.
The ratio shows me my past performance. Great!
But isn't it said in the stock market environment that you shouldn't look in the rear-view mirror?
The ratio shows me my past performance. Great!
But isn't it said in the stock market environment that you shouldn't look in the rear-view mirror?
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•@Epi If you are referring to short-term actions in the sense of trading - then no. It can only calculate retroactively or currently. BUT: you could build a tool that shows the potential optimization for a subsequent purchase at a more favorable time. a rebalancing logic is created. If the TTWROR is high, but the timing difference is negative, then it may not be worth buying more. This would actually be an active display - if you potentially want to buy more. It could be that buying too many cheap shares below the previous buy in does not improve the overall value. I am assuming the goal of a medium-term (at least 1 year) or long-term holding of a share.
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@Qheherain But the assumption with such retrospective rebalancings is that the return path remains constant, right?
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