Investing in individual stocks allows for precise control over the weighting and composition of the portfolio, a level of influence not possible with ETFs. The issue of representation of specific companies in broader indices, like MSCI World, can lead to conflicts for investors who wish to avoid exposure to certain companies or desire a different weighting. The decision to opt for individual investments is driven by the desire for greater control and avoidance of investments in companies that may not align with personal convictions, offering a more tailored approach compared to passive investing through ETFs.
Opting for individual stocks provides the opportunity for higher returns compared to market-wide ETFs, which essentially offer market returns. The allure of individual stocks lies in the potential for targeted, stable cash flows, especially through companies with consistent dividend growth over the years. Many US companies, in particular, exhibit remarkable stability in their growth rates, creating substantial long-term leverage for investors.
There are a whole lot of reasons for single stocks - at least as a mix.
However, one thing is clear. The effort increases significantly. An investment should normally be preceded by an in-depth analysis and meet certain criteria. You can find out here what we think they are and how to transfer them to a portfolio.
Core stock portfolios
Whether as a solid foundation or a supplementary addition to a core investment portfolio, these diverse portfolios offer flexibility and can be seamlessly combined to meet your unique investment objectives.
What changes depending on the depot is the weighting of our selection criteria. That means: Even in our growth depot there are only companies that can show a certain history, have a good market position and are profitable.
Our portfolios prioritize quality over sheer diversity, strategically selecting stocks with low correlation. While less diversified than broad-market ETFs, this intentional focus enhances portfolio resilience. We aim to include representation from all 11 GICS sectors, even with an initial selection of 10 stocks. This approach avoids overexposure to economically sensitive sectors, contributing to a robust investment strategy.