I think that's a massive mistake. The only factor that really worked in recent years was quality. But there are so many gradations. Momentum, value and co are simply underperformers in volatile markets. I would now say that the markets are not slowing down, but rather becoming more volatile.
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@topicswithhead Thanks for your input, but is that really the case? I have of course looked at the performance and just on 3M, 6M and YTD the momentum factor was MASSIVELY better than the conventional one. So with the Trump tariffs and the war you got away with better momentum.
Theoretically, you're right that momentum gets into real trouble when the market turns. But funnily enough, it's the quality stocks that are currently trending best and are therefore stronger in the fund.
It just looks at how investors are hedging and then does the same. At the moment he's going overweight Broadcom, Berkshire and Costco and throwing out Alphabet and Tesla. In itself, this sounds like a sensible set-up for volatile markets - to get out of cyclicals and buy insurance companies.
Theoretically, you're right that momentum gets into real trouble when the market turns. But funnily enough, it's the quality stocks that are currently trending best and are therefore stronger in the fund.
It just looks at how investors are hedging and then does the same. At the moment he's going overweight Broadcom, Berkshire and Costco and throwing out Alphabet and Tesla. In itself, this sounds like a sensible set-up for volatile markets - to get out of cyclicals and buy insurance companies.
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@Soprano On a 5-year horizon, Momentum is 7% behind the world. It also had more vola. It performs massively better over 10 years. Using momentum as a core is questionable in itself. Then your thesis must be that trends last longer than 6 months min. If you believe in that then it's worth it. Otherwise they are more expensive for stocks that are delayed in an ETF. If you look at what has brought returns, it has been the last 8 years. Just don't believe in factor strategies. That always means you have to make an underlying thesis
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@topicswithhead Well, I can't use it as a core anyway. Where am I supposed to get another 100k+ from now? Even if it makes up 10% at some point, in the end it's just an admixture :D
But if you don't like momentum then you probably don't like leverage either. Now let's be honest. Which ETF would you recommend if I don't want a normal World and ACWI?
But if you don't like momentum then you probably don't like leverage either. Now let's be honest. Which ETF would you recommend if I don't want a normal World and ACWI?
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@Soprano I like leverage. I leveraged my 2024 portfolio with credit, despite 5% interest. Momentum can work. But studies show that historically beta strategies only work at intervals and if you look at value, it's been years. I only believe in quality, but there are a lot of junk ETFs. The problem with quality is that it is very tech-heavy. They usually rely on asset light models. I would look for a super cheap World or ACWI. The ones from Amundi, but not many like them, or the ones from SPDR. Of course there is a lot of overlap, but that won't be any different at the moment. Certainly Nvidia, Amazon and co the top positions
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@topicswithhead I mean it should only be a supplement to your shares. So why not use the normal market return. It's best to take the largest position but not via your equity portfolio. Hedge yourself against the market
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@topicswithhead $WEBN $ETF210 $SPYY $SPPW now linked
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•@topicswithhead Yes, I definitely think quality is good, but I have already represented it well in the depot.
If I simply buy a passive and normal ETF then only an S&P 500. There would also be a multi-factor version with QVM, the IE00BDZCKK11, but the normal IE00B5BMR087 would be enough for me.
If I simply buy a passive and normal ETF then only an S&P 500. There would also be a multi-factor version with QVM, the IE00BDZCKK11, but the normal IE00B5BMR087 would be enough for me.
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@Soprano Normal is not always bad, and you don't always need something niche just to avoid following the crowd. I hardly see any reason to only have the USA, even if it has performed better and will probably continue to do so. If you can get the other part of the World so cheaply, the 70% USA is still worth it. I just take a sober approach, and it shows that the smart beta things are hardly worthwhile. Our investment horizons and choices are not all that different. I already had almost all the stocks you have in your portfolio or still have some of the same ones. Regardless of that, if you need something else: what do you think of PE or PC? With 100k you can slowly make a few investments to cover the sector. Whether that's via Eltif or in a company, you'll have to see
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•@topicswithhead Yes, but I really don't have the feeling for these ACWI stories. I always think of financial flow. So nothing against the guy, but somehow you really have to want to be such a calm and moderate German in a turtleneck sweater. 🫣 I'd much rather be a young Buffet.
Yes, I would find private equity interesting in principle. But I have no idea how to do it at all, I think you usually need millions for that. I had a look at this ELTIF that Scalable offers, but you can't even find out what you're actually investing in. The main thing is that the thing has endless fees.
I have excluded private credits. It seems completely illogical to me why I should lend money to people who nobody else wants to lend money to. Bonds or bond ETFs are much safer. And the returns will be the same.
And somehow I think personal loans are more of a thing for cash flow investors, i.e. grandpas who always go all in on dividend stocks and are happy about their consumer goods shares 🥲
Yes, I would find private equity interesting in principle. But I have no idea how to do it at all, I think you usually need millions for that. I had a look at this ELTIF that Scalable offers, but you can't even find out what you're actually investing in. The main thing is that the thing has endless fees.
I have excluded private credits. It seems completely illogical to me why I should lend money to people who nobody else wants to lend money to. Bonds or bond ETFs are much safer. And the returns will be the same.
And somehow I think personal loans are more of a thing for cash flow investors, i.e. grandpas who always go all in on dividend stocks and are happy about their consumer goods shares 🥲
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@Soprano PC doesn't necessarily mean lending money to people who otherwise shouldn't get it. I find PC very interesting, more interesting than PE as a small investor. Have a look at $APO. I'm about to buy, but my limit hasn't jumped. I'm not a fan of most PE shops but there are a few interesting ones
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