1G
To everyone else who thinks that the promised land of financial freedom has been reached with a custody account volume of 1 million: That's a mistake - it just goes on in the hamster wheel of capital targets! 😁
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@Epi... if you don't want to live frugally, then a million is definitely not the end of the line 😉
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•1G
@Part_Time_Joe What do you mean by "living frugally"? With my 1.5%pM target return (YTD I'm at 3%pM), 1million means about 15k€pM. I could live much more generously with that than I do now and I wouldn't call my life frugal. 🤷
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•@Epi I calculate with the usual average values myself - 7% return p.a. With 1 million, you're at around 50,000 net. But since you can't / don't want to pay out everything, you would have around 20,000 - 25,000 euros net to live on. I think that's pretty frugal.
Of course, a higher return is only possible with a higher risk.
Of course, a higher return is only possible with a higher risk.
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1G
@Part_Time_Joe The fact that more return is only possible with more risk is a story that financial market science has come up with and that the financial market industry has happily adopted in order to keep people like you, who actually have enough, on the hamster wheel. The industry thrives on people like you with your mindset. Of course, they won't tell you that more return is possible without more risk. Or why do you think they should saw off the branch they're sitting on? 😏
I get the 1.5%pM with a drawdown of no more than 20%pa. That's 1/3 of the risk of the ACWI.
I get the 1.5%pM with a drawdown of no more than 20%pa. That's 1/3 of the risk of the ACWI.
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•1G
@Part_Time_Joe The 1.5%pM is already with debt capital. It just doesn't work without. And even more debt capital worsens the CRV below the optimum. 😏
Why don't you think the return is possible?
Why don't you think the return is possible?
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@Epi Don't get me wrong. I do believe that it is possible. This year, for example, I also have a return of around 25% to date (and similar in recent years).
But in my opinion this always goes hand in hand with additional risk. In my case, a clear concentration on 3 individual stocks and a focus on one asset (gold). At the same time, within this class, focus on junior mines.
So what I'm saying is... with a diversified ETF portfolio, which is the classic definition of low-risk, you can't generate these returns in the long term. Even Warren Buffet didn't make his fortune by betting on 30 different companies, but by putting "all his eggs in one basket", at least at the beginning.
But in my opinion this always goes hand in hand with additional risk. In my case, a clear concentration on 3 individual stocks and a focus on one asset (gold). At the same time, within this class, focus on junior mines.
So what I'm saying is... with a diversified ETF portfolio, which is the classic definition of low-risk, you can't generate these returns in the long term. Even Warren Buffet didn't make his fortune by betting on 30 different companies, but by putting "all his eggs in one basket", at least at the beginning.
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@Part_Time_Joe Hmm, I have achieved the return with a very diversified ETF portfolio and intend to continue to do so. Backtests of my basic strategy go back over 50 years. The return is stable at 20%pa, the drawdown is manageable at max 20% and definitely lower than B&H ACWI. But maybe I have overlooked something fundamental?
That's why I'm asking you why you think that's not possible. Simons has been stable 60%pa since mid 80s. Soros north of 30%pa since the 60s. Lynch, Buffett north of 20%pa. So why shouldn't 20%pa be possible?
It's not about being right or anything, it's about the central question of when and how you are financially free. According to the current figures, with 400k I would be where you want to be with 4m. Something doesn't fit. And I would like to understand that.
That's why I'm asking you why you think that's not possible. Simons has been stable 60%pa since mid 80s. Soros north of 30%pa since the 60s. Lynch, Buffett north of 20%pa. So why shouldn't 20%pa be possible?
It's not about being right or anything, it's about the central question of when and how you are financially free. According to the current figures, with 400k I would be where you want to be with 4m. Something doesn't fit. And I would like to understand that.
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•@Epi What does your ETF strategy look like? Do you use leverage? You can't have achieved the return with a classic buy & hold strategy, at least not with the regular indices?
With Simons (Renaissance), Soros or Buffet you have listed absolute exceptions. All three have either taken high risks (at least at the beginning) or have opportunities that are not available to "normal people" - in the case of Simons in particular intellectual abilities.
I don't follow a buy & hold strategy either, but more or less actively trade individual stocks based on a mixture of momentum and fundamentals - difficult to explain.
With Simons (Renaissance), Soros or Buffet you have listed absolute exceptions. All three have either taken high risks (at least at the beginning) or have opportunities that are not available to "normal people" - in the case of Simons in particular intellectual abilities.
I don't follow a buy & hold strategy either, but more or less actively trade individual stocks based on a mixture of momentum and fundamentals - difficult to explain.
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•1G
@Part_Time_Joe Correct, I have said goodbye to classic B&H. 7%pa at 60% max drawdown and 3%pa safe withdrawal rate are simply not enough for me. I would need 4 million or so to be financially free. 😅
If you've been following my posts here, you'll know that I've been actively building a multi-strategy, multi-asset portfolio since early 2023 with a lot of reading and testing. This resulted in the 3xGTAA Wikifolio certificate (50%pa, 30%mDD) and the 2xSpytips strategy (20%pa, 20%mDD) - both in my profile. I also run three other uncorrelated strategies, each with 15-20%pa expected return. The whole thing is optimized with Markowitz Sharpe ratios. This makes the overall return really stable, I'm amazed myself.
In addition to Simons, Soros and Buffett, there are many others who perform well above market returns in the long term. All of them are certainly special intellects. But perhaps you don't have to be such a great one, but simply not take the current paradigm of financial market theory at face value without question? Maybe I'm not the smartest of investors, but I can break down paradigms (there's an article on this in the Bestof).
My main 3xGTAA strategy is simply a composite of Meb Faber's combo of the Ivy Portfolio with Dual Momentum and the idea of combining leveraged ETFs with trend following. Amazingly simple really, but the basis seems to me to be relatively secure, so that the excess return is not arbitraged away so quickly. Basically, it should work as long as nobody believes it will work. 😏
So: what am I actually doing here? There's nothing to see, move along please! 😅
If you've been following my posts here, you'll know that I've been actively building a multi-strategy, multi-asset portfolio since early 2023 with a lot of reading and testing. This resulted in the 3xGTAA Wikifolio certificate (50%pa, 30%mDD) and the 2xSpytips strategy (20%pa, 20%mDD) - both in my profile. I also run three other uncorrelated strategies, each with 15-20%pa expected return. The whole thing is optimized with Markowitz Sharpe ratios. This makes the overall return really stable, I'm amazed myself.
In addition to Simons, Soros and Buffett, there are many others who perform well above market returns in the long term. All of them are certainly special intellects. But perhaps you don't have to be such a great one, but simply not take the current paradigm of financial market theory at face value without question? Maybe I'm not the smartest of investors, but I can break down paradigms (there's an article on this in the Bestof).
My main 3xGTAA strategy is simply a composite of Meb Faber's combo of the Ivy Portfolio with Dual Momentum and the idea of combining leveraged ETFs with trend following. Amazingly simple really, but the basis seems to me to be relatively secure, so that the excess return is not arbitraged away so quickly. Basically, it should work as long as nobody believes it will work. 😏
So: what am I actually doing here? There's nothing to see, move along please! 😅
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