Have ETFs Hit The Top For 2024?

Summary

The video script discusses the performance of the speaker's Global ETF, which has seen a 14.62% return in the first half of the year, double the long-term average. Despite the expectation of a market correction, the speaker outlines factors that could drive the market upwards, including the US election year effect and potential interest rate drops. The speaker also shares their strategy for managing freed-up cash, including investing in ETFs, speculative assets like Bitcoin, and keeping a portion in a high-yield savings account. The script concludes with a cautionary note on the high-risk nature of crypto investments.

Takeaways

• 📈 The speaker's Global ETF has seen a significant increase of 14.62% in the first half of the year, which is double the long-term average of 7% per year.
• 🌐 Despite the positive performance, the speaker does not believe the market's upward trend will necessarily cease, citing potential headwinds that could drive the market further upwards.
• 📊 The speaker reviews the performance of their ETFs in June and shares the current status of their exit from peer-to-peer lending.
• 💰 The speaker has a strategy for the freed-up cash from their bank account, which they will not let pile up uninvested.
• 🏦 The Vanguard Total World ETF, which is the main ETF in the speaker's portfolio, has risen by 3.51% in June, contributing to the overall positive performance.
• 📉 The speaker mentions that while a market correction of around 10% is overdue, investor sentiment is not overly bullish, as indicated by the fear and greed index, suggesting the rally may continue.
• 🗳️ The speaker notes that election years in the US, such as the current one, tend to be positive for the stock market, especially towards the end of the year.
• 💹 The expected interest rate drop by the Federal Reserve and the subsequent increase in liquidity could further boost the market, particularly the US market, which significantly impacts the speaker's returns.
• 🌳 The speaker's long-term investment strategy involves buying more Global ETF shares on a monthly basis, regardless of market conditions or news.
• 💬 The speaker shares their experience with Trade Republic, a broker they use for both buying ETFs and as a high-yield savings account, highlighting the benefits of the platform.
• 🚨 The speaker warns of the high-risk nature of their speculative allocation to Bitcoin and Ethereum, which have performed poorly recently, and advises that crypto should only be a small part of one's portfolio.

Q & A

What is the performance of the Global ETF for the first half of the year 2024?

The Global ETF has performed well, standing at a 14.62% increase in the first half of 2024, which is double the long-term average of 7% per year.

How does the current ETF performance compare to the historical average?

The current ETF performance is significantly higher than the historical average, with a 14.62% increase in just six months compared to the average annual increase of 7%.

What are the potential headwinds that could drive the market further upwards in the coming months?

The potential headwinds include investor sentiment, election years in the US, and the expected interest rate drop by the Federal Reserve, which could increase liquidity and boost the market.

What is the current year-to-date return of the Vanguard Total World ETF?

The Vanguard Total World ETF has a year-to-date return of 41,000 euros as of June 2024.

How does the speaker's investment strategy in ETFs work?

The speaker's investment strategy involves buying more Global ETF shares on a monthly basis regardless of market conditions or news.

What is the speaker's current total investment in globally diversified, low-cost ETFs?

The speaker's current total investment in globally diversified, low-cost ETFs is over 332,000 euros.

How does the speaker view the current investor sentiment in relation to the market rally?

The speaker notes that investor sentiment, as indicated by the fear and greed index, is currently hovering between fear and neutral, suggesting that the rally may not be over yet.

What is the speaker's experience with Trade Republic as a broker and high-yield savings account?

The speaker uses Trade Republic not only to buy ETFs but also as a high-yield savings account, benefiting from the 3.75% per year interest rate passed on by the broker, secured by a €100,000 bank deposit guarantee.

What is the speaker's process for exiting peer-to-peer lending platforms?

The speaker's process involves selling loans on secondary markets, disabling auto-invest strategies, and withdrawing funds as they become available or are repaid from loans.

How much of the speaker's peer-to-peer investments has been withdrawn so far?

The speaker has been able to withdraw 23,450 euros, which is more than half of the sum invested in the peer-to-peer sector, within less than two weeks of stopping the investments.

What is the speaker's strategy for the cash freed up from exiting peer-to-peer investments?

The speaker plans to invest 80% into globally diversified, low-cost ETFs, 10% into speculative assets like Bitcoin, and keep the remaining 10% in cash in a Trade Republic account earning 3.75% interest per year.

How has the performance of Bitcoin and Ethereum been in June and early July 2024 according to the speaker?

Both Bitcoin and Ethereum have performed poorly, with drops of 5 to 7% in June and further declines in the first week of July, pushing their 2024 returns down to 35.6% and 33%, respectively.

Outlines

00:00

📈 YTD ETF Performance and Market Outlook

The script opens with a reflection on the first half of the year, highlighting the impressive performance of the Global ETF, which has seen a 14.62% return in just six months, surpassing the long-term average of 7% per year. Despite the expectation of a market correction, the speaker does not anticipate a significant downturn due to several factors, including investor sentiment and the potential positive impact of the US election year and the Federal Reserve's expected interest rate drop. The speaker emphasizes a consistent long-term investment strategy, which involves buying more global ETF shares monthly, regardless of market conditions or news.

05:00

💰 Portfolio Diversification and P2P Exit Strategy

The second paragraph delves into the speaker's personal investment portfolio, including the decision to exit peer-to-peer lending platforms. The speaker provides an update on the process of withdrawing funds from various P2P platforms, detailing the ease and speed of the process on some platforms like Robocash and the more gradual withdrawal from others like V-invest and Davum. The speaker's strategy for reallocating the withdrawn funds involves investing 80% into globally diversified low-cost ETFs, 10% into speculative assets like Bitcoin, and keeping 10% in cash in a high-yield savings account. The paragraph also touches on the speaker's speculative investments in Bitcoin and Ethereum, which have experienced a downturn in June, but the speaker remains optimistic about their potential performance for the rest of the year.

Keywords

💡Global ETF

A Global ETF, or Exchange-Traded Fund, is an investment fund that is traded on stock exchanges, much like individual stocks. They hold assets from various countries, providing investors with a diversified portfolio that spans across the globe. In the video, the presenter mentions that their Global ETF has performed well, standing at a 14.62% increase in just six months, which is a significant achievement in the context of the video's theme of investment performance.

💡Long-term average

The long-term average refers to the mean performance or return over an extended period, often used as a benchmark for evaluating investment performance. In the script, the presenter compares the ETF's 14.62% gain to the long-term average of 7% per year, highlighting that the ETF has outperformed the historical norm, which is a key point in the video's narrative on investment success.

💡Headwinds

In the context of finance, 'headwinds' are factors or conditions that may act against an investor's interests, potentially slowing down or reversing the positive momentum of an investment. However, in the script, the term is used to suggest that certain challenges or obstacles are likely to drive the market further upwards, which is a unique perspective and a central point in the discussion of market trends.

💡Fear and Greed Index

The Fear and Greed Index is a measure used by investors to gauge market sentiment, typically ranging from extreme fear to extreme greed. In the video, the presenter notes that the index is hovering between fear and neutral, suggesting that investor sentiment is not overly bullish, which is relevant to the video's theme of market analysis and future predictions.

💡Election years

Election years refer to the periods during which general elections are held, and they can have significant impacts on financial markets due to the potential for policy changes and political uncertainty. The script mentions that US election years tend to be positive for the stock market, especially in the last few months, which is a key insight into the video's discussion of market influences.

💡Interest rate drop

An interest rate drop refers to a decrease in the rates charged by central banks for loans to commercial banks. In the video, the presenter anticipates a drop in interest rates by the Federal Reserve, which is expected to increase market liquidity and potentially boost the market. This concept is integral to the video's analysis of economic factors affecting investment returns.

💡Trade Republic

Trade Republic is mentioned in the script as a broker that the presenter uses for various financial activities, including buying ETFs and as a high-yield savings account. The platform's ability to pass on the ECB interest rate and its recent introduction of fully featured bank accounts are highlighted, showing its relevance to the video's theme of diversified investment strategies.

💡Peer-to-peer lending

Peer-to-peer lending, often abbreviated as P2P lending, is a method of debt financing that allows individuals to borrow and lend money without the use of an official financial institution as an intermediary. In the script, the presenter discusses their exit strategy from P2P lending platforms, which is a significant part of the video's narrative on investment diversification and risk management.

💡Speculative assets

Speculative assets are investments that are considered high risk but have the potential for high returns, such as cryptocurrencies or certain stocks. The script mentions Bitcoin and Ethereum as speculative assets that the presenter has a small allocation to, illustrating the video's theme of balancing a portfolio with a mix of稳健 investments and high-risk, high-reward opportunities.

💡Diversification

Diversification is an investment strategy that involves spreading investments across various financial instruments, industries, and other categories to minimize risk. The video emphasizes the presenter's strategy of investing in globally diversified low-cost ETFs, which is a central concept in the video's message about managing investment risk.

💡Risk management

Risk management in investing involves the identification, evaluation, and prioritization of risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. The script discusses the presenter's approach to risk by allocating a small percentage to speculative assets and keeping some funds in cash, which is a key element in the video's overarching theme of prudent investment practices.

Highlights

The Global ETF is up 14.62% in the first half of 2024, doubling the long-term average of 7% per year.

Several factors could drive the market further upwards in the coming months, including potential interest rate drops by the Fed and increased liquidity.

The speaker's main ETF, Vanguard FTSE All-World, increased by 3.51% in June and is up 14.62% since the start of 2024.

The ETF portfolio has an average return of 10.89% per year since 2017, now totaling over €332,000.

Despite market rallies, investor sentiment remains between fear and neutral, suggesting the rally might continue.

Election years in the US typically see positive stock market performance, especially in the last few months of the year.

The speaker continues to invest in global ETFs on a monthly basis regardless of market conditions or news.

Trade Republic offers a high-yield savings account with an ECB interest rate of 3.75% per year on uninvested cash, secured by a €100,000 bank deposit guarantee.

The speaker earned €70.69 in interest and €14 in cashback from Trade Republic in June, which was reinvested into their ETF.

Exiting peer-to-peer lending investments has been relatively easy, with substantial funds withdrawn from various platforms without major fees.

The speaker's investment strategy for freed-up cash is to allocate 80% into globally diversified low-cost ETFs, 10% into speculative assets like Bitcoin, and 10% into cash.

Bitcoin and Ethereum performed poorly in June, dropping between 5-7%, with further declines in early July.

Despite recent drops, the speaker expects Bitcoin and Ethereum to perform well over the rest of the year based on past market cycles.

The speaker emphasizes that crypto investments should only make up a small percentage of a portfolio due to high risk.

The speaker's long-term investment strategy remains unchanged since 2017, focusing on regular investments in global ETFs.

Transcripts

so the first half of the year is done

and the stock market is still moving

higher with our Global ETF standing at

Plus 14.62% in only 6 months since

that's double the long-term average of

7% per year that's surely it for the

rest of the year right well not

necessarily there are a few headwinds

which are likely to drive the market

further upwards over the coming months

which will get to today as usual we'll

also take a closer look at how my ETFs

perform in actual numbers in June and

how my exit from peer-to-peer Landing is

going in case you're here in about this

for the first time make sure you check

out my recent video for more context

since I'm not planning on having over

42,000 piling up on my bank account

uninvested I'll also tell you where I'm

moving this freed up cash instead let's

begin by looking at stocks in the form

of ETFs the largest portion of the

Investment Portfolio I share with my

wife our main ETF the Vanguard foty all

World continued moving higher Plus 3.51%

in June and is now up 14.62% since the

start of 2024 as for our ETF portfolio

in actual numbers with an average return

of 10.89% per year since 2017 we're now

sitting at over €

332,000 in globally Diversified lowcost

ETFs with a year-to-date return of plus

41,000 since it feels like the market

has gone up pretty much non-stop since

2023 many are expecting this rally to

end sometime soon and while that would

not surprise me as a correction of

around 10% is long overdue as those tend

to happen on a regular basis investor

sentiment is not as bull bullish as you

may think when looking at the fear and

greet index we were currently hovering

between fear and neutral this in turn

could mean the rally may be far from

over not only that election years in the

US like the one we're currently in tend

to be very positive for the stock market

especially during the last few months of

the year Additionally the first expected

interest rate drop by the fed and the

subsequent increase in liquidity later

this year could further boost the market

and yes in this case I'm talking about

the US market but with a current share

of 72% in an MSI world and 62% in the

footsie over world this significantly

impacts our returns AS Global Investors

either way whatever happens our

long-term investment strategy which has

served us very well so far since 2017

will remain the same we simply buy more

Global ETF shares on a monthly basis no

matter what is going on in the markets

or what the news are telling us we

should be worried about next by the way

you can find the best lowcost brokers

for ETFs in Europe linked Down Below in

the description which is a great way to

support me if you'd like to and don't

forget to subscribe whe they're there

this brings me to trade Republic one of

the Brokers I use the most not just to

buy ETFs but also as a high yield

savings account that's because they're

directly passing on the ECB interest

rate of 3.75% per year on uninvested

cash secured by a € 100,000 bank deposit

guarantee in June we earned €70 and 69

cents in interest on our savings here

plus 14 from the 1% save back using the

trade Republic card for our expenses

which was invested into our ETF of

choice the broker started rolling out

fully featured bank accounts in Germany

last month which they're able to since

they have a ger German banking license

these could be quite interesting once

they become available in other countries

across Europe like Austria where I live

however since it will likely still take

a few months for that to happen I don't

think it makes much sense to waste your

time going into too much detail just yet

after all some of the features could

change until then and I prefer sharing

my firsthand experience with you once I

have access to the new bank account

myself all right let's see how my exit

from peer to-peer larning has been going

since I've shared my experience as an

investor in this sector so far I feel

like it's only fair to share the other

side of it as well namely when you want

to withdraw money from each platform by

the way I made this decision at the end

of June if you want to find out more

about the details why make sure you

check out this recent video of mine all

right let's quickly go over my process

and what I've been able to do so far on

MOS I started last month with an account

value of over €1,000 after I made the

decision to exit peer peer Landing less

than 2 weeks ago I was already able to

sell and withdraw over 60% of what I

invested in loans dropping my account

balance below €4,000 I did not sell any

loans at a discount the fees you see

here are simply because MOS charges a

0.85% fee to the seller when using the

secondary Market this fee does not apply

if you're using the cash out function

via their automated strategy which I

wasn't using meanwhile I actually sold

my loans with rates above 13% per year

at a premium of 0.85% which you can see

here simply to cancel out the secondary

Market fee for these loans with higher

demand my overdue payments of around

2,500 will likely take some time to be

fully resolved so I'll keep checking on

my MOS account over the coming months

and years to withdraw what comes back

from this as well now es it was the

easiest to cash out I simply disabled my

aut invest strategies and set the amount

to zero and as you can see in my account

statement within only 7 minutes all of

my loans were sold to other investors

and the cash was back on my account in

this case with zero fees which is great

robocash was the second easiest to exit

as I could easily sell 98% of my loans

on the secondary Market once again with

zero fees or discounts here's how it

works just click on my investments

filter by current select each loan own

and click on sell now you just need to

wait for another investor to buy it

usually be there Auto invest it only

took a few minutes here as well and

almost everything was back in cash on my

account make sure you stop and set your

auto invest regist to Zero by the way if

you want to withdraw your money as for

Lon they luckily also have a secondary

market so I simply selected every loan I

was able to sell and place it on the

secondary Market on June 28th and within

that same day I was able to have €

1,194 back in cash on my account also

without any fees or having to Discount

my loan and since V invest does not have

a secondary Market I was only able to

withdraw about €600 worth of available

funds from repaid loans after stopping

the auto invest so far and based on my

outstanding Investments it will likely

take up to 197 days for me to be able to

withdraw everything income Marketplace

also doesn't have a secondary market so

I simply stopped my auto invest and I'm

withdrawing the money that is paid back

over time €

1,187 so far last but not least I was

able to withdraw 1,030 from davum so far

and I'll withdraw the rest as my loans

paid back over time since there's no way

to sell loans early here either all in

all I've been able to withdraw

23,45 within less than 2 weeks of

stopping my peer-to-peer Investments

more than half of the sum I had invested

in this sector now you may be asking

yourself where I'm putting this money my

strategy is pretty simple I'm investing

80% into globally Diversified lowcost

ETFs 10% into speculative assets like

Bitcoin and the remaining 10% will stay

in cash on my trade Republic account

earning 3.75% interest per year all

right now let's finish things off by

looking at a portion of my portfolio

that carries the highest Risk by far my

small spective allocation to the two

largest crypto assets Bitcoin and

ethereum both of them performed poorly

in June dropping between 5 and 7% sadly

the first week of July is looking even

worse so far pushing the 2024 returns

for both assets down to 35.6 and 33%

respectively if you're new to this

highly speculative asset class drops

like this may shock you but they're

actually quite frequent when looking at

the past all also during bull markets

and it's once again a good reminder that

crypto carries a lot of risk and should

only make up a small percentage of your

portfolio if you decide to included at

all as it's definitely not for everyone

based on previous Market Cycles I do

expect these to perform well over the

rest of the year but we'll have to wait

and see all right guys that's it for my

latest investment update I hope all of

you are having a great summer so far

before I off don't forget to gently type

the like button if you enjoyed the video

and to subscribe if you haven't yet if

you'd like to support me you can find

links to my favorite Financial tools in

the description below and of course none

of our talked about today was Manda

investment advice I'm just sharing my

personal opinion based on my own

experience as an investor thank you guys

so much for watching have a wonderful

day and until next time