What type of investment strategy suits you?


And so the fight goes on. What is better now? Active or passive investments? Should you buy individual stocks or should you rather lconsiderĀ  ETFs? Everyone has different opinions. But is there any one right answer to this question? No, it depends primarily on your personal goals and your personal commitment to the chosen investment strategy. It is much more important to answer this question: which investment strategy suits you?

Single shares or ETFs?

Let me first of all define what I mean by individual stocks or ETFs: in both cases, I am only interested in long-term equity market investments with the aim of building up wealth. Ideally, the stocks or ETFs are bought and held long-term under the buy-and-hold strategy. I have selected a few factors for both investment strategies that will help me compare the two investment strategies: Target Return, Commitment, Investment Amount, Cost and Risk / Spread.

Which investment strategy is better? – My conclusion

Both passive investments in ETFs as well as the purchase of individual shares are in my eyes good opportunities to build assets (even for private investors) . The most important criteria are the amount of your budget and youe preferences. If you do not want to deal with the stock exchange or individual companies , you should simply avoid single shares completely. T

Does it make sense to pursue both investment strategies at the same time?

Wellt depends on how you do it. In my opinion, it makes no sense to hold a global ETF portfolio while still investing in individual stocks around the world. What should be the goal of this approach? Either my goal is to replicate the development of the market (ETFs) or I trust that I can achieve a better performance than the market return (single stocks).

The pursuit of both investment strategies – according to me – ultimately leads to nothing.

If you think that you can invest better than the market, you should invest everything with the “better return”. If you do not think so, you should invest all your money in ETFs.

My investment strategy?

I follow the active approach with my dividend strategy, and I believe that in the long run I will achieve a higher return on investment with this strategy. Depending on how often I invest, only transaction costs are incurred. However, in the last 2 years, I’ve done very few transactions. In addition to the dividend strategy, I cover the emerging markets with a small additional ETF. This is because I do not know much about these amrkets at the time I am investing and therefore I prefer to invest in the entire market. With this approach, the “established” companies in Europe and the USA have long since generated significant revenues in the emerging markets.

Which investment strategy do you pursue?