ETF

After a period of deprivation and frugality, Luise has entered a phase of greater financial freedom. All her funds are in an ETF portfolio that averages a 7% return in the long term. Unfortunately, the 7% return is not constant and fluctuates significantly. Luise plans to withdraw a certain amount every month, either through dividends or by selling shares. Before I continue with a financial-themed story, I want to clarify that I’m not a financial expert. I’m just an individual who is interested in personal retirement planning and other financial topics, accumulating some solid half-knowledge along the way, and occasionally relying on my more or less sound common sense. From time to time I create or extend a calculator. ...

When calculating financial goals, it’s often assumed, like on the informative website Finanzfluss, that there’s a fixed annual return. In the suggested return range of around 5% to 7% per year, I dare to challenge the expectation of consistent returns without the fluctuations of stock investments. Therefore, I’ve briefly explored simulating stock prices and implemented a savings plan calculator based on this concept. The focus of this article is on the simulation aspect. However, please note that I haven’t consulted any books or experts – I’m just here for fun. ...

Various channels claim that rebalancing your stock portfolio increases your return on investment. In this article, I will present the analysis of historical data on geographic allocations of the popular indices MSCI World and MSCI Emerging Markets. 2 remarks before we start: This article was translated from German to English in collaboration between man and machine *To be honest, I was a little disappointed by the translation performance of translate.google.com. Even though I am talking finance in this article, I’m not a finance expert at all. I’m just a private individual who is interested in their own pension scheme and other financial topics. So I accumulate solid half-knowledge and rely on my more or less common sense and program a calculator1,2 every now and then. Let a world portfolio be given Suppose a person, let’s call her Elisa, wants to benefit from the global capital market for her retirement. Her effort should be as limited as possible. Now Elisa hears that ETFs can be used to easily benefit from profits of public companies all around the world. An index called MSCI ACWI and ETFs that try to replicate this seem suitable to Elisa at first glance. However, Elisa notes that the MSCI ACWI includes more than 50% shares in US companies. Represent the US really half the global economy? Following the criterion of market capitalization used here, definitively. There are other criteria for tracking the global economy, see, e.g., Justetf. A popular alternative to 100% ACWI includes the MSCI World Index at 70% and the MSCI Emerging Markets Index at 30%. ...

How can you generate passive income from return on stock market investments or dividends*Dividends are of course also a kind of investment income. I just wanted to mention them again because they play a special role in this article. and when does that make sense? In addition to explanations and anecdotes, I also present mathematical formulas to answer this question🥳*That's a smiley celebrating the existence of math in this article.. ...