FinanzKeks (@ImmoHai) sur getquin

FinanzKeks

@ImmoHai

1Mo·

A little thought experiment:

Everyone who starts investing asks themselves what they should buy, what will go up the most!

Many opt for individual shares

But does that make sense? Especially for small amounts / beginner portfolios

Let's take a look at this:

Assumption: 1000€ deposit

(development after 1 year)

Share 1: 200€ (50% +) = 300€

Share 2: 200€ (5% +)= 210€

Share 3: 200€ (5% +)= 210€

Share 4: 200€ (0% +/-)= 200€

Share 5: 200€ (-25%)= 150€

Total after 1 year: 1070€

1 ETF solution:

1000€ ( assumption 7% p.a.) = 1070€

Of course, I have adjusted the values so that the result for both is €1070, but what I am trying to say is:

"If you don't deal with shares full time or examine each company closely, you can lose so much return with just one bad purchase that it's not even worth the risk of a single share."

(Finanzkeks - 12.08.2024🫶🏻)

And in this example I am only talking about one bad investment + one 0% case and even one very good investment (+50%).

What if there had been more bad investments or no very good investment at all?

Beginners in particular should therefore perhaps opt for the ETF variant (even if the 7% p.a. is of course not guaranteed)

Example: $VWRL (+1,32 %) or $ISAC (+1,28 %)

This saves work/time and possible loss of returns. I myself have nothing against individual stocks, but if you hold them instead of an ETF, you should try to outperform it, which can go wrong with just one or two bad purchases.

Especially as individual stocks simply offer less diversification + higher volatility than a defensive ETF.

So to all beginners, take your time, get to know the stock market, start slowly, build a base and gain experience.

I myself have also bought individual shares -

and made bad purchases...🤡 Greetings $MPW (-3,18 %)

8 Commentaires

Klassenclown 🤡@DonkeyInvestor

1Mo

Since 1987, the MSCI World Index (minus tracking error and TER) has even returned an average of 8.5% per year. The S&P 500 has returned an average of 10.5% per year for over 100 years. And the MSCI World Momentum Index has returned over 11% per year since 1994. So a simple ETF can do even better than the 7% 🚀

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DerMartin@DerMartin

1Mo

Fits, of course. Whereby you can also have a 25% loss if you deal with it full-time...

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Aktienmasseur@Aktienmasseur

1Mo

In the stock market, everyone believes that their strategy is the best, regardless of whether they are new or have been in the game for a while. All too often, people look in the rear-view mirror and mistakenly benchmark an Apple share with the MSCI WORLD, even though the share performed significantly better. But "only" with the maximum risk due to no diversification.

Just because NVIDIA was up 800% for 3-5 years doesn't mean that it will continue to do so.

An ETF delivers normal market returns without luck or skill.

But very few people want to admit that...

I have also been fully focused on ETFs since this year

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Kalle@Brazzo_Muc

1Mo

What you write is absolutely right. I am also in the process of reducing my equity positions bit by bit. I sold Starbucks today and RWE, SAP and Paypal in July. I won't get rid of all of them, but the aim is to have only 10-15 individual stocks (currently 20) in addition to the ETFs

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FinanzKeks@ImmoHai

1Mo

Looking forward to your feedback gespannt🙏🏻

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Say_hello_to_the_21st_century!@Ash

1Mo

I started with ETFs and then bought individual stocks, only to realize after a few years that it's too much work for me to always have every stock on my screen, check the news (although by the time we retail investors receive price-relevant news, the train has usually left the station anyway) and, if necessary, research new stocks.

I let the individual stocks I have now run their course without investing any further and put the money that is left over at the end of the month or comes in through other channels into my ETFs.

Much more relaxed and less stress.

(Not counting my small Bitcoin position in all of this).

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Sparfuchs@Reinecke

1Mo

Some invest in the stock market, others get married and the more risk-averse have children.

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