When valuation levels fall, future return expectations rise. So, it’s precisely at such times that one should buy more. If one cannot tolerate volatility, meaning that prices rise and fall, it’s worth considering whether the stock allocation is too high.
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I don’t know what is worthwhile and what isn’t, but the matter could of course be considered
- through historical data (efficient frontier), such a tool for researching ETF portfolios exists: Curvo Backtesting for the European index investor. It quickly seemed that the data for that India ETF was only a couple of years old, so it’s difficult to draw good conclusions.
- Through earnings forecasts
- Through valuation levels, even if some P/E fwd per index (or ETF) vs. the index’s long-term average
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MDAX (the next 50 after DAX) and SDAX (the next 70 after MDAX). There’s a decent product for MDAX. For SDAX, there’s only an expensive dividend-distributing one, but you can still take a slightly shorter-term view with it.
Invesco MDAX® ETF Acc – compare and buy exchange-traded funds | Nordnet
Amundi SDAX UCITS ETF Dist – compare and buy exchange-traded funds | Nordnet
ZPRX came to mind first, but it had a surprisingly small Germany weighting
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I have been investing for about 5 years now in EUNL+IS3N with a 90/10 ratio. Most of my assets are tied up in that combination; excitement can then be sought with stocks and other riskier products.
I am very puzzled by this current discussion. The ABCs of index investing have always been to buy and forget, regardless of world events and stock charts. Yet, now that a correction has occurred, I see countless questions about whether one should sell diversified funds and buy European funds or other trend funds.
If your investment horizon is +10-20 years, it’s not worth it. It’s advisable to continue in the same style as before. A sale is underway.
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Most of those here who have discarded their global index have, to my understanding, done so in protest of the policies of those in power in the USA, not so much for investment strategic reasons. The USA weightings of global indices have been hovering around 50% levels.
This is at least what I did, well aware of what you wrote. I switched to EXUS and EUR indices. The only place where US exposure still remains to some extent is one defense fund.
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I personally thought I’d sell at the peak (succeeded) and then buy back at the bottom. I don’t know if it will work, but it’s a winning plan nonetheless.
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That is precisely not a winning plan, even if it might sometimes succeed by luck.
I would only celebrate at that point when you have gotten the shares back so much cheaper that the trade was successful, taking taxes and costs into account.
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This topic has likely been touched upon: how many ETF/vst funds are there in the world, and what kind of automated buying system has the system managed to develop for S&P 500 and Nasdaq 100 stocks (units, xxx million per month) that sustains demand for these stocks?
Are index funds a silent disruptor? Or are the concerns overblown? In this grab-your-popcorn episode, Michael Green returns to the show after his previous appearance elicited a wave of compelling feedback from listeners. These included very smart individuals in academia and practice who were interested in hearing a counter perspective. Joining Michael today for a lively debate is Randolph Cohen, Senior Lecturer of Entrepreneurial Management in the Finance Unit at Harvard Business School. In our conversation, Michael shares his deep concerns about how index funds and target-date funds might be distorting financial markets, honing in on the tension between market efficiency and price elasticity. Randolph counters with an academically grounded perspective, drawing on his PhD and years of research and teaching at one of the world’s leading business schools. With Ben and Cameron moderating, the discussion explores both sides without reaching a definitive conclusion. Tune in to witness this spirited, nuanced exchange and decide where you stand!
There is also a thread on RR about the topic.
https://community.rationalreminder.ca/t/episode-332-randolph-cohen-michael-green-how-concerned-should-we-be-about-index-funds/33291?u=citizenj
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Have I misunderstood something, when Nordnet’s Maailma 125 is, in my opinion, a really affordable leveraged world index even with current interest rates?
Of Nordnet’s unleveraged options, the most affordable in terms of fees is Amundi World with a 0.12% fee, and Maailma 125’s fee is 0.49%. The difference is 0.37%.
If we simplify things a bit, the cost of borrowed money becomes a fixed interest rate of 4 x 0.37% = 1.48%/year.
Here I’m not taking a stance on the fund’s distribution, etc.
(I picked up Maailma 125 on 20.3 with about a 3% share of the portfolio).
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Leverage is not free for the fund.
In addition, at least Nordnet’s World and USA funds seem quite expensive in terms of actual costs.
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I am considering selling some index funds investing in the United States. “Fortunately,” I have unused capital losses, so there will be no tax implications. But what to replace them with? Tell me your best ideas. Preferably ETF or index funds.
My relatively boring ideas:
- Spiltan Aktiefond Investmentbolag
- Spiltan Globalfond Investmentbolag
- Spiltan Småbolagsfond
- Swedbank Robur Emerging Europe A
- Storebrand Europa A
- Nordnet suomi indeksi
Yes, Spiltan Globalfond Investmentbolag includes US stocks, but much less (52%) than many other global funds. In addition, the fund invests in investment companies and similar firms which perhaps know how to make investment decisions even in the current global situation. Berkshire Hathaway as the largest holding.
What is presented here is not and should not be construed as an investment recommendation or an invitation to subscribe, buy, or sell securities.
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Germany’s stimulus will likely spill over to Sweden, so here are my suggestions:
XACT OMXS30 ESG ETF
XACT Svenska Småbolag
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When you say you would sell funds investing in the USA, do you also mean global index funds? Or if you don’t have them, would you sell those too?
I myself have thought about keeping global index funds, but the Nasdaq 100 ETF is definitely under consideration for selling.
It only concerns US funds. And even of those, only the part I can sell by utilizing losses from previous years’ stock blunders. So, at least in my opinion, I have a really significant weighting of investments in the United States, which is why Trump’s antics are making me a little worried. The intention is to lighten that US weighting as much as I reasonably can without tax consequences.
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The monthly addition to the world index fund continues for me, regardless of temporary price changes. I’ve accumulated a good amount of cash, and if we start seeing drops in the tens of percentages, I’ll generously increase my monthly contributions. I intend to hold my investments for at least another 30 years, and I believe we will recover from this dip as well. The fund itself constantly adjusts its weightings according to prices, and I believe that by adjusting the weightings myself, I wouldn’t be able to achieve better returns anyway.
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What are some low-cost ETFs or index funds if you want to directly buy, for example, a Swedish index? Those funds get listed at some point. I trade on Nordnet.
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I know that, yes, thanks. But I was looking for something whose order execution happens immediately. Doesn’t seem like there’s anything sensible.
XACT OMXS30 ESG (UCITS ETF) this kind of purchase is probably 110 SEK, I don’t really know other costs for this.
There’s another option, but that’s about it.
XACT Svenska Småbolag – Compare and buy exchange-traded funds | Nordnet
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