2D·

Reduction $GGRP and increase $TDIV

Dear Group,

I have a 20% core in the growth portfolio $GGRP (+0,03%) currently worth just under 31k. It is saved with 400 euros per month. Total return so far around 6% (approx. 1900€).

In the separate dividend portfolio I have, among other things, the $TDIV (-0,03%) , currently worth just over 6k, saved monthly with 200€.

After careful consideration, I would now like to switch positions in order to achieve a better return and dividend yield.

The long-term return on the TDIV beats the GGRP by over 100%.

I would have to pay around 300-350€ tax on the partial sale of the GGRP, but from now on I would keep it in the div portfolio with a position size of 6k while I increase the TDIV to this 31k.

Am I missing something important or can you understand my approach and think it's a good one?

And should I consider a tranche or a one-off purchase?

I know, for you professionals such questions sometimes seem a bit simple-minded - but I just can't do any better (yet) 🫣😄

Merci beaucoup and have a nice weekend everyone 😊

17 Comentários

Pope Donkey XXI@DonkeyInvestor

And what if it's the other way around in 5 years? Then you'll have another 5 years of poor returns, switch again and pay taxes again. 5 years is far too little for a meaningful comparison of returns.

You could try comparing the underlying indices. Perhaps they have been around for longer?

Otherwise, take the ETF that best reflects your strategy and don't chase returns. And that is meant literally.

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Epi@Epi

@DonkeyInvestor @_EvD_ Listen to the donkey, it is anointed with gold by the god of money. 👍

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Moritz@leveragegrinding

@DonkeyInvestor Thank you for being here.
Maybe.

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Pope Donkey XXI@DonkeyInvestor

@leveragegrinding I am hated and loved at the same time

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_EvD_@_EvD_

@DonkeyInvestor Thank you for your kind feedback. Currently, after 5 years of investing experience, I tend to make rookie mistakes again. The constant desire to optimize returns has led me a bit astray, or to put it more harshly... greed eats brains. In addition, I actually looked for better data and ... *drum roll* ... Since its launch, my $GGRP has even slightly outperformed the $TDIV in terms of average annual returns. So the community has saved me (once again). 🤗

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beardonfire@beardonfire

Just leave $GGRP at current level and lower or even stop investing into it. Invest all money to $TDIV instead and you will catch up in fast time if you want to.

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Tan@Chuando

I have not checked whether your reasoning is based on correct data and assumptions, but I assume that you are comparing apples with oranges and would advise you not to sell. You can simply leave the old ETF and invest in the new one from now on.

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_EvD_@_EvD_

@Chuando Many thanks for your quick reply. My considerations are based on the chart comparison (hopefully added later above). The core position will simply remain the largest position in the long term, hence the consideration of the respective size adjustment.

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Saschko@WarrenamBuffet

Beats long-term? What does long-term mean? For me it's 10 years+
The last few years might be...I have both, but I weight the $GGRP more, it will come back....

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_EvD_@_EvD_

@WarrenamBuffet Thank you for your feedback. I could not set more than 5 years for Just ETF. So not really long-term yet, but not exactly a current view either.

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Saschko@WarrenamBuffet

@_EvD_ yes, ETFs haven't been around that long....

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Epi@Epi

Have you ever heard of mean reversion? It also exists for factors.

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_EvD_@_EvD_

@Epi I would also like to thank you very much for your kind answers. 😊 You save me every time in the brief moments of greed from stupidity and beginner's mistakes. Can mean reversion be roughly understood as a cyclical development towards an intrinsic value ... Quasi alternating moments of overvaluation and undervaluation, which balance each other out with the appropriate patience?

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Epi@Epi

@_EvD_ Something like that. Mean reversion means the tendency of systems, such as shares or ETFs, to return to the long-term average. This usually means reducing overvaluations or vice versa.
In your case, this means that as long as both ETFs consistently pursue their strategies, they will approach the long-term factor returns. If an ETF performs less well for a while, the chances of it catching up again increase.
However, there is no such thing as 100% certainty. Otherwise it would be too easy. 😬

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Yieldrology@Yield-Ahead

This is the reason why I will never have a factor ETF as my core. Never. Just a plain vanilla fund, weighted by market capitalization and spanning the globe. Then I never have to worry and never have to ask myself which factor strategy will perform better in the next 5 years.

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Epi@Epi

@Yield-Ahead Then you will never have a safe withdrawal rate of more than 3%. 🤷

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Yieldrology@Yield-Ahead

@Epi That is not my motivation. Saving according to the 4% rule doesn't interest me in the slightest. The only thing that motivates me to invest my money in the stock market is the long-term (organic) increase in dividends.

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