1. real estate
I have a few (see also my nickname), but the long-term return on German real estate is subterranean.
https://gerd-kommer.de/wertsteigerungen-wohnimmobilien/
2. diversification/Apple share
Your Apple share in the portfolio is approx. 50%. For me personally, this is clearly too much for a single share.
3. costs
The costs of your investment funds would be a reason for me to sell them. Way too high (1.72%, 1.84%, 1.89%, 0.65%).
I have a few (see also my nickname), but the long-term return on German real estate is subterranean.
https://gerd-kommer.de/wertsteigerungen-wohnimmobilien/
2. diversification/Apple share
Your Apple share in the portfolio is approx. 50%. For me personally, this is clearly too much for a single share.
3. costs
The costs of your investment funds would be a reason for me to sell them. Way too high (1.72%, 1.84%, 1.89%, 0.65%).
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@Gehebeltes-EFH
Thanks for your feedback... some comments below
1. i agree 100% that German real estate returns have historically been anemic, although there has been an improvement over the last decade. However, I would argue that the benefits of owning a property are still significant even if the property doesn't appreciate in value:
- As I mentioned earlier, you have a fixed mortgage rate for X number of years (keep in mind that rents have increased more than property prices in recent years)... in my case in Munich, I pay 1900 euros per month for an apartment that rents for about 2800 euros, that's a saving of almost 1000 euros per month, 12,000 euros per year. Beyond that, 1000 euros goes against my equity and only 900 are real "costs", i.e. interest. Certainly a house has to be maintained, but as I bought a new build, the maintenance costs have been zero so far, thank goodness.
- If you rent out the apartment in Germany, you have additional advantages as you can claim tax deductions.
- And last but not least, you can be sure that the landlord will not magically decide that his "sister from Jamaica" will move into your apartment in 3 months... So you have more control over your destiny.
2. 100% approval... will be lowered in the coming months
3...I'm impressed you noticed that.... yes, these funds have high costs, BUT they also outperform, believe it or not, the S&P 500 and also the Nasdaq, while also having limited exposure to Apple (see point 2), so they accomplish two goals for me. I'll share some of these insights with you in my next post on stocks.
Thanks for your feedback... some comments below
1. i agree 100% that German real estate returns have historically been anemic, although there has been an improvement over the last decade. However, I would argue that the benefits of owning a property are still significant even if the property doesn't appreciate in value:
- As I mentioned earlier, you have a fixed mortgage rate for X number of years (keep in mind that rents have increased more than property prices in recent years)... in my case in Munich, I pay 1900 euros per month for an apartment that rents for about 2800 euros, that's a saving of almost 1000 euros per month, 12,000 euros per year. Beyond that, 1000 euros goes against my equity and only 900 are real "costs", i.e. interest. Certainly a house has to be maintained, but as I bought a new build, the maintenance costs have been zero so far, thank goodness.
- If you rent out the apartment in Germany, you have additional advantages as you can claim tax deductions.
- And last but not least, you can be sure that the landlord will not magically decide that his "sister from Jamaica" will move into your apartment in 3 months... So you have more control over your destiny.
2. 100% approval... will be lowered in the coming months
3...I'm impressed you noticed that.... yes, these funds have high costs, BUT they also outperform, believe it or not, the S&P 500 and also the Nasdaq, while also having limited exposure to Apple (see point 2), so they accomplish two goals for me. I'll share some of these insights with you in my next post on stocks.
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•@Stevoo13
Actively managed funds perform statistically below average:
https://www.spglobal.com/spdji/en/research-insights/spiva/
https://www.justetf.com/de/news/geldanlage/der-beweis-aktive-manager-schlagen-den-markt-nicht.html
Why is that so? I asked Grok:
"Actively managed funds often underperform for a number of reasons:
1. **Costs**: Actively managed funds typically have higher fees than passively managed funds (like ETFs). These costs include management fees, performance fees and transaction costs, which reduce the net return for the investor.
2 **Market efficiency**: Many financial markets are efficient, meaning that all available information is quickly incorporated into stock prices. It is therefore difficult to consistently outperform the market through stock selection.
3 **Trading activity**: Frequent buying and selling of securities leads to higher transaction costs and can also lead to poorer tax treatment (e.g. due to short-term capital gains being taxed at a higher rate).
4 **Human error**: Fund managers are human and can make mistakes. Emotional decisions, misjudging market conditions or missing trends can lead to poorer results.
5 **Benchmarking**: Many actively managed funds are compared to a benchmark index. Even if they beat the market, they may still underperform the benchmark after costs are deducted.
6 **Over-diversification**: Some funds diversify so much that they virtually mimic the market, but at a higher cost.
7 **Style drift**: Fund managers may deviate from the originally declared investment style, which can lead to unexpected results.
8 **Random and regression to the mean**: Over an extended period of time, extreme performance results tend to revert to average performance. Funds that have performed well once do not necessarily have a higher chance of doing so in the future.
There are of course exceptions, and some actively managed funds can achieve above-average returns, but statistically they tend not to beat market performance, especially after costs."
Actively managed funds perform statistically below average:
https://www.spglobal.com/spdji/en/research-insights/spiva/
https://www.justetf.com/de/news/geldanlage/der-beweis-aktive-manager-schlagen-den-markt-nicht.html
Why is that so? I asked Grok:
"Actively managed funds often underperform for a number of reasons:
1. **Costs**: Actively managed funds typically have higher fees than passively managed funds (like ETFs). These costs include management fees, performance fees and transaction costs, which reduce the net return for the investor.
2 **Market efficiency**: Many financial markets are efficient, meaning that all available information is quickly incorporated into stock prices. It is therefore difficult to consistently outperform the market through stock selection.
3 **Trading activity**: Frequent buying and selling of securities leads to higher transaction costs and can also lead to poorer tax treatment (e.g. due to short-term capital gains being taxed at a higher rate).
4 **Human error**: Fund managers are human and can make mistakes. Emotional decisions, misjudging market conditions or missing trends can lead to poorer results.
5 **Benchmarking**: Many actively managed funds are compared to a benchmark index. Even if they beat the market, they may still underperform the benchmark after costs are deducted.
6 **Over-diversification**: Some funds diversify so much that they virtually mimic the market, but at a higher cost.
7 **Style drift**: Fund managers may deviate from the originally declared investment style, which can lead to unexpected results.
8 **Random and regression to the mean**: Over an extended period of time, extreme performance results tend to revert to average performance. Funds that have performed well once do not necessarily have a higher chance of doing so in the future.
There are of course exceptions, and some actively managed funds can achieve above-average returns, but statistically they tend not to beat market performance, especially after costs."
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•@Stevoo13
In addition to poor returns, real estate has other negative characteristics. They are illiquid and have a cluster risk.
The worst of all worlds.
In addition to poor returns, real estate has other negative characteristics. They are illiquid and have a cluster risk.
The worst of all worlds.
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@Gehebeltes-EFH Nobody says that real estate returns are generated by sheer increases in value🙄
Of course, this can contribute to profits periodically, but I would exclude that.
The opportunities for returns lie in the high leverage and tax opportunities.
Nobody claimed that the first 50 advertisements on Immoscout would be profitable either🙄
Of course, this can contribute to profits periodically, but I would exclude that.
The opportunities for returns lie in the high leverage and tax opportunities.
Nobody claimed that the first 50 advertisements on Immoscout would be profitable either🙄
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@Malte123 What do you mean by tax options? 7i EStG?
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@Gehebeltes-EFH e.g. depreciation, the deduction of financing costs such as interest, repairs,...
With a high income, even very expensive, energy-optimized new buildings can become interesting due to government subsidies and grants.
In the case of private ownership, as opposed to limited liability companies, it could even be worthwhile to reduce your taxable income with a negative cash flow.
Of course, real estate involves risk and a lot of effort. For someone who already has a very good income and is very busy at work, it may not be worth the effort.
But for people who don't have a very high income (like me) and who don't mind the time commitment and stress, it can be very worthwhile.
With a high income, even very expensive, energy-optimized new buildings can become interesting due to government subsidies and grants.
In the case of private ownership, as opposed to limited liability companies, it could even be worthwhile to reduce your taxable income with a negative cash flow.
Of course, real estate involves risk and a lot of effort. For someone who already has a very good income and is very busy at work, it may not be worth the effort.
But for people who don't have a very high income (like me) and who don't mind the time commitment and stress, it can be very worthwhile.
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@Gehebeltes-EFH apple has always been n1 of the stocks for me every big etf bubble has a high apple share everything done right
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@TheInfluencer I recommend Ben Felix again: https://www.youtube.com/watch?v=I8gH5bR3clg
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