My Investment Portfolio: Achieving High Returns with Low Risk!

I made around 12000 euros in profits from my investment portfolio in the last six months, just in the last 6 months. If we take a short look at my portfolio, you can see that I have been investing only in stable, well-established companies. And taking minimal risk. But still, I managed to make a considerable gain. Now how exactly I did that, I will come to in the later parts of this blog. But many of you have asked me, how and where I invest my money. So, here I will be sharing my portfolio covering my stock market investments in Germany.

Before we get started, I need to share two disclaimers. First, this is not financial advice. I’ve read a few books about investing and have some hands-on experience, but I’m nowhere near being an expert. I will be disclosing the details of the companies I have been investing in and sharing my opinions. However, don’t blindly take them as advice. Always do your own research and consider your financial situation before investing. It's called personal finance for a reason.

Second, the purpose of this blog is not to show off my investments or how much I have saved. Honestly, my portfolio isn’t as remarkable as others in this niche. Money is such an important factor for our well-being and happiness, and I believe it’s important to talk about money more openly. I just want to show that you can start with a little, invest regularly, and let the power of compounding work for you. Having said that, let’s get started.

A major share of my investments are in India because I think the Indian market has more growth potential in the coming decade. I will cover my Indian investments in detail in a separate blog. However, it could also be that I might need money here in Germany sometime in the near future, for example, to purchase a house. Of course, I can bring over my investments from India to Germany, but I just wanted to keep a share here as well, and If you have been reading my blogs, you would know that keeping money in a bank account in Germany is a foolish thing to do because of the very low interest rates.

So, around the time of Covid, I also started investing in Germany with an online broker, Scalable Capital. Since I don’t actively trade and my investments are mostly monthly savings plans, I choose the basic free plan from them.

They also offer paid plans with benefits like unlimited free trades and a 4% interest rate in the first four months. But the basic plan works for me and my needs. Additionally, the money is held in Baader Bank and is insured up to €100,000 by European regulations. Even though it’s more about where you invest than how you invest, I have been using Scalable Capital for the past four years and have no complaints about them. If you want to register with them, I’ll put a link in the description below.

Currently, my portfolio is up by [x]%, with profits of around 20,000 euros. In the last month alone, the portfolio has increased by around 3500 euros. But I want to zoom out a little bit and show that it hasn’t always been like this.

I started this portfolio with 1250 euros, in 2021 and as you can see, within the first couple of months, the portfolio value started to go down. Had I not kept on investing or sold off my investments at that time, I wouldn’t have made the profits that I have now. You can see about a 24-month period where we experienced some sideways and negative movement for the portfolio, thanks to the tech wreck of 2021-2022, which saw many of my tech-based holdings plummet. But from mid-2023 onwards, the portfolio has generally headed in an upward direction.

Now, that’s since 2021, so over 3 years. When we do the math, it’s like a return of 30% per year, which is extraordinary. So let's have a further look into the allocations, and see which assets gave me such good returns. There are mainly two assets that I invest in, Individual stocks and index funds and

Individual Stocks

Even though my investments are spread across different sectors such as energy, healthcare, consumer goods, financial services, and others, still you can see there’s a strong focus on tech stocks. There is a reason for that. I am an engineer and also a tech enthusiast, so this is one industry that I am most exposed to and most aware of. And no investment in tech is complete without the two giants in the industry, Apple and Microsoft.

I have around 12% of my portfolio assigned to Apple, making it the largest individual stock investment in my portfolio. I’m a huge Apple advocate, and I believe in the company and its ability to innovate and remain a dominant player. The stock has performed considerably well, giving me an absolute return of 54%.

Microsoft is my second-largest holding, providing a return of 57%, which is again quite significant. And if we look at the future, there are many developments in cloud computing and AI, and I believe there is great potential for Microsoft there. So I personally don’t believe we can really go wrong with these two companies. But again, it's my personal opinion. So, I have set up savings plans to invest €100 monthly in both of them.

I also have a good share of investment in Alphabet, which is the parent company of Google. It has also performed relatively well, with a 50% return.

A couple of other significant positions performing well for me are Amazon and JPMorgan. Both are valued at €5,000 each, with a return of just over 45%. They give me some exposure to other sectors such as consumer goods and finance.

When it comes to consumer stocks, I prefer stable companies that aren’t heavily affected by market conditions. Companies like Coca-Cola, which is also a favorite of Warren Buffett, as well as Procter & Gamble (P&G) and 3M. Even though these companies aren’t growing as fast as their tech and finance counterparts, they have another major benefit: they provide me with passive income in the form of dividends.

Dividends are a means for companies to reward their stock owners for their ownership. For us investors, they are a way to get regular income without doing anything to the investment itself. You just buy the stock, sit back, and collect the cash. Now different companies have different payment schedules—some pay monthly, some quarterly, and some annually. Last year, I received dividends of around 100 euros from Coca-Cola, 80 from 3M and 60 from P&GOnepi2356122.

Even though it’s not much, it’s free money that I can reinvest into the portfolio to make use of the compounding effect. I also hold shares in other dividend stocks such as Johnson & Johnson and McDonald’s, and have been receiving almost 100 euros yearly from them.

Then sadly, there’s Tesla, which has fallen from its grace. I hold 21 shares of Tesla valued at around 5000 euros. The optimism about the company is nowhere near what it used to be, and while I’m still hopeful about Tesla’s long-term prospects, the short-term could be a roller coaster ride.

I also have small investments in companies such as Visa, Disney, Uber, Airbnb, Berkshire Hathaway, and Nvidia. Nvidia is one investment I regret not buying earlier. Most of them have made me profits, except for a few, and I can't talk about losses without mentioning Coinbase.

Even though I bought just one share during the IPO, it has been one of the worst-performing stocks in my portfolio, falling to €30 from €280 at one time. But it taught me a valuable lesson: never give in to the hype and always understand the company well before investing.

I also lost some money with other stocks, though not much, and every loss is a new learning. And that brings me to the second part of my investment portfolio: index funds.

Index Funds

A recent study by McKinsey shows that the average lifespan of a company in the S&P 500 was 61 years in 1958, but today it’s less than 18 years. Think about it: if you’re picking individual companies to invest in right now, chances are that three out of four of them will not be doing as well 20 years from now.

When it comes to individual stocks, I’ve actually lost money, whereas I’ve never lost money investing in index funds. Index funds just track the market, and the market always goes up over time.

So right now, I am focusing more on index funds and have increased the investments that I make in them.

The index fund I mostly invest in, and my favorite, is the S&P 500. This is the only position in my portfolio that is bigger than my Apple investment. The S&P 500 is an index fund made up of the 500 biggest companies in the U.S. This means that if you invest, let’s say, $1000 into the S&P 500, then $40 will go to Apple, $30 to Google (Alphabet), $20 to Microsoft, $20 to Amazon, and so on. It’s almost as if you are putting a small amount of money into each of these big companies based on how big the company is. If you invest in all of the top 500 companies in the U.S., chances are your investment gains will go up as the market goes up.

As you can see, my unrealized gains in the S&P 500 are at 33%, or around €2750. I’m consistently investing €200 every single month with the help of a savings plan. You can see that, this is an accumulating ETF, meaning that it does not pay any dividends; instead, they are reinvested back into the ETF.

I also have some holdings with Vanguard FTSE Allworld and Invesco EQ Nasdaq 100 ETF. Another strong point about ETFs is that they have very low expense ratios, in the range of 0.1%, which makes them a good investment from a cost perspective.

Cash

Other than stock and ETFs, I keep some reserve cash in my broker account for quick investments. This way, if the market drops 30% to 50%, I can quickly invest without waiting for money to get transferred from my savings account to Scalable Capital.

So that’s my Scalable Capital portfolio. I’m planning to rebalance it sometime soon, selling off some investments considering my overall capital gains and tax payments. I’ll also stop investing in Scalable Capital when the portfolio touches the €100,000 mark, as investor protection stops beyond that value. Although I will continue investing monthly using another broker, such as Trade Republic, or move a major share to the Indian market where I have made more returns.

Finally, if there’s one thing you can take away from this blog, it’s not about the companies that I picked or the figures you see on the screen. I made these profits not because of any special skill or expertise. I attribute most of those results to one very simple thing: taking consistent action every single month by investing in my portfolio without fail. Nothing else.

Let me know what you think about my portfolio in the comments. I’m also curious to know about your picks. If you’re looking for a great, free investing broker in Germany, you can sign up with Scalable Capital using this link. And you can watch this video to get started with them.

I am also building a community outside of YouTube to discuss German finance topics, including taxes, where people like you and me can come together to collectively share their experiences. I will also be uploading exclusive videos of how I make investment decisions and do the rebalancing every year.

If you’re interested in being part of this community, click this link to join the waitlist. For now, I want to limit it to a few people to keep it manageable and it will be first come first serve. So do sign up earlier, if you want to be part of it. I’ll send you updates as they come.

Disclaimer: The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. It is important to do your own analysis before making any investment.