Building my long term ETF portfolio

[g2perk]

@jakeman23 True! Working on that!

 

[resjudicata]

@g2perk Hi, i have been living in Germany since 7 years. I want to invest in low cost index funds.
I know nothing about German Stock Exchange.

From where should i start. Any suggestions

 

[g2perk]

@resjudicata I would start by searching the most used brokers in Germany. And at the same time study ETFs, what they are, which ones exist what's the differences etc.

Look into portfolio diversification. Im still learning.

Usually time in the market beats everything. IWDA + EMIM or the Vanguard All world fund (the one which combines stocks in iwda with emerging) is a very good start. Then optimize as you learn. Your age and how many years are you planning to invest also change the allocations.

Check if Degiro operates in Germany and how taxes worth with it there. Interactive brokers is amazing too but I think it has some fees for portfolios with less than 100k.

Don't take all I said as fact, as I said I'm learning. But I decided do dive in as early as possible, when I felt comfortable.

 

[resjudicata]

@g2perk Thank you for your help.... i am very new ...there is much more to learn.... i was look8ng into German realestate ..but one thing i don't understand .... investment is like monthly? ?? Like if i am planning to invest do i have to invest every month ?

 

[jessika28]

@resjudicata This website is a pretty good all-round resource, it includes a decent list of European brokers. You don’t have to invest monthly, you can also invest lump sums.

 

[danielson0101]

@g2perk I think it's an very conservative portfolio for a 24 years old. I would put at least half of that in heavier technology sectors, particularly in disruptive ones (example: WTEJ). You're too young, use your time accordingly. And remember: reevaluate your portfolio every couple years. Don't get into the investment trap of "buy and forget", but practice "buy and hold" (reevaluating your choices periodically). Also, since you'll not be saving that much per month, look for a very cheap savings plan (better if it's free or cost just a few cents every month).

 

[g2perk]

@danielson0101 I would look into reevaluating yearly maybe. I really like your example ( WTEJ ).

I will look into some specific sector ETFs to add to the portfolio.

 

[danielson0101]

@g2perk I'm glad you're keeping an open mind. Some people are excessively focused on World ETFs, ignoring the rest of the market completely. And if someone suggests a more progressive ETF for a mid-term strategy, they get mad, downvote, etc. I think that's really sad, because it should be part of a balanced strategy to have both conservative and bit more modern ETFs, in a good mix. Sometimes we have to take care not to follow the herd.

 

[marissavchon61]

@danielson0101

Some people are excessively focused on World ETFs, ignoring the rest of the market completely.

How can someone ignore the market when they invest in worldwide diversified funds instead of niche products? Isn't the one investing in single sectors the one who's ignoring the market?

 

[amichan]

@marissavchon61 Isn't a core+satellite portfolio an existing thing? You build a buy and hold, diversified core portfolio and then with a few satellites try to expand into areas that you see potential in

80% core: for example IWDA (70%) + EMIM (10%)

20% satellite: IITU or WTEJ could work I guess

 

[marissavchon61]

@amichan That's of course possible but you're covering (almost) the whole market with IWDA + EMIM (or EIMI to include EM Small Caps) already. Adding more ETFs won't give you a wider diversified portfolio but just focus it on what you'd add as satellites.

"Ignoring the rest of the market" implies that you'd leave some or several bigger parts out which is just not the case with a strategy like IWDA + EMIM/EIMI or VGWL/VWCE.

 

[amichan]

@marissavchon61 Well yeah that would kind of be the point in my eyes with using satellites: to get more exposed to particular areas.

"Ignoring the rest of the market" implies that you'd leave some or several bigger parts out which is just not the case with a strategy like IWDA + EMIM/EIMI or VGWL/VWCE.

I agree with you, that is just incorrect phrasing

 

[jessika28]

@danielson0101 I would heavily caveat your answer: what insight do you have that everyone else doesn’t? If you don’t have anything, then it is already priced in, and a world allocation captures that already.

 

[metro]

@danielson0101 Why can I only find a crude oil ETF when looking up WTEJ?

 

[g2perk]

@metro

WTEJ

https://www.bloomberg.com/quote/WTEJ:GR

 

[joywillcome37]

@danielson0101

arket completely. And if someone suggests a more progressive ETF for a mid-term strategy, they get mad, downvote, etc. I think that's really sad, because it should be part of a balanced strategy to have both conservative and bit more modern ETFs, in a good mix. Sometimes we have to take care not to follow the herd.

Can you line out why you would recomend the WTEJ ETF?

 

[danielson0101]

@joywillcome37 A lot of companies won't be coming back to the traditional in-office work. And when we talk about home-office (be 1 or 2 days in the week or full time), a decent cloud structure is necessary. Therefore the prognosis is quite good for this sector during the next decade, and I certainly want to be more exposed to that.