Fiddling about with stocks, funds, etc. No conspiracy theories, please.

[fraufruit 42,165]

So it has been mentioned that we should have a thread dedicated to personal investments in stocks, funds. ETF's, etc.

 

What are you investing in? Are you interested in investing but don't know where to start?

I think we have a lot of people here who are interested in this so I just wanted to get the ball rolling.

 

As for me, I have several investments in the U.S. It is all part of my retirement plan along with a rental property in Munich. I don't think that I can give a whole lot of advice but would like to hear from others.

 

Currently, I am buying shares of GE while it is going down. I have been invested in GE since 2002 and since it hasn't been doing well lately, I am trying to get my cost basis down a bit. I am confident that it will get back up to at least $50 in the not so distant future. I picked up another 100 shares yesterday at $16.93 and have another order to pick up another 100 at $15.20.

 

What are the rest of you doing now with the almost 9 year bull market. Taking some off the table? Still investing? 

[Ben21 54]

The rule generally is not to make individual stocks a large part of your investment portfolio as they’re incredibly risky (all it takes is a scandal à la Enron and your investment is gone), and you shouldn’t take past performance as indicators of future performance. Most financial experts recommend investing in index funds / ETFs which essentially are made up of hundreds/thousands of fractions of shares in widely-diverse areas. This greatly balances out your risk as one company, or even one sector tanking is not going to result in you losing much. The downside though is that it’s fairly rare to see huge gains, but if you invest long term, the average return of the stock market is around 7-8%.

 

With that said, my portfolio mainly consists of the aforementioned “total stock market” index funds from Vanguard in my old US 401k. I’m also looking at starting to send more money back and invest more for retirement as it’s the only real avenue US citizens have for investing while abroad. I would do some googling for ETFs and how they might work for you in your situation. There’s a lot of “investing for dummies” guides which helped me out tremendously on sites like Bogglehead and on some of the finance subreddits (Personal Finance and Financial Independence).

 

And I’m sure you’re aware of this, and I’m assuming you still have a US passport, but don’t even try investing here outside of property. The Fed makes it literally hell on us and financial institutions to hold foreign investments...

 

Edit: Just read my post again and it sounds like I’m responding directly to fraufruit. Wanted to clarify that “you” here does not necessarily mean OP, but rather anyone reading this in a similar situation.

[john g. 37,775]

Good post, Ben!

Diversity and long term monthly ups and downs MAY work out  ( stress on MAY and LONG TERM )...Cost Average Effect in general parlance...different one in the US:

 

https://en.wikipedia.org/wiki/Dollar_cost_averaging

Main thing in our lives: sort out the health risks eg health insurance, income protection in case of severe illnesses/diseases/accidents, life insurance stuff to protect immediate family members, personal liability insurance ( without which you can end up bankrupt if the worst comes to the worst )..and then consider how to improve your income long term....

 

Plus enjoy life anyway...

I am a professional independent insurance broker and authorised advertiser. Contact me.

[fraufruit 42,165]

Good points Ben and John g. 

 

I do have individual stocks as well as funds, and ETFs. I have a separate tool with 5 ETFs (Focus Five) and another separate tool (Tactical Growth) which invests in several stocks, buying and selling as needed. My personal financial manager manages them and I trust him. He is also invested in both. They are both doing well but the fees are a bit high. Then I have my "old account" with stocks and funds and ETFs that I've bought myself over the years. To balance out, I like to keep a lot of cash on hand as well. That way, when the market drops, I feel like I make money on my cash because it isn't invested.

 

I've sat out the "Enrons" and crashes without taking a beating. Just didn't sell anything. Did pick up a few bargains.

 

I don't think this bull market can hold out much longer. What are other's opinions?

 

 

[Guest]

48 minutes ago, fraufruit said:

I don't think this bull market can hold out much longer. What are other's opinions?

 

I quite agree, which is why I / we have divested quite a bit of our stock holdings recently.

I have two investment " funds". One is managed by my financial manager / brokerage firm, ( with some conditions they must follow, as in so and so many % in ETF's , stocks, etc ) the other is my  KMGB fund which I manage personally to keep my hand in.

If and when the market drops, ( or not ) I will buy / spread more or less equally between both, though I would rather it happened sooner rather than later as I am a bit liquid at the moment due to selling and BTC cashing in

Following a number / some of the Norwegian Wealth fund stock investments has been going well for me, particularly in 2017. They did better than most managed funds.

I will follow their lead and divest from Oil & Gas, but not quite yet.

 

 

[fraufruit 42,165]

On 1/19/2018, 9:14:44, Ben21 said:

if you invest long term, the average return of the stock market is around 7-8%.

 

My long and short term unrealized gains are a whole lot more than that. Of course I have all dividends, etc. automatically reinvested and have done for years.

[jeba 4,363]

I´m betting on Reits and energy infrastructure (natural gas, pipelines) as there are nice dividend yields to be had and those sectors haven´t really participated in the rallye so they are reasonably priced. The latter mainly in the US, not least because I don´t have confidence that the Euro will prevail (e. g. if eurosceptics will win the Italian election). Granted, it hasn´t turned out to be a good idea for the last couple of years (energy bear market, falling dollar) but I´m still sticking to it as I don´t know of safer/better alternatives that have enough yield.

[theGman 3,520]

I am completely new to this. Literally just "started" two weeks ago. Our bank balance has been slowly going up over the years, but it's nowhere near enough to get a property in Munich (we will only buy to live, not buy to let). Therefore I don't really see any other option. I have a comdirect bank account so I simply signed up to their depot. So far so good. I stuck a few hundred euros into an EFT just so I can see how the platform works and the how fees behave. But what I have also done is put some money into "cominvest". For a small monthly fee they will invest for me but (Wir für Sie program) and, most importantly, I can see exactly what is is they are doing through the online platform. By watching that, I'm hoping I can learn how to build my own portfolio a bit over the next few years.

[fraufruit 42,165]

Well done, Gman. Let us know how it goes.

 

Does the small monthly fee cover their commissions on buying, selling, re-investing dividends, etc.?

[theGman 3,520]

At this point Fraufruit, I really don't know. It's probably in the small print somewhere but I can't even be bothered to check it out to be honest. The money (I've only put in the minimum €3000 so far) is doing nothing in my bank account, so unless they somehow lose it all I thought it's got to be worth a go...to start somewhere. For me right now, this is as much a learning tool as an investment.

[Starshollow 6,069]

my ten Cents of wisdom as a professional investment advisor:

a) rather invest in funds who spread your money and risk over a large number of shares/stocks than picking your own stocks. As a great advisor once said to me: if you wake up in the morning, go to the bathroom and look in the mirror and it is not Warren Buffet starring back at you out of the mirror...stay away from stock-investing :-)

b ) when investing in funds, keep costs low. Which usually leads to passive investment funds like ETFs/Index funds.   Actively managed funds simply on average and especially on the long run do not beat the markets consistently enough to bring any value to the extra costs they'll charge you.  Dimensional Funds (another form of passive investment funds) could also be an alternative if you are willing to pay an advisor for advice and assistance.

c ) when investing in ETFs/Index funds, only chose those that are "fully replicating", which means they actually invest in the stocks/shares that the index is made of. Many other ETFs are based on swaps and other artificial means of "re-creating" the index. Come the next major crash on the stock markets, a lot of people will wake up wondering why their ETFs fare much worse than the actual index (while some lucky one might even see that their ETF is outperforming the index), because the underlying bets did not work out so well.

d ) time in the market is more important than timing the market: once you decided to invest, stay the course and do not get tempted to sell (and later re-invest) at the wrong moments...and trust me, most of the time you will definitely pick the wrong moment. Just stay invested and let the markets take their course..and your investment with them. 

 

As a service to the Toytown community I am offering those active in this thread (and limited timewise til February 15th 2018) access to our professional investor-type assessment tool from Finametrica (the currently world's best survey where a professional advisor and his clients can assess what kind of investor the client is (affinity or adversity towards risks in investment). The outcome gives you (and/or your advisor) a chance to set up an investment portfolio in line with your personality, i.e. balancing it between low-risk investments like bonds and higher-risk investments like investment funds into stocks so that you should always be comfortable with the up and down of the markets. Just PM me your email-address and I'll send you an invitation for free to take part in such an assessment. You'll get a detailed assessment report out of that which you are free to use for yourself in the future.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.

[Guest]

Interesting story and I, for one, hope he collects

 

Elon Musk takes aim at £40bn payday - the world's biggest bonus

 

Musk will become planet’s richest man if he turns Tesla into a $650bn business in a decade

Elon Musk, the founder and chief executive of electric car company Tesla, would smash all pay records and become the richest man in the world if an extraordinarily ambitious new incentive scheme pays out.

The 46-year-old entrepreneur, who is already a multi-billionaire, has agreed to work unpaid for the next 10 years – after which he would collect an unprecedented $55.8bn (£40bn) bonus if builds the 14-year-old business into a $650bn company within a decade.

 

Yes, I have some Tesla Stocks 

 

[fraufruit 42,165]

Everything I've been reading says the cars are crap. Just saw another story on the Tesla X. Many people suing and getting their money back. Of course, cars aren't his only business.

 

@Starshollow, thank you so much for the tips and your very kind offer. Hopefully some of the newbies will take advantage. I'm pretty well set so far.

[Ben21 54]

On 1/23/2018, 9:01:46, Starshollow said:

 

As a service to the Toytown community I am offering those active in this thread (and limited timewise til February 15th 2018) access to our professional investor-type assessment tool from Finametrica (the currently world's best survey where a professional advisor and his clients can assess what kind of investor the client is (affinity or adversity towards risks in investment). The outcome gives you (and/or your advisor) a chance to set up an investment portfolio in line with your personality, i.e. balancing it between low-risk investments like bonds and higher-risk investments like investment funds into stocks so that you should always be comfortable with the up and down of the markets. Just PM me your email-address and I'll send you an invitation for free to take part in such an assessment. You'll get a detailed assessment report out of that which you are free to use for yourself in the future.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.

 

Thanks for the offer Starshollow. Had a chance to run through the report today and it was about what I expected as far as risk is concerned. Was really nice to see some of my thoughts visualized though.

 

If anyone else wants a nice overview of their own personal risk tolerance, I’d highly recommend reaching out to Starshollow and taking him up on his offer.

 

Thanks again!

[Starshollow 6,069]

18 hours ago, Ben21 said:

 

Thanks for the offer Starshollow. Had a chance to run through the report today and it was about what I expected as far as risk is concerned. Was really nice to see some of my thoughts visualized though.

 

If anyone else wants a nice overview of their own personal risk tolerance, I’d highly recommend reaching out to Starshollow and taking him up on his offer.

 

Thanks again!

 

The great value of this report is not only getting to know yourself much better with regards to you being an investor (though I experience more often than not that folk's self-perception is not exactly in line with how they really tick), but also that it then gives you a pretty good guideline on how to structure your investment portfolio. While obviously more than just your investor type comes into the total decision making (one would also have to regard your current financial situation, plans for your career development as well as general plans for the next 10-20 years in your life that involve some financial issues), if you follow that general results, you can't go much wrong.

 

What do I mean with that ?  I can explain that best with an example here. In this example someone reached a final result that put him pretty much in the middle of the scope, in a risk/chance-group 4 out of 7 possible. 

 

This breaks down to an ideal spread of investments along general risks from stocks (high risk) to bonds (low risk).

 

So, in this example here, the investor - ceteris paribus - should/could invest 30% of his assets in higher risk investments such as stocks (ideally in the form of investments funds), 40% in medium risk investments (which could be some mixed mutual funds or other forms of somewhat reduced risks) and 30% in low-risk investments, which could be investing into bonds from very stable countries and blue-chip enterprises.  As a next step one would have to factor in the person's goals and wishes for the next 10-20 years and, of course, what other assets are already in existence that belong in either of the these risk groups in order to find a total structure of investments that fits like a glove to that person.

In the end we would want him to be in the green "comfort zone" for his total investments.  With couples, where often the investor profile can be very different to each other, we  sometimes have to find something overlapping in the green-to-yellow zone. 

 

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.

[Maarsch 97]

We got some small amount of money in S&P500, DAX, Nikkei ETFs.
And an even smaller amount of money in AI, drone and biotech etf.

 

We can't put the time in to understand how this works and on top of that pick winners. So, we follow the market, and while Warren Buffet isn't looking back at me from my mirror that is advise he gave (or something to that effect).

 

On top of that I put €200 in crypto which is currently sitting at €600

Though I have even less of an idea of how that works and certainly won't be investing serious money in that.

 

We won't be retiring of any of this, but so far it's beaten whatever pitiful return our bank offers quite handily.

[Maarsch 97]

However, there are quite a few S&P/DAX/etc ETFs and I wouldn't mind becoming better versed at picking the right one

 

On 1/23/2018, 9:01:46, Starshollow said:

c ) when investing in ETFs/Index funds, only chose those that are "fully replicating", which means they actually invest in the stocks/shares that the index is made of. Many other ETFs are based on swaps and other artificial means of "re-creating" the index. Come the next major crash on the stock markets, a lot of people will wake up wondering why their ETFs fare much worse than the actual index (while some lucky one might even see that their ETF is outperforming the index), because the underlying bets did not work out so well.

 

I was not aware there was a fully replicating or re-creating criteria. 
I dont' know if there's other things I should be looking at.
I don't know how this information is conveyed in the fund name/info sheet

 

So I wouldn't mind learning more.

 

I do have a steuerberater who gets to deal with this new "sell it all every Dec 31st, buy it every Jan 1st" thing, but I don't know if that should impact my strategy

[Starshollow 6,069]

@Maarsch: let me know the ID-numbers of your ETFs and I can tell you if they are fully replicating or not. Fair enough ?

 

Cheerio

 

PS: while it is certainly better to invest than not investing at all, you limit your current portfolio too much to three regions in the world, the USA, Japan and Germany. That leaves you more vulnerable to ups and downs in this regions (i.e. you are less diversified than would be recommendable). I would strongly recommend to exchange them to one world wide (which always means there will be a strong share in it from the US) and then you can add some regions that you want to overweigh yourself if you feel like it.  Right now you are leaving out most of Europe, most of Asia (including China and India!)  and all of Latinamerika and Africa in your selection

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.

[AlexCLE 56]

For those of you that are still US citizens but permanent residents in Germany, is this a problem concerning your US-based investments? Is there some rule/law about maintaining a US address?

 

This is a great post as I'm currently looking at investment options. It seems like ETF's are the way to go. I recently looked at Vanguard and the yearly fee was something like only .04%. This seems crazy low to me; am I missing something? I think there are also fees when buying and selling shares but they are not much if you do it only occasionally.

[Starshollow 6,069]

36 minutes ago, AlexCLE said:

For those of you that are still US citizens but permanent residents in Germany, is this a problem concerning your US-based investments? Is there some rule/law about maintaining a US address?

 

This is a great post as I'm currently looking at investment options. It seems like ETF's are the way to go. I recently looked at Vanguard and the yearly fee was something like only .04%. This seems crazy low to me; am I missing something? I think there are also fees when buying and selling shares but they are not much if you do it only occasionally.

 

you might be facing two problems:

- some US-domiciled funds are not available for residents of Germany. This is, for instance, currently true for Dimensional Fund Advisors (DFA) but also a number of other funds, both passive and actively managed. Not sure if the Vanguard US-domiciled funds are available in Germany, yet?

- US-domiciled funds will most of the time need to be "parked" at a US_based bank or platform. From all I know, more and more banks and platforms have caved in and will not accept non-US-residents anymore for fear of failing to comply with "know your client" regulations.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.