MSCI World Index: 99% of Investors Get THIS Wrong!

MSCI World Index: 99% of Investors Get THIS Wrong!

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The MSCI World Index is one of THE major stock market indices and stock market ETFs in the world and arguably the most popular index and ETF among passive investors. The MSCI World Index is a widely recognized benchmark for global stock markets, encompassing stocks from 23 developed countries. However, despite the MSCI World Index's popularity and widespread use, there are several misconceptions surrounding the MSCI World Index that can lead to misunderstanding the MSCI World Index's purpose and significance. So in this video, we will explore some of these misconceptions about the MSCI World ETF – 5 in total – and provide clarity on what the MSCI World ETF is, how it works, and what its limitations are.

I think the vast majority of people should simply invest passively and invest in 1, 2, or 3 broad low-cost indices or ETFs and I think the MSCI World Index is a really good choice for this. If you are entirely new to investing, investing in a passive ETF is also an excellent choice to get a sense of what it’s like to invest in equity markets, how it feels like when the value of your investments goes up and down and to develop an interest in the world economy and economic topics.

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The content provided on this channel should be considered an educational resource and should not be construed as individualized investment advice, nor as a recommendation to buy or sell specific securities. The stocks and funds discussed on this channel are examples only and may not be appropriate for your individual circumstances.

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I hope you enjoyed the content!

[zaalek]

I like the MSCI World. I put around €1000 each month in an ETF that tracks it. Each year I increase this monthly amount.
I dont want to bet on single stocks or sectors. I also dont like the high volatility of emerging markets. I will stick to the MSCI World for the next 20 years at least. I hope to get around 7% or 8% return per year. That is enough for me.

[ericsolorio]

Most the return of the stock market was generated by 4% of stocks. Wouldn’t passive be better than active? What if you are active investing and didn’t pick the 4%. We all know the few stocks will be included in passive global etf.

[bornfree]

So you believe with your active approach you can magically, consistently pick the 4% that contributes to index growth?

You are over-thinking things ; that’s why the MSCI World is the best option for almost everyone other than prophets of the future

[kemingyu]

My day job is private equity investment, which by its very nature is highly concentrated (you buyout entire companies rather than investing in minority stakes) and i have seen far too many very smart and extremely rich people (from a salary point of view) get wrecked from this over concentration. Diversification is the only free lunch in this world. There is a extremely small proportion of people who beat the market continuously over a 5 year period let alone 10 from active stock picking and concentration. The rest of of majority in hedge funds come from the best schools in the world with extremely expensive tools at their disposal, and they still fail to beat the market. I am not that smart and will err on the side of caution. The biggest contributor to wealth is by far the amount of capital you put into the market and time. Your time spent of picking stocks, if put into actual work that earns you a bigger bonus, will yield larger incremental gains on your long term wealth than does picking stocks. Obviously if your day job is public market investment and your salary depends on picking the right stocks, then please feel free to ignore my previous comment

[ChrisWalker-fqkf]

The graph for this index over the last ten years is pretty similar to the graph for most of the big tech stocks (MSFT, AMZN, GOOG, AAPL etc).

Given how heavily weighted the index is to US stocks and how much the US stock market is dominated by tech companies, has MSCI World Index now become an enormous bet on the future of the tech industry? So it's not got the kind of diversification we want from an index like this.

[foodguy]

I personally DCA in to VT which tracks the FTSE global all cap index

[PaulDC-xlpw]

Thanks for the insights! How would you invest 50K (just to see the %/ETF) (allocated via different etf's? => S&P500+INDIA+PHARMA+MSCI WORLD)? Thank you very much! Cheers, P

[filippxx]

You say only 4% of stocks bring all the gains of SP500 yet, you advocate for active investing because of some metrics. :D That's like thinking you have a chance in the NBA because your metrics in the school arena are good. Picking the winning stocks is so much more than metrics, and there is so much more info that regular people just don't have before it gets priced in.

[colinquekking]

the idea is "apply a strategy to oneself and adjust as needed" and not and never to apply oneself to a strategy. As is the famous slogans w the passive investing crowd (im also part of this crowd), "u cannot time the market" "u cannot predict the market" ... precisely, then why follow a formula and expect it to work all the time, even across a long time.

[missyL]

You stated MSCI world in 2010 had a 50% drop but your second chart shows up 12% .

[harikrishnanchandramohan]

@ReneSellmann. If it is positively skewed, isnt it better to go for msci acwi, where everything including emerging markets are included. Because Japan was in a very similar state to usa once but it hardly recovered after the crash.

[skariP]

Would you guys go with MSCI World (EUNL) or FTSE All-World (VWCE) Is emerging markets necessary or just an unnecessary addition?

[BaileyMxX]

You mention how you want to choose actively single picked stocks, yet at the same time mention 4% of stocks accounting for the gains, its the reason 90% of active funds underperform?

You only have to look at this year, if you didn't have Nvidia and to an extent the others in Mag7 you'd have massively underperformed.

You've really got to be on the ball and hands on to outperform regularly over 10+ years if you're going active. Everyone can do a good year or two, its the ability to do it year after year in differing environments that shows the real talent and fact is most can't do that.

[krj]

8:25 I've been looking for this GIF for ages, where did you get it?

[sasukereflexes]

No
You've provided wrong information
The biggest downturn didn't last that long
Check your sources next time please

[masterredboy]

in your opinion what are the best accumulating ETFs (name at least 3 pls) for european investors? ETF's in euro, I don t want to pay for fees because of currency exchange. Thanks a lot!!

[DerrenTube]

iShares Edge MSCI World Size Factor is weighted so the main point does it change?