Prosperity under peril, thus Gerd Kommer, financial advisor, allocates funds into Exchange-Traded Funds (ETFs) and real estate.
Dr. Gerd Kommer, a prominent German asset manager and expert in long-term wealth accrual, advocates for a scientific, rule-based approach to investing. His philosophy, known as the "world portfolio concept," emphasizes diversification, systematic rebalancing, and the reduction of emotional decision-making to protect and grow wealth. In an interview with BÖRSE ONLINE, he discussed the need for rapid change in German politics and the significance of protecting wealth in the current economic climate.
"It is crucial that we change," explains Dr. Kommer. "Citizens across the nation, as employees, households, and retirees, will be affected. We require more economic growth to prevent substantial distribution conflicts, which will potently become a significant societal issue."
Recognizing the importance of protecting investors' assets, Dr. Kommer encourages capital market investors to take advantage of opportunities in the global stock market, bonds, crypto, precious metals, and real estate. He is particularly enthusiastic about globally positioned Exchange-Traded Funds (ETFs) that cover various global stock markets.
To achieve this global exposure, Dr. Kommer suggests ETFs that offer broad market exposure and are cap-weighted to ensure diversification and reduce single-stock risk. These ETFs follow a set of quantitative criteria that are rebalanced quarterly, thereby excluding emotional biases and market timing. The long-term, passive investing strategy aims to capture global market returns with minimal costs and turnover.
While real estate is mentioned as part of a diversified portfolio, Dr. Kommer acknowledges that it might be an unaffordable investment form for many people in Germany, making the traditional recommended route inaccessible to over half of the population. Regardless, he believes in the benefits of investing in real estate indirectly through Real Estate Investment Trusts (REITs) or real estate funds for portfolio stability.
When it comes to stocks, Dr. Kommer advocates for a buy-and-hold strategy, given their long-term growth potential. He advises strategic asset allocation based on an investor's risk tolerance, which is rebalanced periodically, not on market predictions but on maintaining target allocations.
In implementing these recommendations, Dr. Kommer suggests investing in broadly diversified, rules-based ETFs, setting up automated savings plans, rebalancing periodically, avoiding market timing, focusing on low-cost investment products, exercising patience and discipline, and avoiding overconcentration.
Dr. Gerd Kommer's approach emphasizes simplicity, discipline, and a focus on what can be controlled – costs, diversification, and long-term strategy – rather than attempting to predict the unpredictable.
Investing in various sectors, such as global stock market, bonds, crypto, precious metals, and real estate, is encouraged by Dr. Kommer to protect and grow wealth. He particularly recommends Exchange-Traded Funds (ETFs) that cover diverse global markets and offer broad market exposure, reducing single-stock risk through their cap-weighted nature and quarterly rebalancing.
For those who find real estate investment unaffordable, Dr. Kommer suggests considering Real Estate Investment Trusts (REITs) or real estate funds for portfolio stability, as a means to indirectly benefit from real estate investments.
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