Investing Strategy in Check: Eleven Years of Flip Flop Portfolio Success

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Written By Kampretz Bianca

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It should be as comfortable as your flip-flops and still provide good income. That was the goal when we first presented our flip-flop portfolio investment concept in issue 4/2013 of Finanztest, more than ten years ago. This statement still applies today and we can show that it has been proven in practice. A mix of a Global Equity ETF and a bond ETF or a Daily cash account is enough for a successful investment.

Tip: Don’t you know that yet? Everything about our financial testing investment strategy in our article on flip-flop portfolio.

All variants clearly in plus

The slipper portfolio is also characterized by flexibility: it can be adapted to the needs of investors. The defensive portfolio, which plays it safe with investments with 75% interest, is suitable for more risk-averse investors. Investors who are primarily looking for returns and are not shocked by temporary dips can count on the offensive portfolio with a 75% equity ETF. Most investors should be happy with a balanced portfolio of 50% interest-bearing investments and 50% stock ETFs. The positive news: Regardless of which portfolio investors would have chosen in 2013, today they are clearly in the black.

For comparison purposes, we have shown in the table the extremes of “safety” with a 100% euro bond ETF and “return” with a 100% equity ETF.

Installation was comfortable

The promise of good returns was fulfilled. But what about the second core promise: convenience? The clear rules of the slipper portfolio make the work easier. In its basic version it consists of two building blocks, the mixture of which must be checked at least once a year. The balanced portfolio of flip flops has a 50:50 mix. Only when one component represents more than 60 percent of the portfolio is it necessary to take action to restore the original combination. Our analysis shows: Anyone who had joined in 2013 would only have to trade twice today because the equity component would have risen by more than 60 percent: once in 2018 and once in 2021. So: really relaxed.

Tip: Our free helps you calculate whether adjustments need to be made or not Flip Flops Portfolio Calculator.

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