A little Sunday reading

Hello my dears,

Portfolios are often presented in our community. And I often read a little dissatisfaction with my own portfolio.

Personally, I always find it a bit difficult to assess a portfolio in the comments in just a few sentences.

My dears, the stock market is not that easy to describe in just a few sentences.

There is no one ideal and perfect portfolio.

Buffet, for example, pursued a completely different strategy to his friend Bill Gates or Cathie Wood.

And Charlie Munger also changed his investment style once again, moving away from value.

In my opinion, the easiest way, and perhaps the best way, to invest is to pick about 3 well-selected stocks. By adding about 3 well-selected ETFs to my portfolio.

As described below, and as the majority of you here are doing.

Nevertheless, I still see questions about ETF portfolios.

Perhaps the ETF specialists should create 2-3 sample portfolios with what they think are the ideal or best ETF portfolios. ideal or best ETF portfolio.

This would give the community an orientation guide as far as ETFs are concerned.

Of course, it becomes much more difficult when individual stocks come into play.

Here, the most popular strategy is the

CORE SATELITE strategy

Described below.

Equally difficult, but also time-consuming, is a strategy with

100% shares, which I also pursue myself.

I use this strategy myself because I enjoy it and it has become a hobby of mine.

After trying it out a few times, I'm slowly realizing that it's even possible to outperform the market. But that's a big challenge. And will remain so for me in the long term.

I would really only recommend both strategies. If you have a certain basic knowledge of the fundamental key figures of companies and shares. Because before buying, I recommend absolutelyto analyze the company in detail. There has @Liebesspieler has already posted a lot about this.

Not analyzing companies and thus buying blindly has been one of my biggest mistakes in the past.

In some portfolios, I often don't understand why this or that company was selected. It's often turnaround dreams or the belief that you've made a good bargain after all.

At first glance, I also recognize a large cluster risk in many portfolios.

Because the tech sector or commodities are doing so well at the moment.

Or the 100% crypto investors who were still constantly posting their portfolios in 2023 have suddenly all disappeared.

My dears, you can see. Stock market can become a doctor's job, and you expect us to judge your portfolios in the comments in a short time. Often without even knowing your strategy or your assumptions.

I often have the feeling that some people have no strategy at all and only buy the stocks that have a good story and are hyped.

This can also work for a while.

That's why I went to work today with the help of Mr. Prompt's girlfriend. @Raketentoni to get to work.

My friend AI is now writing here, and I will explain my strategy in part.

A solid equity portfolio is created when goals, risk profile, diversification and a clear process come together. come together. The most important building blocks can be structured well - and you can then adapt them to your personal strategy.

🎯 Set investment goals and framework

Before you buy a single share, determine the guidelines for your portfolio. It is clear from the sources that goals and risk tolerance are the basis of every strategy .

• Purpose - Wealth accumulation, retirement provision, financial freedom, dividends, growth.
• Time horizon - Short-term (0-3 years), medium-term (3-10 years), long-term (10+ years).
• Risk tolerance - How strong can price fluctuations be without making you nervous?

These factors will later determine your asset allocation.

🧱 Foundation: asset allocation & diversification

All reputable guides emphasize this: Don't put all your eggs in one basket . Diversification is the strongest free risk buffer.

Important dimensions of diversification

• Regions - USA, Europe, emerging markets.
• Sectors - Tech, industry, healthcare, finance, commodities, etc.
• Company sizes - Large caps, mid caps, small caps.
• Styles - Growth vs. value.
• Asset classes - Equities, bonds, commodities, cash (depending on risk profile).
• A well-diversified portfolio reduces risk and stabilizes returns in the long term

🧭 Step-by-step guide to the portfolio

The sources describe similar processes - here is the essence of them:

1) Define goals & risk

→ Determine your equity allocation and style (conservative, balanced, growth-oriented).

2) Determine suitable asset allocation

→ Example:

• Conservative: 40-60 % equities
• Balanced: 60-80 % equities
• Growth-oriented: 80-100 % equities

3) Diversified investment

→ A mix of ETFs and individual shares is possible. → ETFs form the basis, individual shares are satellites.

4) Build a portfolio

→ Monthly savings plans, clear purchase criteria, no hectic trades.

(here I make individual purchases where I see potential or I want to increase the position size. But savings plans are also a good method)

5) Rebalance regularly

→ Check once a year whether the original weighting is still correct. → Rebalancing is a central component of professional portfolios

(Here I also let the racehorses run, my largest position is Nvidia and accounts for 6.5%)

📊 ETF vs. individual share strategy

Both ways have their place - the mix depends on your time, experience and interest.

ETFs (basic)

• Broad diversification immediately
• Low costs
• Little time required
• Ideal for long-term wealth accumulation

Individual shares (satellites)

• Chance of outperformance
• Higher volatility
• Requires analysis & discipline
• Well suited if you have a better understanding of certain sectors or companies

🧩 Example portfolios (simplified models)

Beginner - world portfolio (ETF-only)

• 70 % MSCI World
• 20 % MSCI Emerging Markets
• 10 % Europe/Small Caps

Advanced - Core/Satellite

• 60 % global ETFs
• 20 % thematic ETFs (tech, healthcare, quality)
• 20 % selected individual stocks

Ambitious - stock picker

• 40 % basic ETFs
• 60% individual stocks (10-20 stocks, broadly diversified by sector & region)

🧠 Non-obvious insights (which are often overlooked)

• Risk profile ≠ Courage - It's about how you react emotionally to losses.
• Diversification is not an end in itself - 100 shares from the same sector is not diversification.
• Rebalancing increases returns in the long termbecause you systematically reduce highly valued positions and add to cheaper ones.
• Cash is a position - Liquidity gives you flexibility for opportunities.
• Taxes & fees influence the net return more than many believe.

Diversification of a 100% equity portfolio, such as the Tennbagger 2024 portfolio.

A 100% equity portfolio can be very robustly diversified if you diversify broadly across regions, sectors, company sizes and investment styles. The core idea is to avoid cluster risks without diluting the return opportunities of a pure equity portfolio. The most important dimensions are highlighted in several sources: broad diversification across regions, sectors and investment styles reduces risks and stabilizes returns in the long term

🌍 Regional diversification

Regions react differently to interest rates, the economy and politics. Global diversification reduces the risk of a single economic region dominating your portfolio.

• USA - Innovation leader, high tech share, strong profitability.
• Europe - Industry-heavy, value-heavy, more stable dividends.
• Emerging markets - Higher growth, higher volatility, different economic cycles.
• Japan & Pacific - Different valuation levels, different currency dynamics.

A global mix is a key component of risk diversification

Tenbagger 2024 DEPOT:

• 100 % equities

Countries:

• USA 50.9 %
• Germany 13.94 %
• Canada 8.48 %
• Japan 7.32 %
• Korea 2.89 %
• Israel 2.79 %
• France 2.6
• Norway 2.53 %
• Italy 1.86 %
• Cayman Islands 1.68 %
• Brazil 1.26 %
• England 1.19 %
• Sweden 1 %
• Switzerland 1 %
• Australia 1 %

🏭 Industry and sector diversification

Sectors perform differently in different market phases. Overweighting (e.g. only tech) massively increases the risk.

Important sectors:

• Technology - Growth drivers, but volatile.
• Healthcare - Stable, defensive.
• Industry & Engineering - Cyclical, benefits from global growth.
• Finance - Interest rate-dependent, stabilizing.
• Consumption (cyclical & defensive) - Different reactions to the economy.
• Energy & commodities - Inflation protection, but volatile.

Broad sector diversification is a core principle of good diversification

Tenbagger 2024 DEPOT:

Sectors:

• Information technology 40.7 %
• Industry 20.21 %
• Financial services 10.09 %
• Healthcare 7.42 %
• Consumer staples 5.59 %
• Materials 5.57 %
• Consumer goods 3.45 %
• Consumer services 2.87 %
• Business services 2.67 %
• Utilities 1.44 %

🧱 Company sizes (market caps)

Large caps, mid caps and small caps react differently to market phases.

• Large caps - More stable, globally diversified, lower volatility.
• Mid caps - Good balance of growth and stability.
• Small caps - Higher growth potential, higher volatility.

A mix smoothes out volatility and increases the chance of long-term outperformance.

(My dears, here my share of growth stocks and smaller companies is somewhat larger. I can also see that from the greater volatility).

📈 Investment styles: Growth vs. value vs. quality

Styles rotate over the years. A mixture reduces timing risks.

• Growth - High growth rates, sometimes expensively valued.
• Value - Cheaper, more stable, often with high dividends.
• Quality - High profitability, strong balance sheets, often more defensive.

Style diversification protects against long underperformance phases of individual factors.

🧩 Practical portfolio architecture (100% equities)

A pure equity portfolio can be very stable if it is structured. The sources emphasize that broad diversification across regions and sectors reduces risk and increases the potential returns

Pure single stock portfolio (high control)

• 20-30 shares
• Max. 5% per individual position
• Max. 20-25 % per sector
• At least 3 regions covered
• Mix of large/mid/small caps

(Here my share in the tech sector is slightly higher. My largest position is 6.5%. My positions are 60, but 20 to 30 positions are absolutely sufficient and also clearer)

🔍 Common mistakes with 100% shares

• Too much tech exposure (USA tech lump risk).
• Too many stocks from the same country (home bias).
• Too many stocks that all carry the same risk (e.g. growth only).
• No regular review of weightings.

🧠 A non-obvious point

Diversification does not mean "as many positions as possible", but as many different risk drivers as possible. Ten tech stocks are less diversified than three stocks from completely different sectors.