4Semana·

I'm facing a challenge that, as is so often the case on the stock market, is all about timing. Specifically, I'm planning to buy a larger tranche of an ETF - let's call it for the sake of simplicity $VUSA (+0,03 %) or $IUSA (-0,01 %) .


As the US elections are just around the corner, there are various scenarios. Currently, one could assume a 50% chance of Trump winning and an equal chance for Harris.


If Trump wins, there is a realistic possibility that the markets will behave in a similar way to his last election: an initial slump followed by a sustained, euphoric upswing.


The situation is different if Harris wins. Here we would have a kind of "black swan": the first female president of the USA and a defeat for the more business-friendly Republican. The market reaction would be difficult to predict. I could imagine that there would initially be a certain amount of euphoria, followed by slight falls and a phase of sideways price movements, whereby individual sectors could come under particularly strong pressure.


Of course, the election result cannot be reliably predicted, and even less so the reaction of the markets to it. Nevertheless, from a scientific and statistical point of view, one of the following buying strategies is likely to be more advantageous and promising than the others. But which one?


a) I invest 100% of my capital today.


b) I wait for the election results and then invest 100% on November 11, for example.


c) I divide the capital into 4 tranches and invest 25% today, 25% on November 1, 25% on November 6 and the remaining 25% on November 10.


d) Feel free to suggest other buying strategies in the comments 🤓


Which strategy do you think makes the most sense under the current conditions?

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22 Comentarios

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Are you trying to beat the market?

I was in a similar situation a year ago. I also thought about it, but didn't ask here on or platform. If I had asked, some would probably advise tranches, which would be worse in the end.

I had almost 300k to distribute. I then bought 2000 shares $VWRL and 50x $CSNDX at once at risk.

As you can easily see, going all in was the right decision at the time.

If I had bought in tranches, I would also have been in the black. But not as much as I am now.

That was my example. In the long term, buying once is actually better.

But go ahead and do what you think is right. If I were you, I wouldn't rely on the opinions here, but simply go with my gut feeling. Especially because it's an ETF.
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What is the added value of such contributions, apart from making it clear for the 1000th time that nobody can see into the future? I simply don't understand.

There are enough studies and statistics that show that time IN the market always beats timming the market in the medium to long term. You haven't specified what amount we're talking about, what amount in relation to your portfolio, how old are you, how long do you want to invest? So again, the added value of such posts is 0% clear to me, except to drive yourself completely crazy about what might be right now.

The same goes for the election results, who buys and how, and what they influence or change, nobody can tell you. Just wait and see, keep calm and don't throw your strategy overboard.

In the long term, the economy will always rise and if it doesn't, we'll have completely different problems than our share portfolio👍
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My opinion:
The election result will trigger an upswing.
Crypto in particular will go on a run, but also traditional stocks and ETFs.
Everything will rise well for 2/3/4 months.
After that, the market will really collapse because we will slide into a real recession.
Everything will correct very sharply by spring 2025 at the latest.
That's why new investments don't make sense for me at the moment.
I hold cash, wait until everything has fallen by 10-5% and then go back in big.

I'm still considering whether to sell everything at the high and then get back in at a good price.
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If you want to see how the elections affect the market, simply make your strategy C, you can also divide it into 2 tranches of 50% - 50% each.
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The world will not come to an end with either of them. ETFs are otherwise long-term investments. Will it make a difference whether you invest now, tomorrow or the day after tomorrow and then cash out in 30 years? Not really. Even if the crash comes.
Sure, if you time it right... But who can do that? My tip would still be C, because then you might have eased your conscience.
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No matter who is elected, the markets always go up afterwards. (Not .com bubble and financial crisis)
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If Trump loses, there is a significant risk that something like the storming of the Capitol (January 2021) will happen again or worse.
Regardless, I would never place bets.
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The financial markets and the betting markets have priced Trump in 60%. He will come. Buy Trump shares before the election.
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