1D·

My goal, your opinion

Greetings,

I generally don't think much of posts on feeds from any media, as they don't bring me any added value but merely serve to present myself. Now that I have followed the publications and reactions a bit, I think I have seen more than less constructive members here.

For this reason, I have decided to make the first post of my life here. It's not directly about sums, I just want to ask for your assessment of my savings plan and target allocation. Constructive criticism and suggestions for improvement are expressly welcome.

The whole thing is intended to reflect a core-satellite strategy with a 1:1 risk/reward ratio.

Global diversification (core) - 60%:

Individual securities (satellites) - max. 20%:

Buffer (security) - approx. 20%:

Raw materials:

$IGLN (-0,58%) - 6%,,
$CMOE (-0,1%) - 4%,

Bonds:

$0GGH (+0,09%) - 6%,

Real estate:

$IWDP (+0,05%) - 4%.

My thought process should be clear. The core should cover global performance with a percentage distribution based on economic strength. Separately, the World Health Care ETF, as people are getting older and sicker and, in my opinion, the healthcare sector is not so strongly represented in the other ETFs.

For the satellites, my thought process is as follows:

Berkshire can be seen as an ETF and covers successful individual stocks.

Nothing works without energy, hence BWX (USA) and Iberdrola (Europe). I see digital security threatened by AI and the further development of data centers etc., hence CrowdStrike. Companies will always need good software to be able to expand and still keep track of things, hence HubSpot. In connection with AI and the armed conflicts in our world, I see drones as a future-oriented technology in all possible areas, hence AeroVironment. And I discovered Intellia as a medical catapult, which is admittedly a bit of a gamble, but always gets a lot of drugs into the test phase.

I don't think I need to say much about the buffers, as in my view these are the investments that remain stable or grow in difficult market phases when everything else is falling.

This gives you a little insight into my thinking and actions. Please don't tear it apart, I'm not a professional but I'm sacrificing some of my remaining free time to get a bit of an insight into the world of capital and maybe get a small slice.

I welcome any opinions and suggestions for improvement.

I wish everyone a successful week!

Best regards

Nils

15 Comentários

Epi@Epi

It's great that you dared to do it, that's what the community thrives on. 💪

About your portfolio:
It looks well-organized and well thought-out at first. The devil lies in various risks that you rarely see. I hope you're aware of them.

1. drawdown: Your portfolio has a certain risk on the currency side. Your ETFs are all unhedged, so your portfolio will lose significantly if the USD falls.

2. diversification: Most of your portfolio is highly correlated. I estimate >0.8, i.e. if one position falls, most of the others will fall too.

3. liquidity: Your portfolio essentially depends on the liquidity situation of the markets, especially the USA. There are already dark clouds on the horizon. If there is a liquidity squeeze, your portfolio will be defenseless.

4th strategy: You are only pursuing a single strategy, i.e. virtually no diversification on this side. B&H has done well for the last 15 years, 2000-2011 was terrible. I would diversify here.

Good luck!

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_Barren_Wuffet_@_Barren_Wuffet_

@Epi cool that you're commenting, thanks! I read your post on the momentum strategy some time ago and even halfway understood it.

At least it's been thought through superficially, and I didn't expect much more.

1. I am aware of that. But I thought that the dollar is fundamentally in a better position than the euro, if only because it is supported by oil, and I also think that there is more of a crisis in the eurozone than in the dollar area, or am I wrong? What would your approach be? I can't hold everything in Eurohedged as well. Or only buy in hedged? What happens if the euro falls and the dollar rises? I don't know much about that yet...

2. do I hold a lot of things twice via ETF and then individually? Or is that sector-related? So I should watch out for hidden duplication and expand to more sectors?

3. Unfortunately, I don't really understand this point. So of course my plan is very USA-heavy, that makes sense to me. But doesn't the market always depend on the liquidity of the respective investment area?

4. okay, I understand. Of course, I've already read around a bit and it's always said that you should develop your strategy and stick to it. Constantly changing would be counterproductive. Are you saying that you should pursue several strategies at the same time? For example, include your explained momentum strategy?

Sorry for all the questions, but that's the only way I can understand it.

Thank you, I wish you the same!

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Epi@Epi

@_Barren_Wuffet_
For the time being, I have only indicated potentially problematic points. I don't have any universal patent solutions and there probably aren't any because every investor profile is different. Very few investors do what is objectively best for them, most believe they know better and ignore the risks until it is too late. Then there is a lot of moaning and the next irrational decisions are on the cards. So: I can only say what possible solutions might be, but not whether they suit you.

1. USD: If you are willing to hold through 15 years of USD weakness, the point doesn't matter. If potentially 30-50% currency related losses bother you, then you need a hedge.

2. correlations: Do a correlation check of your positions and throw out anything that is >0.8 correlated to the core. This will not bring you any gain in security, performance or anything else. Intuition doesn't matter either. 🤷

3. liquidity: You should protect your long-term portfolio from extreme scenarios, otherwise you will first get into trouble yourself and then the portfolio. One is a liquidity squeeze. There is not much that will rise. This should play a role in the portfolio.

4 Of course you should stick to your strategy. But it's better not to stick to suboptimal strategies. 😅
I consider various strategies to be useful for reducing volatility, smoothing the performance curve, boosting the safe withdrawal rate and lowering the retirement age accordingly.
Momentum is one possibility. There are other strategies. The main thing is low correlation and correct weighting. One simple option is the Epi portfolio: 60% equity ETF, 30% gold, 10% BTC. The most important, uncorrelated asset classes are roughly equally weighted. This B&H portfolio can also be weighted 50% and supplemented with 50% GTAA, alternatively 35% 1xGTAA, 15%3xGTAA. Then you have two largely uncorrelated multi-asset strategies, each with uncorrelated assets.
This should run fairly smoothly and still perform well. Quieter than a world ETF portfolio in any case!

But as I said, very few people subjectively consider it to be objectively the best.

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_Barren_Wuffet_@_Barren_Wuffet_

@Epi
No, you're right, if there was THE way, then a platform like this would probably be useless.
I don't want to ignore any risks because I'm not greedy, emotional or rash, at best ignorant, but that's why I'm here now.

1. that would bother me. So I have to look for my investments in the hedged version and switch to them to escape a possible weak dollar?

2. I first need to understand what such a correlation is. My understanding is that if my core rises by e.g. 10%, an individual security also rises by 8-10%. Then the two correlate and the individual stock is of no use to me in that sense. If the core stagnates or even falls slightly and an individual security rises at the same time, there is no correlation and it is a good diversification to offer me security. Is that right?

3. I understand that in uncertain times, when there is hardly any capital inflow into the market, only a few investments rise (e.g. gold or BTC would come to mind?) and I should have enough of these in my portfolio to have an increase even in stagnating markets?

4. well said, the plan is useless if it is stupid 😂
So a large strategy consisting of 2-3 independent strategies. Sounds sensible but also time-consuming. So if I take your 50/50 suggestion, consider my plan as 50% B&H and add the other 50% in GTAA?

I'll read up on GTAA, I don't know much about it yet.

My goal is of course to be able to sleep peacefully and still make the most of it.

On that note, thanks for all the food for thought! I would be delighted if we could stay in touch.

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_Barren_Wuffet_@_Barren_Wuffet_

@Epi
I've been reading up on the GTAA strategy and it sounds really interesting. However, I am at the beginning of my investments and I am afraid that this is only a worthwhile strategy when a little investment capital has been built up. For example, if I have 10-15k, I could build up a GTAA-5 satellite with 10-15% of the capital. I just haven't quite understood yet whether this should be done with individual stocks or with ETFs, which of course run uncorrelated to the core either way.

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Epi@Epi

22H

@_Barren_Wuffet_
1. if the prospect of short to medium-term currency losses bothers you, a hedged ETF would indeed make sense. Otherwise, you can of course profit from a USD devaluation with certain asset classes. Those in the portfolio would also be a hedge.

2. you have captured the high correlation well, the low correlation should not be confused with a negative one. Uncorrelated means that with +10% in A you can't say anything about B, i.e. it can rise or fall. Only negative correlation is useless.

3. in times of a credit crunch, virtually nothing rises, even BTC and gold fall significantly. You should at least be psychologically prepared for such rare crises. Or pursue a strategy that is then 100% in cash.

4. a multi-strategy portfolio doesn't have to be a lot of work. I probably spend less time on portfolio management and research than the vast majority of people here. 10min per month for signal checks and rebalancing. B&H doesn't need anything else anyway.

5. GTAA: Take a look at Wikifolio, there are at least two people who implement an unleveraged GTAA variant. And of course you can also find my 3xGTAA version there. It brings together everything that is currently available on GTAA. It's not available anywhere else and works even with little capital. Just take a look at it. And if you have any questions, just ask. 😏

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_Barren_Wuffet_@_Barren_Wuffet_

20H

@Epi
1. so I have thought again about the USD overweighting and have come to the conclusion that I will leave it as it is. At least for the time being. I think that the dollar is and will remain strong, even if it sees weaker times, the currency fluctuations will be balanced out over my long investment horizon. It is the world's reserve currency for the global economy and is underpinned by commodities such as oil and gold. Hedged ETFs are also more expensive, even if it doesn't play a major role for the time being. $0GGH and $CMOE are there for hedging and are also hedged, so I have double the security. In other words, after thinking about it for a while, I naturally have a risk, but I think it is manageable and may even have advantages.

2. oh yes, there is -1 to +1. -1 means A falls, B rises; 0 means no correlation and +1 means A rises and B rises as well. Have I got it now? 😂

3. what do you do in such a situation in the B&H? Do you hold on, buy more or sell everything when something like this announces itself? Again, I think it depends on the situation. If my situation were to come to that point soon, I would probably just keep saving at favorable prices and sooner or later the market will rise again on its own. If it doesn't, then we'll probably have completely different problems ahead of us.

4. i have already read that you actually only check your 5 ETFs once on day X according to the strategy for the 200-day line and then invest accordingly. The effort involved is really limited.

5 I have actually seen this page before. But I have to register, correct? Okay, having little capital would still be a basic requirement for me at the moment 😅

That's nice of you, I'll certainly come back to it more often :)

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Pl@Luca_x_j

Hello, I would take the Vanguard FTSE Developed Asia Pacific ex Japan UCITS ETF instead of the $XDWH. Personally, if I were to invest in commodities as a security, I would only buy them physically. And with a maximum of 5%, but of course that also depends on the personal investment risk.

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Damian@Divalo

Very nice to read your first post. As you say, I'm not a professional investor, but I'm happy with your current strategy. Unfortunately, I can't give you any detailed information about other stocks. But I can wish you a lot of fun and success on the getquin platform, there are really very interesting posts and users here, where I always like to spend my time to see what ideas and strategies the others have.

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_Barren_Wuffet_@_Barren_Wuffet_

@Divalo thanks for your reply :) nice to hear that I'm not the only amateur and that you actually think my strategy is okay. I've read a lot of interesting things here too, and always look forward to new input! I hope you achieve your goals :)

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Damian@Divalo

@_Barren_Wuffet_ Thank you my best I wish you the same

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KevinE@KevinE

15H

I don't think your thoughts are bad in principle.

A lot of things have already been mentioned. Since I invest quite heavily in individual stocks, perhaps a few words on this.

You did mention why you find the shares interesting. But not how you classify their pricing.

Example: you have a well-run craft business with which you make a profit of €100,000 every year (simplified, inflation and other external factors such as the interest rate environment are completely ignored here).

As the owner, you have your €100,000 every year. However, you are thinking about reorienting yourself and want to sell the business. Someone comes along and offers you €800,000 (8 times the annual profit). Is that attractive and do you agree? What if someone were to offer you only €350,000 or €1.4 million (not at the same time of course, but all offers have to be decided individually).

I think you understand what I'm getting at. How do you determine that the companies you have selected (20% of your portfolio!) are well (favorably) priced?

Perhaps take a look at the long-term charts (from 1995 to today) of big names such as Oracle, IBM, Nokia, Blackberry, Allianz, etc.

If you buy at the wrong time, you may not make a profit for decades (!).

Take Allianz, for example:

Share price 12/1996: 125€
Price 04/2000: 360€
Price 03/2003: 53€
Course 06/2007: 163€
Course 11/2008: 47€
Course 11/2025: 362€

If you had entered in 2008, you would have made a very good deal. If you had bought in at the all-time high in 2000, you would not have made any price gains to date (at least the dividend would still have been on top). And that's with a holding period of 25 years - and that doesn't even take inflation into account.

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_Barren_Wuffet_@_Barren_Wuffet_

10H

@KevinE
A very illustrative example, of course I know what you mean.
You've also found a point that I find fascinating with well-invested people: how do you find the best possible entry point? A quick look at your portfolio with your returns showed me that you also seem to have a method that works in this area.

I don't do any fundamental analysis of the companies, if only because my savings rate in the individual shares is so low that it's not worth the effort. I look at how the company is doing, whether it has recently made sensible decisions, whether the share price is on a rollercoaster or is following a relatively stable trend. Then how high the value of the company is, how profits have developed over the last 5-10 years. Whether I believe in the company's product also plays a role.

After a while, it becomes clear whether I made a good investment or whether I bought at an overpriced price. In addition, the equity price smoothes out with continued saving.

These are my humble initial thoughts. I think you'll be able to tell me more about this, I'm curious!

That really is a sobering example with Allianz. I generally have the feeling that the market has become incredibly expensive compared to the past, or am I mistaken?

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KevinE@KevinE

10H

@_Barren_Wuffet_

Let me try to structure my thoughts on this.

I assume you are trying to outperform broad market ETFs with your individual stocks (serious question, other goals such as similar returns to the market with lower volatility would also be a valid goal)?

Let's now assume that you achieve this outperformance and are 1.5% p.a. better than an ACWI or a 70%World / 30%EM portfolio.

Example: with the broad ETF portfolio you achieve 8% p.a., with your individual share portfolio 9.5% p.a. Ultimately, however, you are probably not interested in the figure itself, but in how much purchasing power you still achieve with it.

The inflation-adjusted return is a good 2% p.a. lower than the nominal return --> ETF portfolio: 6% p.a., individual share portfolio: 7.5% p.a.

Let's compare this over the long term with a savings plan of €500 per month that you keep for 35 years.

ETF portfolio: €716,000 final value
Individual portfolio: €1,021,000 final value. In each case, today's purchasing power.

That's quite a difference. But the point is - you have to generate the better return from year 1 onwards, otherwise the difference to the ETF savings plan will not work out. So even if your portfolio isn't that big to begin with, it will have a big impact in the long term.

Before I go into how I screen and evaluate companies, my well-intentioned advice: for many people it is more efficient to invest their time in working hours, further education and career advancement rather than in stock market analysis.

It is still more efficient to invest €800 at 6% (adjusted for inflation) than €500 at 7.5% (at least in my example with an investment period of 35 years).

I have decided for myself that I like my specialist position, my working hours are very reasonable and I therefore have a lot of time in which I have (so far) managed to generate alpha.

For others, it is much more lucrative to take the market return with them and work 1-2 hierarchy levels higher and double the savings plan. That is the greater leverage in this case. Perhaps as a little food for thought.

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_Barren_Wuffet_@_Barren_Wuffet_

@KevinE
First of all, thank you very much for taking the time to write this in such detail.

You are right in assuming that I am hoping for a "booster" in my portfolio with the individual shares.

The way you visualize it is of course even more tempting with the individual stocks, if the plan works out. I definitely understand your points and that also makes me think. However, I'm prepared to spend some time researching, as I also enjoy it somewhere.

I take your point and yes I am working on many things at the same time. I work full-time and take every shift that brings me extra money. I'm also doing my studies while working shifts and am in the process of climbing the career ladder.

So yes, investing more money is my plan. But investing more money and still outperforming the ETFs through individual stocks would be the best of both your suggestions, wouldn't it?

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