7H·

My goal, your opinion

Greetings,

I generally don't think much of posts on feeds from any media, as they don't bring me any added value but merely serve to present myself. Now that I have followed the publications and reactions a bit, I think I have seen more than less constructive members here.

For this reason, I have decided to make the first post of my life here. It's not directly about sums, I just want to ask for your assessment of my savings plan and target allocation. Constructive criticism and suggestions for improvement are expressly welcome.

The whole thing is intended to reflect a core-satellite strategy with a 1:1 risk/reward ratio.

Global diversification (core) - 60%:

Individual securities (satellites) - max. 20%:

Buffer (security) - approx. 20%:

Raw materials:

$IGLN (+1,1 %) - 6%,,
$CMOE (-0,01 %) - 4%,

Bonds:

$0GGH (+0,17 %) - 6%,

Real estate:

$IWDP (+0,02 %) - 4%.

My thought process should be clear. The core should cover global performance with a percentage distribution based on economic strength. Separately, the World Health Care ETF, as people are getting older and sicker and, in my opinion, the healthcare sector is not so strongly represented in the other ETFs.

For the satellites, my thought process is as follows:

Berkshire can be seen as an ETF and covers successful individual stocks.

Nothing works without energy, hence BWX (USA) and Iberdrola (Europe). I see digital security threatened by AI and the further development of data centers etc., hence CrowdStrike. Companies will always need good software to be able to expand and still keep track of things, hence HubSpot. In connection with AI and the armed conflicts in our world, I see drones as a future-oriented technology in all possible areas, hence AeroVironment. And I discovered Intellia as a medical catapult, which is admittedly a bit of a gamble, but always gets a lot of drugs into the test phase.

I don't think I need to say much about the buffers, as in my view these are the investments that remain stable or grow in difficult market phases when everything else is falling.

This gives you a little insight into my thinking and actions. Please don't tear it apart, I'm not a professional but I'm sacrificing some of my remaining free time to get a bit of an insight into the world of capital and maybe get a small slice.

I welcome any opinions and suggestions for improvement.

I wish everyone a successful week!

Best regards

Nils

8 Commentaires

Epi@Epi

It's great that you dared to do it, that's what the community thrives on. 💪

About your portfolio:
It looks well-organized and well thought-out at first. The devil lies in various risks that you rarely see. I hope you're aware of them.

1. drawdown: Your portfolio has a certain risk on the currency side. Your ETFs are all unhedged, so your portfolio will lose significantly if the USD falls.

2. diversification: Most of your portfolio is highly correlated. I estimate >0.8, i.e. if one position falls, most of the others will fall too.

3. liquidity: Your portfolio essentially depends on the liquidity situation of the markets, especially the USA. There are already dark clouds on the horizon. If there is a liquidity squeeze, your portfolio will be defenseless.

4th strategy: You are only pursuing a single strategy, i.e. virtually no diversification on this side. B&H has done well for the last 15 years, 2000-2011 was terrible. I would diversify here.

Good luck!

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_Barren_Wuffet_@_Barren_Wuffet_

@Epi cool that you're commenting, thanks! I read your post on the momentum strategy some time ago and even halfway understood it.

At least it's been thought through superficially, and I didn't expect much more.

1. I am aware of that. But I thought that the dollar is fundamentally in a better position than the euro, if only because it is supported by oil, and I also think that there is more of a crisis in the eurozone than in the dollar area, or am I wrong? What would your approach be? I can't hold everything in Eurohedged as well. Or only buy in hedged? What happens if the euro falls and the dollar rises? I don't know much about that yet...

2. do I hold a lot of things twice via ETF and then individually? Or is that sector-related? So I should watch out for hidden duplication and expand to more sectors?

3. Unfortunately, I don't really understand this point. So of course my plan is very USA-heavy, that makes sense to me. But doesn't the market always depend on the liquidity of the respective investment area?

4. okay, I understand. Of course, I've already read around a bit and it's always said that you should develop your strategy and stick to it. Constantly changing would be counterproductive. Are you saying that you should pursue several strategies at the same time? For example, include your explained momentum strategy?

Sorry for all the questions, but that's the only way I can understand it.

Thank you, I wish you the same!

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Epi@Epi

@_Barren_Wuffet_
For the time being, I have only indicated potentially problematic points. I don't have any universal patent solutions and there probably aren't any because every investor profile is different. Very few investors do what is objectively best for them, most believe they know better and ignore the risks until it is too late. Then there is a lot of moaning and the next irrational decisions are on the cards. So: I can only say what possible solutions might be, but not whether they suit you.

1. USD: If you are willing to hold through 15 years of USD weakness, the point doesn't matter. If potentially 30-50% currency related losses bother you, then you need a hedge.

2. correlations: Do a correlation check of your positions and throw out anything that is >0.8 correlated to the core. This will not bring you any gain in security, performance or anything else. Intuition doesn't matter either. 🤷

3. liquidity: You should protect your long-term portfolio from extreme scenarios, otherwise you will first get into trouble yourself and then the portfolio. One is a liquidity squeeze. There is not much that will rise. This should play a role in the portfolio.

4 Of course you should stick to your strategy. But it's better not to stick to suboptimal strategies. 😅
I consider various strategies to be useful for reducing volatility, smoothing the performance curve, boosting the safe withdrawal rate and lowering the retirement age accordingly.
Momentum is one possibility. There are other strategies. The main thing is low correlation and correct weighting. One simple option is the Epi portfolio: 60% equity ETF, 30% gold, 10% BTC. The most important, uncorrelated asset classes are roughly equally weighted. This B&H portfolio can also be weighted 50% and supplemented with 50% GTAA, alternatively 35% 1xGTAA, 15%3xGTAA. Then you have two largely uncorrelated multi-asset strategies, each with uncorrelated assets.
This should run fairly smoothly and still perform well. Quieter than a world ETF portfolio in any case!

But as I said, very few people subjectively consider it to be objectively the best.

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_Barren_Wuffet_@_Barren_Wuffet_

@Epi
No, you're right, if there was THE way, then a platform like this would probably be useless.
I don't want to ignore any risks because I'm not greedy, emotional or rash, at best ignorant, but that's why I'm here now.

1. that would bother me. So I have to look for my investments in the hedged version and switch to them to escape a possible weak dollar?

2. I first need to understand what such a correlation is. My understanding is that if my core rises by e.g. 10%, an individual security also rises by 8-10%. Then the two correlate and the individual stock is of no use to me in that sense. If the core stagnates or even falls slightly and an individual security rises at the same time, there is no correlation and it is a good diversification to offer me security. Is that right?

3. I understand that in uncertain times, when there is hardly any capital inflow into the market, only a few investments rise (e.g. gold or BTC would come to mind?) and I should have enough of these in my portfolio to have an increase even in stagnating markets?

4. well said, the plan is useless if it is stupid 😂
So a large strategy consisting of 2-3 independent strategies. Sounds sensible but also time-consuming. So if I take your 50/50 suggestion, consider my plan as 50% B&H and add the other 50% in GTAA?

I'll read up on GTAA, I don't know much about it yet.

My goal is of course to be able to sleep peacefully and still make the most of it.

On that note, thanks for all the food for thought! I would be delighted if we could stay in touch.

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Damian@Divalo

Very nice to read your first post. As you say, I'm not a professional investor, but I'm happy with your current strategy. Unfortunately, I can't give you any detailed information about other stocks. But I can wish you a lot of fun and success on the getquin platform, there are really very interesting posts and users here, where I always like to spend my time to see what ideas and strategies the others have.

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_Barren_Wuffet_@_Barren_Wuffet_

@Divalo thanks for your reply :) nice to hear that I'm not the only amateur and that you actually think my strategy is okay. I've read a lot of interesting things here too, and always look forward to new input! I hope you achieve your goals :)

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Damian@Divalo

@_Barren_Wuffet_ Thank you my best I wish you the same

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Pl@Luca_x_j

Hello, I would take the Vanguard FTSE Developed Asia Pacific ex Japan UCITS ETF instead of the $XDWH. Personally, if I were to invest in commodities as a security, I would only buy them physically. And with a maximum of 5%, but of course that also depends on the personal investment risk.

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