At RICHTWERT, we aim to protect and maximize our purchasing power through intelligent, risk-controlled investments in businesses.
Quantitatively, our medium and long-term goals ( >5-10 years) are:
At least 10% return p.a. before taxes & profit sharing or
at least 3% p.a. better than the S&P 500 Index (currency hedged) before taxes & profit sharing.
Ideally we want to achieve both goals, but as explained here, I am also satisfied if we achieve only one of the goals in the meantime.
If we only achieve target 1 after several years, it is likely that the S&P 500 performance has been excessive and that future S&P 500 returns will be lower. This should allow us to achieve target 2 in subsequent years as well.
On the other hand, if we only achieve target 2 after several years, it is likely that the S&P 500 performance has been too low and will improve in future years. If we continue to outperform the S&P 500, then our absolute performance would thereby also improve, enabling us to also achieve target 1.
If we miss both targets, we should look for alternatives for our capital.
Bahram Assadollahzadeh, CFA