Equities or ETFs - Active or Passive
One of the most common questions on savers and investors’ minds, is am I better off with individual holdings in the form of stocks and bonds or with mutual funds and ETFs. The answer depends on you, and for most people - it is a combination of both.
Equities can enhance a portfolio that includes passive ETFs due to their potential for capitalizing on market discrepancies. At Saor, we specialize in identifying these opportunities within your portfolio, targeting robust companies that might have experienced a few challenging quarters according to Wall Street's standards, yet possess strong prospects for success over the next three to five years.
Similarly, other stocks our clients have enough owned have demonstrated resilience and potential for recovery:
• Meta (formerly Facebook) stood at $237 in February 2022.
• Nvidia was priced at $12.14 in September 2022.
• Target reached $106 in October 2023.
• DraftKings dropped to $13 in June 2022.
• Coherent was valued at $35 in August 2023.
By focusing on the intrinsic value and long-term growth of these companies, rather than short-term fluctuations, investors can significantly benefit from including select equities alongside their ETF investments.
The percentage allocation to both passive investments and active opportunities in your portfolio comes down to a combination of your risk tolerance (emotional), your risk potential (economic and mathematical), and your time horizon (stage of life and family planning).
Tax considerations are also important, as the benefit of Tax Alpha should be factored in for a total after tax return.
Investments are never entered into lightly or quickly with a deep understanding or where the client is holistically.