who would have thought that 2024 would turn into such a great year for investors since Global stock market indices are currently passing one alltime high after another we're seeing what usually happens in this situation more and more investors are asking since the market has gone up so much is now the right time to buy ETFs or should I wait for a drop first the exact same goes for Bitcoin now that it's getting closer and closer to $100,000 all of a sudden everyone seems interested again and is wondering if now is a good time to add this volatile asset to their portfolio and lastly the ECB has another monetary policy meeting this month so we may be looking at another drop in Euro interest rates before the end of the year will discuss what this means for high yield savings account as well as popular money market ETFs so as you can see there's a lot to talk about today I'll of course also show you how all of my investments performed until today December 1st and how I'm planning to rebalance a bit before the year ends let's start with stocks in the form of ETFs by far the largest position of the Investment Portfolio I share with my wife the investco FI over world the global ETF we buy on a monthly basis finished November up an astounding 7. 11% to put this into perspective 7% is the average yearly return I like to calculate with for our long-term investments in ETFs which means it's now up 2629 in 2024 as a whole looking at actual numbers in Euros our ETF portfolio has gained € 26,200 in November and $75,600 since the start of the year as for our average yearly return since we started investing in ETFs back in 2017 we're we're currently sitting at 12. 22% per year I really did not expect the stock market to perform this well in 2024 especially after we had already ried 18% in 2023 I actually anticipated lower returns compared to last year of course this could always turn around in December we'll have to wait and see but so far things have been great for investors in World ETFs which is why I'm now seeing this age-old question pop up more and more often in comments and emails is now a good time to buy ETFs since the market has gone up so much or should I wait for a drop first it's completely normal to feel that way I've been in that same exact position many times before myself we also have analysts telling investors to wave goodbye to the stock market's historic run based on their forecasts that sounds pretty bad right well that's until we take a look at forast from the past and what happened in reality the average Wall Street forecast was that the S&P 500 would finish the year at 4,861 points or that us stock market returns would basically be flat for a year and yet here we are at the start of December M with the S&P 500 above 6,000 points 24% higher than what experts predicted the thing is nobody can successfully predict how the stock market is going to move and so-called experts are no exception in fact from the year 2000 to 2023 the median Wall Street forecast missed the actual end of the year returns by 13.
8% annually more than double the average yearly returns in the market this means that listening to expert device was essentially worthless and it's unlikely to change going forward well Goldman Sach is now calling for 10% returns in 2025 for the S&P 500 take that however you want hopefully we don't see the opposite happen based on their poor track record with forecast so far either way I still understand if you feel a bit worried after seeing the market pass one alltime high after another that part in itself shouldn't deter you from investing though since the market trends upwards over time it's completely normal for it to reach new alltime highs on a regular basis looking at the US Stock Market specifically it has on average made 14 new highs every year since 1928 I'm not saying we couldn't see a correction soon after all pullbacks Corrections and even crashes every couple of years are a normal part of investing in the stock market and we may be overdue for a correction since the market has gone up so much the past 2 years the thing is there's no way to know if and when it's going to occur and how long it will last it's not something to be afraid of though otherwise you'll end up standing on a Sidelines indefinitely and you'll never end up investing any of your money there's always something to worry about next if you're looking for it as long as you have a long enough time Horizon of at least 5 years ideally 10 years or more when investing in ETFs it's not going to make too much of a difference anyway if we do get a correction you'll be able to buy additional shares of the most productive companies from all across the world at a lower price and if we don't you'll be happy that you didn't wait before investing it's impossible to predict what's going to happen in the short term so don't overthink it zoom out and focus on a long-term financial goals speaking of long-term investing you can find the best local brokers in Europe for ETFs linked down below which is a great way to support me if you'd like to and don't forget to subscribe if you haven't yet now the ECB has another monetary policy meeting planned for the 12th of December and it's highly likely we may see another drop in Euro interest rates by the end of the year my wife and I are still using the German bank and broker trade Republic as our own high yield savings account since they're committed to pass on the exact ECB rate of currently 3. 25% one to1 to their users in November we earn an extra 78 years in interest with them bringing the toll to € 1,51 so far we're also still using the tri Republic C to where we earned an extra 15 EUR due to the 1% save back we get on all of our expenses using the card I'm fully expecting the European Central Bank to lower rates to 3% by the end of the year which means both money market funds like the popular XT trackers Euro overnight rate swap as well as insured savings accounts like the one offered by trade Republic will start paying that rate as well at that point and sadly based on vanguard's economic Outlook we could be looking at rates as low as 1. 75% in the Euro area by the end of 2025 so let's enjoy our interest rate of 3% or more for as long as it less as it seems likely we'll be back to much lower numbers within 12 months and hopefully inflation will remain at reasonable levels since that could obviously change things all right let's get to my small allocation to bitcoin which just had one of the craziest months I've experienced since 2017 it went up 42% in November and it's now up 139% since the start of 2024 which makes it my best performing investment this year by far now here's my main concern whenever I talk about Bitcoin I don't want anyone but especially investors that are just starting out to see this and then make the wrong decision based on its high average return so far forget about ETFs and their measly returns I'm going all in on bitcoin please don't do that Bitcoin carries a ton of risk and should not be the foundation of your retirement strategy based on my own 7-year experience as an investor holding a digital asset I do believe it can be a great addition to a diversified portfolio but in my opinion you should still limit it to a small percentage of your Investments I'm aiming for an allocation of around 10% longterm which I'm willing to leave untouched to a maximum of 25% during bull markets like the one we're currently in before rebalancing the amount back down to more reasonable levels finding the right time to do that is a science in itself though and you'll just have to accept that you'll never hit it perfectly I'm planning my next rebalancing at the end of this year I wouldn't recommend allocating that much to bitcoin to 99% of investors though 1% to a maximum of 10% of your portfolio is plenty and I also want to clarify it's perfectly fine to exclude Bitcoin from your Investments completely it's not for everyone and it carries a ton of risk this means that unlike World ETFs Bitcoin could theoretically go to zero you should always Factor this into your decision- making anyway now that it's closing in on $100,000 I'm noticing more and more people are suddenly interested in it again after calling it that so many times before now that in itself is fine it happens every Market cycle when Bitcoin goes up quickly I would simply recommend you keep the following three things in mind first you should be willing to hold it for at least 4 4 years the length of one full Bitcoin Hing cycle that's because historically Bitcoin tends to crash as much as 80% in value during bare markets before recovering second buy it on a trusted exchange like bitvavo my personal favorite with the lowest fees in Europe or bit Panda Kraken and coinbase which I also consider great options but with higher fees and third if you hold over ,000 worth of bitcoin or other crypto I would strongly consider buying a hardware wallet like the treasure safe tree which is what I like to use and moving your Bitcoin there for extra protection only buy it from the official store for security reasons and please never share your seat phrase with anyone once you move to a hardware wallet since they otherwise get full access to your funds and if all of that sounds way too complicated for you you can always just add a bit of Bitcoin using a broker like trade repu just be aware that you'll be paying a 0.
