VT and Chill

«VT and chill» is a slogan from the Bogleheads community (named after the founder of passive investing, John Bogle) and means buying the «VT» ETF (Vanguard Total World Stock) – a single fund that tracks nearly the entire global stock market – and then relaxing. This is a very high-risk investment strategy with limitations in terms of flexibility and tax efficiency.

As an investor, you relinquish control over the weighting of individual regions and sectors. Another limitation is that bonds, real estate, or commodities are not included in the investment strategy. Many investors wish to invest with lower risk depending on their investment horizon and future financial needs. Partial, finely tuned currency hedging is also not feasible with a single ETF. Additionally, there are disadvantages regarding tax optimization, as a single investment instrument does not allow for selecting the optimal fund domicile per asset class and submarket. Psychological hurdles are also worth mentioning. «Chilling» is easier said than done during periods of high market volatility if one’s own risk tolerance has not been objectively assessed in advance.

In contrast, there is the investment solution offered by a cost-efficient, digital wealth manager. This manager thoroughly clarifies the aforementioned aspects and keeps the portfolio on track in the long term thanks to automated rebalancing.