LSA Magazine Press Release: The past month has been relatively positive for stock markets, with indices continuing to rise gradually. Many global indices are now practically at or near all-time highs, despite the fact that a relatively large number of different risks still persist in the world, see the figure S & P 500 below. Shares are therefore relatively expensive and the question arises whether it is not a good time to hold some of your money in cash or some equivalent.
On the other hand, ordinary investors should not care what happens in the market, because history shows that regular investing is the best thing most people can do. This will also be one of the topics the latest installment of Tomáš Vranka's Stock Portfoliowhere you will learn some interesting things.
Source: XTB investment app
The first topic discussed this month was the position of European car companies in China and in the world. European automakers were once the dominant players in the world and have expanded into many foreign markets over the years.
A few decades ago, European carmakers wanted to penetrate China in this way. It was a large and promising market that was growing rapidly and where domestic companies had no experience in car production. However, in many cases, the condition for entering the Chinese market was that European companies had to enter into partnerships with domestic brands.
Over the decades, however, Chinese companies have learned a lot from European ones and have started to produce their own cars. Not having much experience with internal combustion engines, they have jumped straight into electric cars, in which China is currently leading, along with Tesla The tables have also turned in that European companies are now learning from Chinese ones in the areas of electric cars and software.
The second video topic this month is Warren Buffett and his Berkshire HathawayHe plans to step down at the end of this year and transferchat management to Greg Abel. Warren Buffett is considered the best investor of all time with a good nose for interesting companies. That is undoubtedly true, but it is only one of the reasons for his success.
Buffett has roughly doubled Berkshire Hathaway's annual performance compared to the S&P 500 (20% per year versus 10% per year) partly due to the use of foreign capital, i.e. leverage. However, this is not leverage as we know it, but leverage provided by the insurance industry. The latter provided the company with a huge amount of cash, which the company then used to increase its positions.
However, the format of a stock portfolio is primarily about regular purchases. This is most often done with individual stocks or stock index ETFs and to a lesser extent with cryptocurrency ETN funds. However, this time Tomáš decided to add to the portfolio for the first time bonds in the form of ETFs.
Bonds have their place in an investment portfolio, but they also have several disadvantages. The biggest of which is that they have historically significantly underperformed stocks when held for a long time. However, today there are instruments that allow you to use bonds, for example, for short-term cash holding with a relatively low level of risk. There are bond ETFs with short maturity periods, whose prices are not as volatile as the prices of bond ETFs with longer maturity periods.
So, for example, if an investor expects the market to be high and wants to wait to open a position so that the money isn't just sitting in their account, such ETFs may make sense in the short term. If you're interested in more informationmacFor more information about this instrument, check out the latest installment of Tomáš Vranko's Stock Portfolio.
If you want to learn more about bonds, Berkshire Hathaway, or other topics that Tomas discussed in the new video, you can get free access via this link: https://cz.xtb.com/akciove-portfolio-tomase-vranky.
Investing is risky. Invest responsibly.
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