Our portfolios aim to achieve financial independence quickly and safely. High-performance and low volatility, they also allow a maximum withdrawal rate during the withdrawal phase. They are perfectly suited to any annuitant or about to become one, but also to anyone who is considering becoming one.
Where to start
For beginners, the lazy or those with little capital: PP 2.x
The Permanent Portfolio 2.x is composed of a few ETFs. It aims to be both simple and efficient, while minimizing risks. Transactions are kept to a minimum, relying on a “buy & hold” approach.
For others: the determining Portfolio
THE determining portfolio se compose d'actions et d'ETFs, autour de six stratégies : Blue Chips, Micro Caps, Trading Auto Signal, Immobilier suisse, Obligations suisses et Or. Les sociétés sont sélectionnées en fonction de leur qualité, leur valeur et leur momentum. The largest capitalization stocks are grouped into the "Blue Chips" strategy. These are very high-quality companies with a competitive advantage and a dominant position at the national or international level. As for them, Micro-caps are overweighted relative to the market, due to their appreciation potential and the virtual absence of institutional investors.
It might be tempting to "copy/paste" the existing portfolio, but it is a bad idea. The purchase criteria for certain stocks are no longer necessarily relevant, depending on their seniority in the PF. Their sale could even be imminent. In addition, a "one shot" increases the risk of bad timing. It is therefore preferable to follow the transactions gradually, until you get the desired result.
It is also possible, depending on your preferences or experience, to focus on certain strategies. A good idea is to start with thereal estate Swiss, then gold, followed by Blue Chips, before Trading Auto Signal and finally Micro Caps.
ETFs
If you don't have access to or don't want to use the ETFs mentioned, you can of course use others. My e-book gives you several possible leads. Generally speaking, BlackRock iShares, State Street Global Advisor SPDRs, Vanguard or Invesco exchange-traded funds are worth a look. Here are some possible permutations:
- US Consumer Staples: VDC (USA domicile) or IUCS (Ireland domicile)
- US Healthcare: XLV (USA domicile) or IUHC (Ireland domicile)
- Nasdaq 100: QQQ (USA domicile) or CNDX (Ireland domicile)
- Gold: GLD (USA domicile) or SGLD (Ireland domicile)
- S&P 500: SPY (USA domicile) or CSPX (Ireland domicile)
Actions
The shares traded are all from developed countries. They are therefore in principle available from all financial intermediaries. However, while Tokyo is the second largest financial center in the world after New York, most banks and brokers do not allow trading in Japanese securities.
I recommend opening an account with Interactive Brokers, which is the reference in the field, both in terms of negotiable products, prices, professionalism and reliability. Payments can be made to a Swiss IBAN account. Funds are available very quickly, often within a few hours, but at most one business day.
Trading Auto Signal
The Trading Auto Signal aims to obtain a positive performance during bullish, bearish or flat markets. It tracks the S&P 500 and can be used to trade both the up and down sides of that index.
Objectives of Auto Signal Trading
- trade the S&P and generate capital gains, mainly in capital (interesting from a tax point of view in Switzerland)
- cover positions during bear markets
- lower the volatility of a wallet
- deliver absolute performance, regardless of market conditions
How to use Trading Auto Signal
Trading Auto Signal is an integral part of the determining portfolio. It is either:
- bullish (long position), by investing in the SPY ETF (from SPDR - SSGA)
- bearish (short position), by short selling SPY or investing in the SH ETF (from Proshares)
- cash
Most of the time the position is held "overnight", for a few days or weeks. More rarely, the signal takes an "intraday" position, from the opening, to be closed just before the closing.
As with other positions, trades are reported on the portfolio page. The signal changes about twenty times a year. To avoid having to constantly monitor the portfolio, it is possible to sign up for email alerts (at the top of the PF page).
When the signal changes, simply place a market order (at Interactive BrokersYou can also use the MidPrice order to trade at a slightly more favorable price.)
Which broker to use Trading Auto Signal with?
A broker with low brokerage fees is necessary in any case. You also need to have access to the NYSE Arca market, in order to trade SPY, and possibly SH. I recommend Interactive Brokers, which allows you to place an order at a better price, save on transaction and management fees (IB's advantageous rates associated with short selling SPY). In addition, with the American broker's mobile application, available on Android or Apple, it only takes a few seconds to do what's necessary, wherever you are. Charles Schwab is also very suitable. Finally, Degiro can also do the trick, provided you have an "Active" or "Trader" account (both allow short selling, but it is more expensive than with IB or CS).
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Hello Jerome,
I recently bought your e-book and loved reading it. I will try to apply the different strategies you suggest.
However, I would like you to explain to me how you obtain a graph with the US unemployment curve and its MM200.
Sincerely
Jeremiah
Hi Jeremy
Thank you for your comment. Be careful, I think there is some confusion. For the unemployment rate, we are talking about a moving average in months (12 months). The MM 200 refers to stock prices.
To continue the discussion I encourage you to continue on the forum, members area:
https://www.dividendes.ch/forum-2/forum/zone-membres/
This tutorial is well done, it would have been useful to me when I subscribed to the wallet, at the beginning ;).
As the months passed and I reread the ebook, everything became very clear.
Something I haven't yet grasped is how you determine the weight of the different positions with this level of precision (it doesn't seem to me to be done subjectively). To discuss in the members area?
For bitcoin, I'm glad to see that you now also buy directly on Gemini (of "real" btc!). I also hope that you keep some for the next few years, the demand seems to be getting much bigger compared to the supply
Thanks. Yes I should have done this faster. I listed a few of the various questions I was asked and got to work 😉
Of course, the weightings are not set subjectively. As indicated above, as well as in the ebook, it is the volatility of the asset classes that determines their weight in the portfolio. For 2021 I am considering some micro-adaptations on this point, particularly in relation to the 2nd point you raise, Bitcoin.
I will post a short post about this in the members section of the forum.
Good morning,
My question is probably stupid and I apologize in advance but I am new to this.
At the beginning of the article you write "Simply invest your savings each quarter in a real estate ETF" in the case of small capital. Should you therefore only invest in a real estate ETF when you are starting out and have a small capital? This seems to me to be a fairly "light" investment, unless I am mistaken, and I thought that it was better "not to put all your eggs in one basket" and therefore to diversify from the beginning by buying different types of shares etc.?
Thank you in advance for your feedback.
My wishes for 2021.
Sincerely,
Samuel
Hello Samuel, there are no stupid questions, only stupid answers. So I will try to answer you intelligently.
All the reasoning around real estate investment is indicated in my e-book.
To make it very brief, real estate has particular characteristics that allow it to display a fairly stable performance, regardless of the historical period or the country. It is a bit of a mix between an investment in stocks and bonds.
If you want, you can of course also buy a bond and/or stock ETF, but this is counterproductive, according to the conclusions of my e-book.
You can also go with a more active management, like the one I use in the permanent portfolio, but there again it doesn't make much sense with a small capital. The transaction costs risk eroding the performance considerably.
Afterwards, if you want to "try your hand", why not, but then I advise you to open an account with Interactive Brokers or DEGIRO in order to limit the costs as much as possible.
A little background on Gemini to trade Bitcoin after several weeks of use:
– one of the big advantages over the ETN solution is that we are not dependent on the opening of the stock exchange. We can trade Bitcoin 24/24, 7/7. We therefore do not have the impression of missing the train as is the case at the moment.
– I discovered a trick to substantially lower the basic transaction fee of 1.5%:
go to Account, Settings, Exchange and ask to activate "Gemini Active Trader". When this is validated, the interface changes (much less intuitive), however the fees are divided by five (0.3%). That changes the situation considerably...
This is going to be a game changer for trading Bitcoin:
https://www.purposeinvest.com/funds/purpose-bitcoin-etf
World's 1st Bitcoin ETF
Good morning,
As advised, I tried to buy BTCC.U via IBKR but impossible…
Apparently IB is blocking purchases of ETFs by Europeans following the MFIID2 directive
It's a shame!
It works fine for me. Maybe because I am a Swiss resident.
What error message do you get?
Otherwise try via Coinshares XBTE ETN
more info:
https://www.dividendes.ch/2020/12/portefeuille-determinant-acheter-bitcoin/
I even discussed in chat with IB: purchase of BTCC.U impossible due to EU regulations..
Otherwise, you can actually buy the ETN XBTE.
Thank you Jerome.
Too bad, but XBTE also does the job very well.
My pleasure