1Semana
The theoretical earning power of your variants in all honor, but one should also mention the cluster risk involved here. Yield at any price should not be the goal of an ETF investor; in most cases, the goal of an ETF strategy should be risk diversification.
A country allocation of well over 70% to 80% in the USA and an overweighting of the big tech companies such as $AAPL & $NVDA of up to 6% of the total portfolio value while outside the top 10 stocks there is already a 0.xx% neglect is not a sensible investment despite all the returns.
There is nothing to be said against taking returns with you, but you always have to be aware of the risks and keep an eye on developments in order to correct them if necessary. But that's exactly what most ETF investors don't do because it's a set and forget thing for them and so the presentation here in the post is clearly too one-sided for me, even if it is well written.
A country allocation of well over 70% to 80% in the USA and an overweighting of the big tech companies such as $AAPL & $NVDA of up to 6% of the total portfolio value while outside the top 10 stocks there is already a 0.xx% neglect is not a sensible investment despite all the returns.
There is nothing to be said against taking returns with you, but you always have to be aware of the risks and keep an eye on developments in order to correct them if necessary. But that's exactly what most ETF investors don't do because it's a set and forget thing for them and so the presentation here in the post is clearly too one-sided for me, even if it is well written.
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@Kraemmo I don't have a problem with the lumps right now. US companies operate worldwide. Would you rather have a European company that doesn't generate anything? Europe won't be any good in the long term either. I admit: you have to think about markets like China and India. I have India in my portfolio, for example.
As far as the lumps per company are concerned, if you look at my portfolio and an Apple share that has performed very well, you'll see that I haven't done too badly so far.
However, I understand your objection and, if I were to build it very precisely, I would probably at least make sure that the clumps don't shoot up too high. However, I don't care at all about the countries.
Note also the compound interest effect that you give away if you invest today in a lame cow aka msci Europe or something.
Incidentally, the purpose of the article was to show why DivETFs make no sense (for young investors) and not to work out the perfect strategy. The bottom line is just a basic recommendation. Of course, you can argue about that. There is no optimum - nor will there be.
As far as the lumps per company are concerned, if you look at my portfolio and an Apple share that has performed very well, you'll see that I haven't done too badly so far.
However, I understand your objection and, if I were to build it very precisely, I would probably at least make sure that the clumps don't shoot up too high. However, I don't care at all about the countries.
Note also the compound interest effect that you give away if you invest today in a lame cow aka msci Europe or something.
Incidentally, the purpose of the article was to show why DivETFs make no sense (for young investors) and not to work out the perfect strategy. The bottom line is just a basic recommendation. Of course, you can argue about that. There is no optimum - nor will there be.
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@lawinvest I didn't mean it as a criticism of the point of the article because I absolutely agree with you, pure DivETFs simply don't offer any added value apart from the dividend and are therefore nothing for me.
And you can certainly always argue about how big a lump really is in terms of currency risk (e.g. the Fed's interest rate policy) and diversification of the companies themselves by operating globally on the market.
However, and this was important to me in my contribution, it is important to point out such risks because, as you can see from the other comments, there is a certain degree of simple replication. And I think that's wrong because, in my opinion, it should be about understanding and not about a template.
And you can certainly always argue about how big a lump really is in terms of currency risk (e.g. the Fed's interest rate policy) and diversification of the companies themselves by operating globally on the market.
However, and this was important to me in my contribution, it is important to point out such risks because, as you can see from the other comments, there is a certain degree of simple replication. And I think that's wrong because, in my opinion, it should be about understanding and not about a template.
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