1D·

Allianz: Investing €2,500—but what’s the best way to get started?

Hi, everyone! 👋

I’m thinking about investing a total of 2,500 € in Allianz. My investment horizon is at least 20 years. I want to buy the stock and hold it for the long term.

Unfortunately, though, I’ve repeatedly missed the entry point in the past. The price has gotten ahead of me, and now I’m wondering what the best course of action would be.

I’m not trying to catch the absolute bottom. Still, I’d naturally like to avoid buying right before a major pullback.

How would you approach this right now?

My thoughts:

Buy right away: Invest the entire €2,500 at the current price and let it sit for the long term.

Buying in installments: For example, €1,000 now and the rest during potential pullbacks.

Wait for earnings: Wait for the quarterly results first, then decide.

Consistently wait for pullbacks: Set a buy limit at around €390 and only enter the position then.

I’d be particularly interested to hear how you’d approach this with an investment horizon of at least 20 years.

With a long-term investment, does it even make sense to wait for a pullback to, say, €390, or does that just make things unnecessarily difficult for yourself?

I look forward to hearing your thoughts 😊 $ALV (-0,28 %)

29 Comentarios

Musikerie@Musikerie

If I had another 20 years, I wouldn't think twice. I'd dive right in, right away...

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Lippo@Lindi_Folio

@Musikerie No matter what the price is?
But sure, I'm already at the point where, in 20 years, an extra 100€—or a little less—won't really matter.

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Alexander_Bitcoin@Alexander_Bitcoin

@Musikerie Just go for it. Don't overthink it.

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Lippo@Lindi_Folio

Well, then that's how it'll be if everyone actually agrees 😂

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KevinE@KevinE

@Lindi_Folio It’s quite possible that we’re all wrong. But no one knows what the future holds. Buffett, for example, has been piling up mountains of cash for decades because, as a value investor, he considers all companies to be overpriced. But he’s already missed out on a ton of returns while waiting for the market to pull back.

Maybe the crash will happen just three days after you buy…

I’ve had Allianz in my portfolio since 2001 (I’d owned Dresdner Bank shares since 1991, which were split into Allianz and Commerzbank shares at that time). It’s not a standout outperformer, but it’s a solid company.

I’d rather ask myself: does it absolutely have to be Allianz if, in your opinion, buying it isn’t a pressing need right now? Aren’t there any other—more attractive—options available at the moment?

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Alexander_Bitcoin@Alexander_Bitcoin

Scared money doesn’t make money.

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Lippo@Lindi_Folio

Actually, I'd like to have an insurance company in my portfolio because that's something I'm still missing. I'd pick Allianz as my favorite—maybe Munich Re, but I'd prefer Allianz.

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Musikerie@Musikerie

You can always buy in tranches just to be on the safe side, but given the time horizon, the risk of getting in at a bad price is negligible. The risk of missing the entry point is significantly higher. Time in the market beats timing the market ...

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ThomasHH@ThomasHH

Despite all the well-meaning advice.
No one ever gets the “right” entry point.
My answer would be very clear: Today, and all of it.
Splitting your investment into a savings plan only makes the custodian bank richer. Any gains you might make from a potentially lower price are eaten up by transaction costs.
The question isn’t what Allianz’s stock price will be tomorrow or next month, but what it will be in 5, 10, or even 20 years.
With that in mind, you’re clearly on the winning side.

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Dividenden@Rente@userc7b02065b8a7407b

With a 20-year investment horizon, the timing of your initial investment is secondary. If it makes you feel more comfortable, I’d invest 50% right away and the remaining half during a “reset.” Or just set up a savings plan.

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Lippo@Lindi_Folio

@userc7b02065b8a7407b A savings plan doesn't make sense for my brokerage account (ING) because of the fees.
It doesn’t necessarily make me any better off, but a little bit of gambling is just fun, and I’ve actually managed to time my entries well with my other stocks. Unfortunately, I just haven’t been able to get into Allianz yet. At €410, I thought it would be a good buy below €400, but then it went back up 😬

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Daniel Kaufmann@Wollitz

It’s very difficult to find a pullback in Allianz—they’re pretty rare, and when they do happen, they’re usually minor. In any case, that’s how I’d put it starting in 2020. I’m personally invested as well, and I wouldn’t hesitate too long. Either invest everything or don’t invest at all. I don’t really think investing in installments makes sense. Best regards

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Alex@A1bund7

22H

Just do it

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Lippo@Lindi_Folio

21H

@A1bund7 The total amount?

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Alex@A1bund7

21H

@Lindi_Folio Yeah. Nobody here has a crystal ball. Just check in once a year to see how things are going, and then you'll be happy.

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KBO@KBO

20H

20 years?
Then buy it now for €2,500 and let it sit for 20 years!

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Lippo@Lindi_Folio

20H

Yeah, at least as long as nothing fundamental changes, I'll just let things run their course 🙂

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Marty0292@Marty0292

I'm putting 250 euros a month into a savings plan. Given the current valuation, I wouldn't go all in.

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Lippo@Lindi_Folio

21H

@Marty0292 ING's savings plan is eating up too much.

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Rookie@Rookie

22H

Sparplan

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Lippo@Lindi_Folio

21H

@Rookie Thanks, but the broker's fees are too high for that. I only buy individual stocks directly, not through a savings plan.

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Rookie@Rookie

21H

@Lindi_Folio You pay fees for a savings plan? That's interesting. What kind of broker is that?

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Lippo@Lindi_Folio

21H

@Rookie ING

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Nikos@Stryke

17H

If it's 20 years, then right away. The question with individual stocks, however, is why Allianz and at what point do you consider the stock attractive or fairly priced?
That’s why you have to decide when a reasonable price has been reached.

Otherwise, an ETF is always an option if you want to buy directly 😁

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Lippo@Lindi_Folio

17H

I have a global ETF, plus 10 individual stocks, but I'm still missing a stable, reliable insurance stock. Basically, I'd jump in right away at around €390—I see that as a comfortable entry price.

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market_maestro_vnyyc@market_maestro_vnyyc

17H

Never use a savings plan! Or do it frantically right now—every stock investor should know that!—The formula for your return is quite simple: Total Return = ((ΔOwner Earnings * 7.5) / Σ Retained Owner Earnings) * Retention Rate + Return YOU Made from Dividends * Dividend Payout Ratio + Return from Buybacks (Yield) * Buyback Payout Ratio + Multiple Expansion/Compression — Example for you (approximation)

* “ΔOwner Earnings * 8.5) / Σ Retained Owner Earnings” (optimistic estimate): 10%
* Current Multiple: 15
* Worst-Case Multiple (10% worst globally): 8.5
* You’ll likely reinvest the dividends, so the average return is the yield: 6%
* Return on share buybacks: 6%
* Dividend payout ratio: 60%
* Buyback payout ratio: 20%
* Holding period: 15 years

Then the return is: 10%*20%+6%*60%+6%*20%+(8.5/15)^(1/15)-1‎ = 0.0308
Conclusion: You make 3% nominal; even if the P/E ratio stays at 15, you only get 6.8% per year nominal. The S&P 500 has yielded 5.5% after dividend taxes (25%) and adjusted for inflation since 1792 — Invest in the S&P 500 or bet on multiple expansion! — So if it’s 20 years, it doesn’t change anything — nothing but gamblers here

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Lippo@Lindi_Folio

17H

All right, so you can probably tell me when it's a good time to buy, right? I'd jump at the chance at €390.

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market_maestro_vnyyc@market_maestro_vnyyc

17H

@Lindi_Folio Not at all! The company simply doesn't beat an index—but if the company were so cheap that it paid a 15% yield (and its earnings remained stable for the next 20 years or so) and paid out everything, and you used those dividends to buy shares in a new company that also pays out 15%, and repeated this process, then it might be worth it. However, Allianz can no longer sustain strong, sustained growth in its profits, and the dividends are also too low.

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market_maestro_vnyyc@market_maestro_vnyyc

17H

@Lindi_Folio The stock price, taken in isolation, is meaningless—just like a P/E ratio.

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