VT ETF growth potential

Investing / Portfolios
1

I just wanted to trigger a discussion about the well known VT ETF and the current future potential for growth based on the Dollar Cost Averaging / Rebalancing - strategy.

For the last three months the VT ETF has a growth of about 20% to date; which I believe have happened very few times in the past (such a growth in such short time frame). Is reaching 52w highs again and again.

Considering you are following a conservative “mustachian” strategy would be a wise decision to continue buying now at a such high price level or would be “wiser” to stay on hold - let’s say for 1-3 months- ahead to see how the whole market is going and then make your move on VT?

I understand of course that you cannot predict the market; and the whole idea is to not play the market, just wanted to hear your thoughts about this topic and for generally the concept of continuous DCA (on pre-defined time frames) when you “feel” that the share is already too high and “overvalued” compared to when you started…

You know there is also the other side of the coin… the ones claiming you never buy too high… you are only selling high and you are always buying low

just a topic from the top of my head …thanks a lot for your thoughts…

2

Time in the market over timing the market, plus DCA, you mentioned all the points.

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3

The expected return of equities is always positive.

4

I hear this sentence frequently. When we talk about time in the market benefits, are we just talking about dividends? Or am I missing something?

5

I understand that for a very long term investor >20 yrs probably the time in the market is much more important so okay.

but what if you consider a 5 to 10 yrs investment time frame?

I mean only from the dividends (after tax) you cannot expect more (very roughly) than 2% a year… right?

but if you make a reasonable assumption that the market will (roughly) continue fluctuating like the past 5 years for the next 5 years, when you are buying on the highest side you are compromising your potential returns very significantly.

of course all that is a very hypothetical scenario it can be that it continue rises up…

so I guess my ultimate question would be the following.

Let’s say you have decided to invest 5000 -chf 4 times per year in VT ETF with an investment target of 10 years. Do you set a “robotic” transaction for buying those 5000 blindly 4 times a year (and no effort spent at all)

or better you set yourself some price limits (for every quarter) or for the whole year a price limit for a lump-sum? of course greater effort and more complicated process but would be the extra effort worthwhile?

6

You need to admit to yourself that you nevertheless try to time the market. Nothing wrong with that but I wouldn‘t sugarcoat it. fix the 4 dates when you you want to invest in VT and execute accordingly. everything else is market timing.

3 Likes
7

Ignore the noise, stay the course, keep investing everything what you’re able to save the day it’s available.

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8

I am using this occasion, if I may call it like that, for rebalancing my portfolio meaning that this month I do not buy any VT but use the money to invest in my newer asset classes instead such as small caps as defined in my IPS for 2021. So this month instead of buying VT I am buying AVUV. Of course next month VT might be even higher but never mind I will still buy VT, that’s how it is, I’ll stick to the course.

9

Following up, actually today is a great day to do some shopping, VT is down >2%.

1 Like
10

Just did that. IB didn’t let me buy this afternoon due to missing trading permissions, I guess this was a bug that I’m pretty happy about now.

11

That’s like the price of just 3 weeks ago - nothing special here. :slight_smile:
Let’s hope for a -15% at least. :stuck_out_tongue: :crossed_fingers:

12

I am also expecting around a -8% to do some shopping here… but in case it doesn’t get there within the next one week or I am going to buy at whatever as the guys above mentioned…