Vanguard S&P 500 ETF

Portfolio feedback

Now that I've reached my goal for this year, I thought it was time to hear some different opinions from you.

Briefly about me: I am 19 years old and started investing in June this year. Thanks to my training salary, I have a monthly savings rate of €350, which is currently broken down as follows:

250€ in the $IWDA (+0,23%)

100€ in the $EIMI (-0,21%)

Now a few thoughts on my part:

I will probably stop the savings plan on the $EIMI (-0,21%) as, in my opinion, it no longer has that much potential.

Furthermore, I will expand my portfolio by $BTC (-0,31%) to my portfolio. The idea here was to change the savings plan on the $EIMI (-0,21%) to Bitcoin.

I am also still young and therefore think that I can add a little risk to my portfolio. What can you recommend? I was perhaps thinking of a $VUSA (+0,32%) or one $CSNDX (-0,01%) even if this would significantly overweight my USA share.

Thanks to everyone who takes the time to read through this post🙏

Broaden your portfolio to reduce risk? Tradingview Indicator

Who hasn't experienced this? You think you're diversifying with a new asset, only to realize that it's actually very similar to the rest of your portfolio. This doesn't create a real diversification effect, it's just packaged differently and you have almost the same exposure.

This is where my indicator comes in. It shows you how strongly your current chart (you can use just about anything here: from individual stocks like $PLTR (+6,35%) to ETFs like $IWDA (+0,23%) , bonds, crypto, commodities, economic data, etc.) with key markets such as the S&P500 $VUSA (+0,32%) , the Nasdaq $CSNDX (-0,01%) , the Russell2000 $XRS2 (+0,06%) , the Dax $LYY7 (-0,47%) , China $CNUA (-0,27%) , gold $GOLD silver $PHAG (+0,78%) , bonds or the cryptocurrency $BTC (-0,31%) correlated. This allows you to immediately recognize whether a supposed addition to the portfolio actually changes anything or is basically just a clone of what you already have. Let's take an example: You think you are creating a counterweight to Europe with China, but you realize from the correlation that both markets are moving almost in sync. So you know that this "diversification" is of little use. Apart from the fact that Europe and China generally haven't done much for a long time, haha.

The interpretation of the values is relatively simple. High correlations (close to 1) indicate similar price trends, negative ones indicate opposing trends, and values around zero indicate that there is no clear connection. Bear in mind, however, that correlation is not the same as causality and often only shows indirect relationships. Moreover, historical correlation is no guarantee of future patterns. Nevertheless, this view helps to uncover possible misconceptions and develop more targeted diversification strategies to make your portfolio more resilient. The +/- ratio can now also be taken into account. This is because it often happens that one and the same asset correlates very differently with each other in different phases - sometimes very positively, sometimes very negatively. As a result, the average value can provide a misleading picture. The stronger these fluctuations are, the more percent of the time it is positively or negatively correlated. This is therefore an additional indicator to check how meaningful the average correlation actually is. So + value is the time where the correlation is positive in % etc.

Still to be optimized, that the correlation is not currently limited to certain time periods. For example, if you want to look at the relationship between MicroStrategy $MSTR (+8,98%) and Bitcoin in isolation would have to exclude earlier phases in which MicroStrategy was still a real business and not a "leveraged closed commodity fund" as it is now. In addition to the ATH delta filter, I also plan to incorporate a moving average (MA) as a further trend filter. In the long term, I would like to integrate even more markets, for example emerging markets or non-USD bonds, in order to paint a truly comprehensive picture.

The correlation with interest rate expectations I have used $SHY (short-term government bonds) and $TLT (long-term government bonds). If the SHY falls, the market assumes that interest rates will rise over the next two years. In the case of TLT, this expectation relates to around 16 years and is effectively "leveraged" by the term. If the asset you have shows a high correlation to the SHY, it means that it is relatively sensitive to interest rates (like almost everything). But that would be too much to explain in detail. What is clear, however, is that interest rates play a major role for equities, especially for the Russell 2000, where many smaller, unprofitable companies benefit from low interest rates, as do mining companies with high levels of debt, for example. Of course, it is not the only correlation, but it is an important factor.

• Which other markets or assets would you include to bring more clarity to your analysis?
• Does the indicator even make sense?
• And is there anyone here with a statistical background who would like to go through the code to make sure that everything is calculated correctly or how it could be done better?

I don't know if this is an affiliate link, but don't think so anyway: this is advertising

https://www.tradingview.com/script/kRCxLnhY-Asset-Correlation-Check/

On into December. November was extremely (good), mainly driven by Palantir.

An update on the portfolio. My 'Dull Seven' - a nice boring 7 positions (2 ETFs and 5 individual stocks).

Long-term investment strategy with an investment horizon of another 15-18 years. From then on it would slowly move towards retirement. I have been invested since 02/2023.

The ETFs as my main investment with currently just under 37% (depressed by Palantir) and the goal of reaching 50-60% at some point.

• $VWRL (+0,18%) FTSE All-World to keep US below 60% in the long term. (savings plan)
• $VUSA (+0,32%) S&P 500 extra to take advantage of slightly higher returns compared to the All-World. (savings plan)

Plus a handful of individual stocks:

• $MSFT (-1,05%) for long-term blue chip growth with a small dividend. (savings plan)
• $8001 (-0,17%) long-term strong growth and a decent dividend. (savings plan)
• $ALV (-0,66%) as a long-term runner with a decent yield and very good dividend. (savings plan)
• $BA. (-0,57%) back in since September. (savings plan)
• $PLTR (+6,35%) as a long-term tech bet with +190% so far/since November '23. Additional purchases when opportunities arise.

Depotupdate November - A successful month with a clear focus

November was a strong month, both in terms of returns and strategic realignment. The current portfolio value is 48.745,46 €with a solid monthly return of 6,86 %which corresponds to a price gain of 3.131,04 € . It is a further step towards a long-term and growth-oriented portfolio.

Activities in November: purchases and sales

Purchases:

S&P 500 $VUSA (+0,32%)
via savings plan

The regular savings plan with 930 € in the S&P 500 was executed as usual. This basis offers stability and long-term diversification in the portfolio.

Bitcoin $BTC (-0,31%)
The individual purchases with a value of 2.361,92 € reflect the conviction that Bitcoin will continue to gain in importance as an asset class in the long term. With a current weighting of 5,47 % it remains a tactical addition.

Sales:

Altria Group $MO (+0,78%)
The position was sold with a plus of just under 30 % which corresponds to a volume of 1.340 € corresponds to a volume of €1,340. The tobacco giant no longer fits in with the growth strategy, which focuses on innovative and future-oriented companies.

LVMH $MC (-0,25%)
This position was also sold, with a total value of 800 € and a loss of 280,74 €. Despite the quality of the company, the focus is now more on growth-oriented stocks, which is why LVMH no longer fits the strategy.

Portfolio structure and weighting

Security type weighting:

• 49.47 % ETFs - A stable anchor, particularly through the S&P 500.
• 45.05 % equities - The focus remains on individual stocks with potential for growth.
• 5.47 % Bitcoin - A small but increasingly relevant addition.

Top 5 sectors:

IT (25.19 %) - Driver in the portfolio, led by NVIDIA $NVDA (+2,01%) and Apple $AAPL (+1,34%)
Financial services (23.89 %) - Reliable returns with Allianz $ALV (-0,66%) and BlackRock $BLK (+0,12%)
Defensive consumer goods (16.05%) - Stability through P&G $PG (-1,24%) and Walmart $WMT (-2,1%)
Cyclical consumer goods (7 %) - Moderate exposure with potential.

Industrial goods (6.32%) - A diversifying addition.

Country allocation:

• USA (80 %): The dominant market in the portfolio.
• Germany (6.6%): Local stocks such as Allianz and Siemens.
• Other countries (5.54%): Global diversification.
• UK (1.08 %) and France (0.90 %): Smaller positions.

Deep Dive: The top 5 positions

NVIDIA (7.72 %):

Leader in AI development and graphics processors. NVIDIA remains the largest position and a key stock in the portfolio.

Allianz (6.16%):

A defensive anchor with stable dividends and strong market position in the insurance and wealth sector.

Apple (6.03%):

With a focus on services, wearables and technological innovation, Apple remains an essential holding.

Microsoft $MSFT (-1,05%)
(5,65 %):

Leader in cloud services and AI solutions. Microsoft remains a long-term favorite.

BlackRock (5.63%):

The world's largest asset manager benefits from rising capital inflows and remains a mainstay.

Top movers in November

Winner:

• Walmart (+15.55%): Convincing quarterly figures and strategic e-commerce expansion.
• Costco $COST (-1,09%)
  (+14,14 %): Solid performer thanks to strong member retention.
• P&G (+10.89 %): Resilience to crisis pays off.
• S&P 500 ETF (+8.38 %): Benefits from the general market upswing.
• Waste Management $WM (-0,32%)
  (+8,27 %): Stable income from a defensive business model.

Loser:

• Hercules Capital (-2.38%): The BDC specialist had a weak month. A strategic review of this position is imminent.

Conclusion and outlook

November was a very successful monthboth in terms of returns and the strategic realignment.

Key decisions:

• The focus remains on long-term growth through technology and quality stocks.
• The sales of Altria and LVMH show that the portfolio is being consistently adapted to the strategy.
• Hercules Capital is under review and could soon be removed from the portfolio as it no longer fits the growth strategy.

Long-term perspective:

With the savings plan and targeted individual purchases, the portfolio is running on "autopilot". The combination of patience, strategic adjustment and a clear focus on growth stocks strengthens the foundation for a successful future.

The portfolio remains on course - an exciting month with a clear direction!

The S&P 500 - Why it remains a must for every portfolio

Reading time: 8 minutes

For decades, the S&P 500 $VUSA (+0,32%)

has been one of the cornerstones of many investor portfolios for decades. With stable returns, a broad mix of leading US companies and a simple investment structure, it is the epitome of a solid investment. But what makes the S&P 500 so special and why is it still such a safe choice? Let's take a closer look at the reasons why the S&P 500 has lost none of its appeal since its inception.

1. solid returns over decades

Since its introduction in 1957 by Standard & Poor's, the S&P 500 has achieved an impressive average return of around 10% per year, if dividends are included. Excluding dividends, growth is around 6-7 % per year. Of course, there are always setbacks and crisis years, but over the long term the index shows remarkable resilience. This consistency is particularly valuable for investors looking for long-term capital growth.

2. broad diversification with a slight focus

The S&P 500 comprises the 500 largest listed companies in the USA, from technology giants to banks and consumer goods manufacturers. This diversification spreads the risk and ensures that the success of the index is not dependent on the performance of a single sector. However, the index is currently dominated by a small number of tech companies - the ten largest companies, including Apple, Microsoft and Alphabet, account for around a quarter of the market capitalization. Should the technology sector weaken, this could have a noticeable impact on the index. Nevertheless, the S&P 500 remains broad enough to serve as a solid foundation for a portfolio thanks to its cross-sector focus.

3. rigorous selection and market leadership

The S&P 500 only includes companies that meet strict criteria in terms of size, liquidity and financial stability. Companies that make it into this index have often established themselves as market leaders in their sector and offer investors a certain degree of stability over the long term. The index is weighted by market capitalization, which means that the largest companies have the greatest influence on performance. Although this leads to a certain dependence on the top companies, it ensures that the S&P 500 is driven by the best performing companies in the country.

4. a reflection of the US economy - and beyond

The S&P 500 is often seen as an indicator of the US economy, as it tracks the country's largest companies. However, many of these companies operate worldwide, which is why the index increasingly reflects the global economy. Large parts of the turnover of these companies now come from international markets, which makes the S&P 500 an indirect participation in global economic growth. This makes the index particularly suitable for investors who want to participate in the success of the largest global players without being tied to individual international markets.

5. inflation protection and capital growth

Over the long term, the S&P 500 has generally been able to compensate for inflation and also provide real capital growth. In phases of moderate inflation, investors have achieved high real returns with the index. However, there were times, such as in the 1970s, when real returns were significantly reduced by high inflation rates. Nevertheless, the S&P 500 remains a reliable protection against the creeping devaluation of money - especially in comparison to many bonds.

6. cost efficiency through ETFs

A major advantage of the S&P 500 is that it can be easily and cheaply tracked via exchange-traded funds (ETFs). The cost of many S&P 500 ETFs is less than 0.1% per year, making them extremely cost-efficient - especially when compared to actively managed funds. Names such as the Vanguard S&P 500 ETF or the iShares Core S&P 500 ETF offer investors a cost-effective way to invest broadly in the US market and exploit the potential of the index without having to pay high fees.

7. high liquidity and ease of trading

The S&P 500 is one of the most traded indices worldwide. This ensures high liquidity and low trading costs, which makes it attractive for both private and institutional investors. The strength of a liquid index is particularly evident in times of crisis: investors can adjust their positions quickly and transaction costs remain low even with high trading volumes. The S&P 500 is therefore ideal for investors who value flexibility and accessibility.

8. high popularity with international investors

The S&P 500 attracts not only American but also numerous international investors. Many see it as giving them direct access to the largest and most successful companies in the USA - and thus also to the innovative strength of the US economy. Especially in times of uncertain markets outside the USA, the S&P 500 is an attractive alternative that enables international investors to benefit from the stability and growth of the US market.

Conclusion: A "no-brainer" for every portfolio

Thanks to its long-term stability, high liquidity and the ability to invest cost-effectively via ETFs, the S&P 500 remains one of the best investment opportunities for long-term investors. The historical return of around 10% per year including dividends and the solid inflation protection make it the ideal basis for asset accumulation. Even if the dominance of the technology sector means a slight concentration, the S&P 500 offers a good balance thanks to its broad sector diversification.

The S&P 500 therefore remains the first choice for investors who want to invest simply and safely in the major trends and market leaders. It makes it possible to participate in the power of the US economy and its globally active top companies - at low cost and with impressive long-term performance.