If you live in Europe and have questions

about investing, chances are I will

answer them in this video. As an

investment trainer, I do live Q&A calls

with my students in 34 European

countries. I use my 19 years of

investment experience to answer

questions about ETFs, index funds,

brokerages, taxes, [music] and much

more. Until now, the recordings have

only been available to my paid students.

But in this video, for the first time

ever, I've compiled a few of the top

questions that I believe every investor

needs to understand. If I'm in the

position of investing a large amount,

shouldn't I wait for this mess to calm

down? So, I've been running this program

for 5 years, and I've been teaching

investors for around 10 years, and over

this period, not just every year, but

literally every month, I have had this

same question. Now, of course, sometimes

the answer will turn out to be ah yes,

it would have been smart to wait a

little because the market drops and then

then you could invest cheaper. But the

problem is no one knows when that will

be. I take the approach that I will

never do that. I will simply invest when

I have cash available and and stay with

it. I just make sure I have my safety

cushion and everything else. Do you have

any recommendations about where to keep

the cushion money? I think the easiest

is to have a high yield savings account

at a bank. Right now, you should be able

to find an account that that pays you

like 2% per year roughly. Uh if it's in

euros, so that's what I would do as long

as it's 100 less than €100,000 per bank.

Can I completely ignore news to stay

calm about my investment account

balance? For passive investors, it's

probably more than enough to check to to

look at the news like once a month as a

practical matter. Like there's certainly

no no reason to check your investment

account every day. I don't I have no

idea what what like today what is the

exact position of my my portfolio. I I

don't check it on a daily basis because

it just messes with your head and it

doesn't help in any way. For someone

starting now, should I adopt a different

strategy in order to avoid a possible

loss which will take many years to be

recovered. The strategy really should be

based on your time horizon and risk

tolerance, not based on what's happening

in the news. So if you are super super

worried about having a big loss which

takes many years to recover, that's

maybe an indication that your risk

tolerance is not so high. So maybe you

shouldn't have a 100% stock strategy not

today and not not 5 years from now. If

you were to start building an investment

portfolio at the age of 40, what will

your realistic split be across all kinds

of investment securities? Stocks, bonds,

ETFs, index funds, etc. ETFs and index

funds are a way to invest in stocks and

bonds. So these are not different asset

categories. And in my professional

opinion, for most amateurs, ETFs and

index funds are the best way to invest

in stocks and bonds because buying

stocks and bonds directly is difficult

and most people end up screwing it up

and not getting good results. Unless you

have a relatively lower risk tolerance,

I would be all in stocks and in a

diversified stock portfolio and then

over time I would add some lower risk

investments like bond ETFs. I'm

wondering whether it could make sense to

invest gradually rather than going in

all at once. The general principles

about dollar cost averaging versus lump

sum are based on decades and decades and

decades of market data which have in

included all kinds of volatile periods.

So from a financial perspective like if

I have a lump sum I'm going to invest it

all today instead of splitting it into

pieces. And now psychologically if it's

really difficult then I always say you

know go ahead and and split it into a

few pieces if it's easier for you. But

um from a financial perspective,

investing a lump sum in one go is is

still the smartest decision.

>> This investing in gold better and safer

than stocks. Maybe it was somebody else,

but I think it was Warren Buffett who

basically said, "Look, if you had a

choice for 100 years, you're going to

put all your money and buy some gold

like a chunk of metal that's going to

sit on the shelf or for 100 years your

money is going to be invested in like

let's say 500 of the

biggest American companies where people

are going to go to work for 100 years to

try and innovate and and create products

and make money and and help their

clients and and create dividends and

income like which would you choose? And

not talking specifically about American

stocks, but the point is gold is a chunk

of metal. So over the really long term

it does not create economic value. Um

and and that's why over the really long

term it has underperformed stocks

significantly. it can make sense like

some small portion of your portfolio

whether it's gold or silver just for

like diversification reasons I don't do

it some people do it I think it can make

sense in a financial crisis at which

percent should we sell to reinvest later

so I would really recommend like I don't

know if you watch the whole program but

so we teach passive investing what

you're talking about is market timing it

doesn't work like there is no good way

that you can sell in the middle of the

market falling and then buy at the right

moment it doesn't work like that usually

When you do that, you end up losing a

lot more than if you simply stay calm,

stay invested and you ride it out and

actually you keep investing even when

the prices are going down. So you buy

stocks cheaper. That is the usual

passive investing approach. What is the

ideal number of ETFs to hold? How many

ETFs do you hold yourself? I know smart,

respectable investors who literally have

one ETF and that can be completely fine.

I prefer diversification. So I have

multiple brokerages and because I have

multiple brokerages um at every

brokerage I buy a slightly different ETF

from a different provider. So it's a

little bit of extra diversification. But

then of course if you have a more

advanced strategy for example if you

want to put more of a home bias on

Europe then you will need more ETFs in

your portfolio so it can get bigger. So

there's no single right answer. But I

would definitely try to keep it

under 10. If you're getting close to 10

ETFs it's a lot. I think under five for

most people is is is smart. uh one to

three can be completely fine especially

I think uh for smaller portfolios.

Andreas asks what are the key

fundamental metrics we need to look into

when evaluating ETF performance and

future direction. We don't pick

investments based on performance. So the

only thing about performance with ETFs

that you can do is really check if it is

tracking the index correctly. But past

performance does not predict the future.

So there's no never any point where I'm

looking like okay I'm I'm in a global

ETF and I'm checking how were the last

three years now. Should I stay with it

or not?

Maybe the last three years were kind of

crap, but that doesn't mean the next

three years will be good. Or maybe the

last three years were good. It doesn't

mean the next ones will be bad. That's

not how we do it. Like we pick a

diversified lowcost strategy. Uh and and

then we just make sure that you know the

fund is is tracking the index that it

should that it should be tracking. And

the things that you want to check is

diversification, it's low cost, and it's

the tech technical aspects we look at in

week three to make sure that it's, you

know, still good for your tax situation.

Constantinos asked, I would like your

opinion about ETFs, aristocrat

dividends. So, this is companies that

have been increasing dividends for many

years in a row. From a financial theory

perspective, there's really no good

reason to be focusing on dividends.

Like, it's not a good way to select the

most profitable investments. People have

this mental bias where they think when

they get the dividend from a stock

they're getting richer because they have

more money in their account. It's not

true. If a company pays out dividend now

you have money in your account but the

company doesn't have that money in the

bank account. So the company becomes

less valuable. The stock becomes less

valuable. You don't gain anything when

the company pays out a dividend except

you have to pay tax on the dividend.

There are some other features such as um

profitability. If companies are

profitable in the first place, that can

be a good sign for long-term returns.

And profitability o often comes together

with dividends. Um, but specifically

focusing on dividends too much usually

like it's not not not the smartest move.

I'm worried sometimes about Tesla being

a big part of the world ETFs with the

recent weird situation with Elon, it

might reduce the value of the ETF. Yeah,

it could, but that's why we are

diversified. Yes, it is a notable

percentage, but um even if let's say

even if Tesla were to completely fail,

they're not going to be the first,

they're not going to be the last. I

mean, that's part of the history of

these broad indexes. That's part of what

gave us those good long-term results.

Some part of the index will always fail

or do badly, and others will do well.

So, um if I had 50% of my portfolio in

Tesla, I would be very stressed out. But

if I'm invested in like a global stock

index, I'm I'm not too concerned. In

times of such high uncertainty and

volatility, would you consider changing

the weights of various ETFs forming your

portfolio? When I ran a pension fund,

which got the best results in the whole

country, one of the reasons we got such

good results consistently was that I was

not allowed to mess with it. And that

taught me an important lesson. There

were many times when I was kind of

worried about something and thought,

okay, maybe it would be good to change.

But we had a clear policy and we just

could not mess with it. We had a passive

approach and that ended up working so

well. And usually like if you look at

decades of history, the passive approach

beats most active approaches. So I

always keep that in mind. Even if it

seems to me like maybe it would be

smart, most of the time it's not smart.

It just feels smart. Hey, real quick. If

you're finding this useful and if you

live in Europe and want to start

investing, you might benefit from my

step-by-step training program, the Index

Masterass. In the program, I take you

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to invest successfully as somebody who

lives in Europe. Plus, I'm always on

hand to answer your questions. So, if

that sounds interesting, just follow the

first link in the description to find

out more. Supposing markets are at

all-time highs. Would you still invest

in ETFs? Well, yes, I would because uh

the stock market hits all-time highs 16

times a year on average. It is normal

for the stock market to hit all-time

highs. That is not an indication that

something is wrong. It's not an

indication that something is bad. The

market over time goes up and in a

typical year it hits all-time highs many

times. It's supposed to. How diversified

are global ETFs? If like 60% of a global

stock ETF gets invested in the US market

okay so for a developed world stock ETF

70% will go in the US. For an all world

fund it's closer to 60% because it also

includes emerging markets. How diverse

is that? Well, in a sense it's quite

diverse because a lot of the US

companies are actually global companies.

Many of them make more than 50% of their

revenues globally, not in the US. So,

it's quite diverse. But the other kind

of evidencebacked strategy that I see

making sense is adding more of a home

bias. There are many experts who would

say it makes sense to maybe put 30% in

your home region. So, for us that would

be like European stocks, which reduces

the risk that other parts of the world

could treat us worse. like if Donald

Trump decides to harm foreign investors

or something like that. Karolina saying,

"I just don't see tech going down. I

mean, the world will always need tech

development. What do you think?" That's

not how it works. Um, even if the tech

industry does well, it doesn't mean the

tech ETFs will do well. If the prices

are are already high and and reflect

assumptions of huge growth in the future

and then the actual growth is still good

but not as good as expected, the prices

can still go down. So, I mean, sector

investing is generally very risky.

People tend to jump in when it's hot,

when stocks are high, and then they tend

to have disappointing results on

average. I'm not saying don't do it. I'm

just saying that's generally what tends

to happen. Fred asked, "What is your

take on ETFs that are overlapping? Does

it happen inevitably or is it better to

avoid it?" Uh, my big issue with

overlapping is if it confuses you and

you don't know what you're holding. Like

I've I've seen people they say like okay

I have this all world ETF I have this

developed world ETF then I have this USA

ETF then I have this U US social re

responsible investing ETF and like what

are you accomplishing by having all

these overlapping funds you're not even

clear what your strategy is that is what

I don't like. Now in some cases sure

there's going to be overlap. For

example, if you have an all world ETF,

but you decide, I want a bigger emphasis

on Europe. You might in addition have a

European ETF and they are going to

overlap because the all world ETF has

some Europe as well, but you know why

you are doing it because you want more

of a home bias? It can be completely

fine. Is it better to keep investing in

the same ETFs or keep adding new ETFs in

the portfolio? Mostly keeping the same

is going to keep it simpler. But there

can be some benefits to like I don't

know every five years maybe you add a

different ETF and switch to putting new

money into a different ETF uh for tax

reasons. It's one of those things where

that gives you more flexibility. You can

choose which ETFs do you sell and then

some of them will have a big profit

component, some of them will have a

small profit component and so you can

sometimes optimize taxes. also gives you

a chance to start putting money into

cheaper ETFs because over time new ETFs

appear that are cheaper. But I certainly

wouldn't do it too often like certainly

easily could go for five years just

using like one ETF or one small set of

ETFs and and then maybe add something

new. If an ETF were to rise very

quickly, let's say 20% in a single week,

would you typically take some profit or

just let the position run? I mean, I

invest in broad global ETFs. It's

extremely unlikely for a broad global

ETF to rise 20%. Unless it's like after

the 2020 COVID crash when there was a

big crash and then relatively quickly it

recovered. But even if it happened, I

wouldn't do it because I don't time the

market. I stay in the market long term.

This sounds more like something that

could happen to an active trader who

made a bet on a particular industry and

then it goes up and then you sell it to

fix the profit. Um, but uh for long-term

passes investing, it's not really

something I would do. As an ETF

investor, do you still feel the urge to

invest in individual stocks? I do

sometimes and I've done a little bit.

I've actually made a couple startup

investments and then I realized most of

them looked like they were going to

collapse and I'm not going to make any

money. So, um I I I played a little, but

that experience has reinforced that

probably my best bet is is staying with

index funds and ETFs. If you plan to

retire early and then withdraw 4 to 6%

per year after retiring, is it still too

risky to do all stocks? because I don't

plan on selling. 4 to 6% per year sounds

aggressive. So 4% is kind of the

standard safe withdrawal rate that

people have been using for a long time.

If you look at accommod academicians and

what they say, you know, is really

really a safe withdrawal rate like you

know really low risk of running out of

money, they actually talk about 3.2%.

Uh 4% is already considered a bit high

risk by some of them. Uh 6% is like

crazy high. Uh so being 100% in stocks

and taking out 6% per year is a very bad

idea. You're very likely to run into a

problem where the market drops and you

keep taking out money and you just go

and deplete all your money. Now of

course there's an alternative which is

if the market falls you proportionally

reduce your withdrawals. If you can

reduce your expenses then you can do

that. But it's difficult of course to

suddenly reduce your expenses so much.

Could you go over how much we should

keep in each brokerage before we

diversify? It's not one of those cases

where like you need 10 brokerages if you

have a lot of money just to have a

little bit in each because brokerages

here in Europe if you have a reputable

stable brokerage like good solid

brokerage it's very safe even if it does

go bankrupt your your money is almost

definitely safe almost there's always

that small risk of like fraud or issues

right I would say like if you have a few

tens of thousands of euros in a broker

that's when I would start looking at a

second broker at the point where you

have a few hundreds of thousands

maybe three brokers. I wouldn't want to

go much beyond this because it gets it

just gets more more of a hassle to

manage the portfolio across all these

different brokerages. Sakura was asking

how can I stay motivated passive

investing. There's a few different

things that I do for motivation. One

thing that I always used to do is use my

net worth tracking spreadsheet where

where I kind of take note of like how

much I'm saving and what what my savings

are worth. Even though when the market

goes down that you have to be careful

with the psychology. Another thing is um

yeah m maybe like you have some kind of

reminder once a month to maybe listen to

either the rational reminder podcast

which I mentioned which always inspires

me uh for passive investing. Listen to

my YouTube channel periodically. Come to

these monthly updates to kind of hang

out and chat with with other investors

as well. Um of course if you can find

some friends who are also interested in

it that can be uh helpful as well. If

you enjoyed that and if you want to ask

me all your questions too, I invite you

to join the index masterass, my training

program for European investors. Whether

you're a complete beginner or you

already have some ETFs and index funds

and you want to make sure that there are

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