Interactiv Brokers questions

[PloutosNX]

Good morning,

So here is the subject that has interested me for some time and I allow myself to come and ask some questions to my compatriots in order to be able to benefit from their experience, opinions. I went through the site, but I did not find these answers to my questions.
It's long and with a lot of questions, I hope I don't lose you along the way!

I am thinking about using an online broker in order to optimize the various fees, because according to my investment ideas, namely mainly ETFs, with fixed amounts per month, the fees of most banks are prohibitive compared to the contribution that I want to put in per month.

After much research it seems to me that Interactive Brokers IBKR is the one with the most advantages and it seems to me that several of you, including our host Jérôme, use it. But I could be wrong in this choice and maybe you will have another broker proposal that is better for a Swiss citizen and maybe having your money and assets in a broker / bank closer is a gain in security. I have already done some research and comparison, here is a non-exhaustive list of those I have already looked at: Migros, Postfinance, Interactiv Broker, Saxo Bank, Strateo, Degiro, Swissquote, Keytrade.
I also wonder about the problems later on for opening an account in Switzerland if you have an account with a broker in the USA, when you open a new account you are asked each time if you have one in the USA and if so I think that this blocks everything, do you have any opinions on the subject?

So here is my use of this broker. I plan to use it mainly to invest in trackers (World, S&P500, etc.) and invest regularly. I think I will try an optimization later, but for the moment I will be content to buy for the same amount as I go. I am not yet experienced enough to invest directly in stocks.

Here are some questions about IBKR that I haven't found obvious or clear-cut answers to.

1. I found that IBKR allows to transfer CHF to a Swiss IBAN (since 2017), but some people say they have problems. Do you have any feedback on this? Have you had problems sending to IBKR or receiving from IBKR to your current/savings account in Switzerland? Is it possible to make a withdrawal/transfer from IBKR in a currency other than CHF?
2.  How do you declare the account (or accounts in different currencies?) to the tax authorities? Do we receive a certificate or can we print a document? If not, how do you mention it on the tax return?
3. Is the "recipe" ( https://www.dividendes.ch/forum-2/topic/interactive-brokers-et-declaration-dimpots-suisse/ ) described by our host here to obtain the data at the end of the year for the tax return still current? Or is it simpler to enter each position in the annual tax return?
4. Is the base currency better in CHF, USD or EUR?
5. The IBKR website discusses information about interest in this page "Interest Rate Schedule" ( https://www.interactivebrokers.co.uk/fr/index.php?f=39726&p=schedule ), I'm not sure I understand. This is the fee (daily) that I will be charged on uninvested cash (cash balance) (Interest paid on inactive cash balances) and this is based on the value of assets in my portfolio?

I tried with a demo account and didn't really find the interface easy to use. This is just me and my almost zero experience for sure, but if any of you could enlighten me on these different topics, I would be grateful.

1. How can I avoid being fooled by margin or leverage? I don't intend to use them, but is there anything I can do to surely disable or control each order to avoid this?
2. How to exchange/convert CHF to USD or EURO and vice versa? I saw the CASH or SMART (CFD) option, but with CASH (which I think I should use) there are two options (IDEALPRO or FXCONV) and I'm not so sure I really understand how to do it, could one of you give me a procedure?
3. There are several types of accounts and a minimum of 10k$ is required to register, but I seem to have read that an amount of 20k$ is required to have access to all markets and products, is this correct or do you have other information?
4. I also don't understand their borrowing system when you don't have the right currency, this seems automatic, but how can I avoid it? My goal is to make long term investments and purchases, so if I can avoid paying interest on money I have in the account, because I don't plan on using more than I can afford to lose as always.

I think a lot of questions are because I'm a newbie and IBKR is professional oriented. I tried to be as clear and structured as possible.
Thank you for your insight and perhaps you have some reading to recommend to help me understand better.
Xavier

[Jerome]

Yes, that's a lot of questions all at once. Don't worry, you're a novice and your brain's all over the place. Don't try to solve everything at once, you'll have to go your own way and experiment. On paper, you'll find lots of nice things and good advice, but until you've really tried things out for yourself, you won't know if they're right for you. Practice makes perfect. Nevertheless, to save you some time and trouble, here are a few answers.

For the broker, check out this topic if you haven't already: https://www.dividendes.ch/forum-2/topic/frais-de-courtage/

I advise you to have two financial intermediaries, one in Switzerland, for rather classic, buy & hold oriented securities with large positions. Postfinance is a good option. Swissquote too. Migros is too expensive (watch out for custody fees). Then you need a cheap broker for smaller and/or less long-term-oriented transactions and/or for more exotic stocks (Japan, emerging countries) and/or if you want to have fun shorting certain indices or stocks (which I wouldn't recommend, at least for the time being). IB is a good option.

I've never had a problem with my Swiss accounts since I've had accounts in the USA. Well, I haven't opened a Swiss account since, but I don't see why that would be a problem. In any case, automatic exchange is now mandatory in both directions.

For detailed questions about IB :

-I've found that IBKR allows you to transfer CHF to a Swiss IBAN (since 2017), but some people say they have problems. Do you have any feedback on this?

=> never tried it, I didn't even know it was possible. Personally, I make an international transfer, which is fairly easy to do, no problems found, money transferred quickly. I created a payment template so that today I can do it in a few seconds.

Have you had any problems sending to IBKR or receiving from IBKR on your Swiss current/savings account?

=> Never any problem to send. It's fast. I have never tried to credit my account again.

Is it possible to make a withdrawal/transfer from IBKR in a currency other than CHF?

=> Yes, in fact in my case, I had to skip a step during the account opening process, but I have a cash account in dollars. So I send USD to IB from my personal account. Maybe if I send CHF it will create a CHF cash line. I've never tested it yet because IB charges negative interest on CHF, like all foreign banks. Anyway, whatever the currency, you can easily buy/sell forex pairs to build up your liquidity in other currencies.

How do you declare the account (or accounts in different currencies?) to the tax authorities? Do we receive a certificate or can we print out a document? If not, how do you declare it on the tax return?

=> There are many predefined reports, but you can also create your own templates, which is what I did (as you indicate below).

Is the "recipe" ( https://www.dividendes.ch/forum-2/topic/interactive-brokers-et-declaration-dimpots-suisse/ ) described by our host here for obtaining year-end data for the tax return still current?

=> Yes

Or is it simpler to enter each position in the annual tax return?

=> I was doing this at first, but you'll see that the above-mentioned report or the tax statement from Swiss financial intermediaries will save you an awful lot of time. Filling in the tax return for each position becomes very cumbersome, especially when you have to note quarterly dividends!

Is the base currency better in CHF, USD or EUR?

=> I think you mean the currency displayed for the account for valuation / performance calculation. I'm using CHF since it's my reference currency, but you can change it in a few seconds. It's purely indicative.

The IBKR site deals with information about interest in this page "Interest rate scale" ( https://www.interactivebrokers.co.uk/fr/index.php?f=39726&p=schedule ), I'm not sure I understand. Is this the daily fee I'll be charged on uninvested cash balances (interest paid on inactive cash balances), based on the value of the assets in my portfolio?

=> no, interest is credited to you according to the currency in which you have cash (charged for CHF). IB, on the other hand, charges fees on accounts of less than 100,000 USD or which don't have many transactions (less than 10 USD in commissions per month). In this case, they will charge the difference up to 10 USD. See: https://www.interactivebrokers.co.uk/fr/index.php?f=6780

Nevertheless, even if you're not very active and don't have 100,000 USD, IB doesn't charge any custodian fees, and transaction fees are derisory.

I tried it with a demo account and didn't really find the interface easy to use. This comes from me and my almost zero experience, for sure, but if any of you could enlighten me on these various topics, I'd be grateful.

=> you amaze me. I'll surprise you too: I never use TWS. I only use the smartphone app. It's super simple and user-friendly.

How can I avoid being fooled by margin or leverage? I don't intend to use them, but is there anything I can do to surely disable or control each order to avoid this?

=> just open a cash account (not a margin account). You won't be able to short sell either. In any case, if you don't have at least 25,000 USD, you can't open a margin account. See my next article, which explains several points about opening an IB account, including account types: https://www.dividendes.ch/utiliser-interactive-brokers-avec-le-trading-auto-signal/

How do I exchange/convert CHF to USD or EURO and vice versa? I've seen the CASH or SMART (CFD) option, but with CASH (what I think I should use) there are two options(IDEALPRO or FXCONV )and I'm not so sure I really understand how to do it, could one of you give me a procedure?

=> as explained above, you need to buy/sell forex positions. It may seem a bit complicated at first if you've never done it before, but in the end it's exactly the same as changing money at the bank.

There are several types of account and a minimum of 10k$ is required for registration, but I seem to have read that an amount of 20k$ is needed to have access to all the markets and products, is this correct or do you have any other information?

=> you can start with 10,000 USD. I don't remember being limited (except for the margin and short-selling thing).

I also don't understand their system of borrowing when you don't have the right currency, which sounds automatic, but how can I avoid it? My aim is to make long-term investments and purchases, so if I can avoid paying interest on money I have in the account, as I don't intend to use more than I can afford to lose as always.

=> with a cash account, you don't have this risk. You won't be able to buy a security if you don't have cash in the currency of the security concerned. On the other hand, with a margin account, if you buy a position in a currency where you don't have cash, your cash balance in that currency will turn red and interest will be charged. In this case, all you have to do is buy the corresponding forex pair to turn the balance back into green.

 

In short, IB is very simple indeed. Especially the smartphone application. You just have to try it out and you'll soon understand how it works.

[PloutosNX]

Hello Jerome,

Thank you for taking the time to answer my questions.

I had already read and reread the post on brokerage fees and that's why I wanted to go with IBKR.

I will take note of your first advice and have two financial intermediaries, including one in Switzerland which will certainly be Postfinance (my wife will be happy that will make yet another account!). Concerning Migros I know well their uncapped custody rights… I have already looked elsewhere, but it is either even more expensive, or it is not possible to have the products/funds.

My comment about the US account is that I recently opened an account at a new bank and the multiple choice question was required. I don't know what the consequences would have been if I had to check the affirmative cross.

My idea of sending in CHF and not in USD or EUR is mainly to avoid the often quite high conversion fees added to the interbank rate.

I will try to take different answers to talk about it again if you allow me.

1) The fees of 10$ per month at IBKR are really low I think, especially since it is without buying/selling action. The perverse effect of the 100k is the negative rate if you are in CHF and my goal was not to convert everything at once, but to do it regularly to also smooth the exchange rate in the event of a large variation (it is rare, but we have already had the EUR-CHF example)

2) The smartphone app is even worse I think! I tried it too and I didn't find one more pleasant/simple than the other.

3) Thanks for the link to the article on choosing an IBKR account. If I understand correctly, equal to the value that I load when I register (so greater than 25k or 100k for a Margin Portfolio), I could choose to have only a cash account with 100k (but modifiable later if I understand correctly).

4) I tried to buy/sell Forex positions, but I managed to get strange positions called "(FX Portfolio - Virtual FX Position)" and nothing in "Market Value - Real FX Balance", so here is my question regarding the two options (IDEALPRO or FXCONV) and the correct method to use them and have real fiat currencies.

But as you say, practice makes perfect, however I prefer to inform myself and understand everything, or as much as possible, before undertaking anything.

I will certainly come back with other questions, but in the meantime I will continue to document myself on the different solutions. Postfinance seems to me to be a good alternative to have a large part in Switzerland, but compared to the monthly contributions and purchases that I plan to make, I wonder if Strateo (also based in Switzerland) would not be better, even if in buy & hold, the fees are not the most important, they still play a role.

Thank you for reading and I look forward to reading you too,

Xavier

[Jerome]

I don't know Strateo.

To return to the points:

1) Right. You don't want to throw 100k at IB all at once. You gradually build up your positions and buy your shares with their corresponding currencies. You shouldn't leave 100k in CHF on IB. I currently hold shares and cash, but in JPY.

2) I promise you that the APP is very easy to use. In any case, if I compare it to Postfinance's, which offers almost nothing, it's simpler and faster.

3) yes, whatever the amount, you choose the account. You can even easily change it later, in any direction.

4) I don't know what this is about, I don't have these problems. I trade forex pairs. In my opinion you should take the IDEALPRO cash option, but not CFDs. It's supposed to be the closest thing to how I trade forex. On the app it's very simple, you type USD in the search field, for example, and the first thing it suggests is "USD IDEALPRO", which you select, and underneath that you choose forex, and then you have all the dollar-related pairs displayed, so you choose e.g. USD.CHF if you want to buy (or sell) dollars against the Swiss franc, and that's it.

[PloutosNX]

Hello Jerome,

Thank you for taking the time to answer my questions and comments and sorry for the response time!

It is true that it may not be ideal to put so much money into IBKR from the start.

I didn't have time to look at the app in more detail, but I found an answer regarding "real" and "virtual" FX on this link ( https://forum.mustachianpost.com/t/interactive-brokers-for-dummies/447/10 →Search for "Virtual"). This would be a bug at IBKR as an explanation regarding real and virtual funds. Maybe this information will be useful to others as well.

I have two questions regarding the Postfinance account and their e-trading, maybe with your experience you can answer me.
1) I read that it opens CHF/EUR/USD accounts directly with an e-trading account, but can these accounts be used to receive and send funds in their currency from other banks/brokers or are they "just internal Postfinance deposits"?

2) What is the currency conversion rate that Postfinance uses? My question is more precisely what is the margin that they take on the interbank rate? I have not been able to find this answer on their site, maybe you have already encountered it.

3) A third one comes to mind, do you use their e-trading tax statement or is there another way to not have to order it?

Now as they say, all that's left is to get started! I'm already going to open an account at Postfinance and then at IBKR and at the same time set up a simple investment strategy (based on a few ETFs). I'll keep you posted.

Have a nice weekend,
Xavier

[Jerome]

Hello I looked at this link and it seems to me to bring more confusion than answers. As I said, you have to practice and not get bogged down in false problems. Winning 10 balls on a transfer of 50,000 balls is 0.02%... It's always good to take but if you worry about that, you'll overlook bigger problems. Ditto when they talk about whether to place a limit order on forex to change currency... It doesn't really make sense on such a liquid market and on such small positions. And again, there's no point in worrying about open forex positions if you're using IDEALPRO, because you can hide them very easily via the app, if that's what's bothering you. You can also normally use FXconv to do 'normal' forex if you have a simple cash account. I can't with my margin account. Well, I don't think so, because I use IDEALPRO and in the end it doesn't make much difference.

An interesting link: https://ibkr.info/node/1267

For your questions :

1) You can't, and there's no point. In any case, current account transfers to trading accounts are instantaneous 24/24.

2) I don't know, but you're actually giving me the idea of transferring chf to IB next time, rather than USD.

3) The tax statement is not delivered by default. You have to request it once, and then it's sent automatically every year, unless instructed otherwise. I recommend it when you start having several positions, especially abroad. It costs a flat fee of 90 francs, regardless of the number of positions. It's really not expensive compared to what's available elsewhere in CH.

 

Let's get to work 😉

[PloutosNX]

Good evening Jerome,

Regarding the first "problem" for me is not to save, but to avoid actually having a credit (or a loan) on funds. My goal is to really convert and own this fiduciary value. I don't think I talked about limit orders on forex (besides this doesn't really speak to me, I must have said something that makes you think of it, but that was not my intention, I am too novice for this.)
So you answered my question with just the "normal" cached account and using FXconv.

Thank you for the answers to the questions. I will try to argue why they came, so that you understand my vision better.

1) My goal was to be able to transfer funds in a foreign currency (USD or EUR) from IBKR in order to avoid having to make several round trips with CHF.

2) Having lived through another bank (which is nevertheless known to be low in these fees), these were 0.75 %, so if we take the case of a round trip 1.5 % and it was also for fairly large amounts (>50k), otherwise it is 1.5 %.
I think you now understand my request better and also the first question. I will have to look at the possibilities that Postfinance offers for accounts in EUR and USD in addition to CHF. My goal is not to bother saving a few francs, but these percents in the end give a significant difference, that's why I wanted to know if it is possible to make transfers to these Postfinance e-trading accounts and also with IBKR.
I think I've put my finger on a point that you will certainly look at in order to optimize even better.

3) It was just a question of whether or not it was interesting to have it. I never had one.
need for the moment with max 1 fund at a time.

There's a sentence you said that I'm picking up on: "It's always good to take, but if you worry about it, you're going to overlook bigger problems."
Do you have anything specific in mind? Do you have any information to share on what to watch out for?

I still have a bit of research work to do before I really get started.

Have a nice evening,
Xavier

[Jerome]

We misunderstood each other. I was talking about what was written on the link you sent. I know you didn't talk about limit order.

1) OK, I understand, well I try… But why do you want to go back and forth several times? Since I opened my IB account I have never sent any cash back.

2) Same as above. Yes indeed it would be better if we could not change the currency during transfers, but in the end if you only make a round trip every ten or twenty years your difference is quite negligible compared to the gains generated on the stock market. I will perhaps ask myself the question when I live off my dividend income, but certainly at that time I will repatriate my foreign funds to Switzerland. But perhaps you are already an annuitant??? I would understand better then!

That's what I meant to say to answer your last question. The important thing is to invest in investments with a good quality/price ratio, to diversify them and to hold on over the long term. You also have to be prepared to suffer losses and therefore your investments correspond to your propensity for risk. Yes, you may lose 0.75% on foreign exchange, yes you will also leave commissions along the way and custody fees, especially if you choose your intermediaries badly (but there you are well on your way), but you must be prepared to lose even more.

What will happen when your investments have plunged by 10, 20 or more %? Will you be strong enough not to sell and continue to buy as is apparently your strategy? Or will you also be strong enough to sell and cut your losses as another strategy could also? Are you diversified enough to avoid too big crashes… etc.

Don't worry, you don't need to answer all of these questions. In fact, you will only be able to answer some of them once you have experienced them.

[PloutosNX]

Hello Jerome,

It is certain that some questions are still impossible to answer, but these discussions are very interesting, because even by deviating from the main subject, each person's experience allows us to learn and to enrich ourselves with other experiences or ideas that we would not have had by remaining alone.

I am far from being a pensioner yet! I have barely reached half of retirement age! But I might as well prepare as soon as possible, because here time is the determining factor and also the ability to follow one's strategy.

I will already answer a general question regarding the loss, I have already experienced this a few years ago, it was even more than 25% and on a substantial amount, but I did not move, I simply waited. What I regret today with this experience is to have bought in one transaction and not with a smoothing over several months. This is the experience that I learned, hence my idea of strategy today.

I will try to explain my current reasoning. It has changed since the beginning compared to our first discussions. Now my goal is to have the largest part of my assets on Swiss soil, this to avoid problems that may arise with other countries and new regulations.

I know that the past does not predict the future, but in the long term and if we analyze in a purely mathematical way, we know that the stocks had a return of 3.5%.

If we take a simple example and try to be as realistic as possible with Postfinance, if you invest 500CHF per month in an S&P500 ETF in USD. There will be a percentage for the exchange, looking at yesterday's rate offered at Postfinance (https://www.postfinance.ch/fr/particuliers/assistance/outils-calculateurs/calculateur-monnaie.html) and the interbank stock exchange zone (https://www.zonebourse.com/SWISS-FRANC-US-DOLLAR–2389514/?type_recherche=rapide&mots=chf_usd), we have for amounts less than 50kCHF a value of 1.4% (and for amounts up to 250k it is 0.9%).
Then there is the purchase of the ETF, for an American place it is 25USD up to 1000USD (so min 2.5%, friends with 5000CHF or 500USD it is 5%), so for my 500CHF of departure it makes 1.4% + 5%, we are at 6.4% which is 2 times the average value of the return of the shares on the very long term or if we look at the S&P500 on the last 6-10 years, we have not gained or lost anything and therefore we start to gain after 1 year, this of course without the resale and the conversion in CHF. It would therefore be necessary to wait 2 years to be at a zero balance sheet in the case where the markets are strongly bullish.

I hope I haven't lost you along the way and that my reasoning is correct, otherwise I would be happy to have been wrong!

If we now take the same example with our 500CHF invested every month, but we use IBKR and we repatriate these assets once a year to Postfinance to have our capital in Switzerland. There I think you understand my questions concerning the chain of sending money in CHF on IBKR (with a good IBAN), then the conversion into physical fiduciary currency and not "virtual" and then the return (or sending from IBKR) of USD to Postfinance and a USD account.
Here are the costs for this second reasoning:

– CHF account -> IBAN IBKR in CHF 0.-
– Conversion 500CHF to USD approximately 1USD
– Purchase of the S&P500 ETF very low (around 1USD)

Do this every month for 1 year, you then get around 6000USD (you then have to also remove the IBKR fees of 120USD annually, but as for Postfinance I did not take them into account, we do the same here)

– Sale of the ETF 6000USD (or more if the year was good) fees also low (10USD)
– Transfer from IBKR to USD account in Switzerland IBKR fees 0.- (free once a month), then you have to see what for example Postfinance charges you to receive foreign currencies on a foreign currency account
– Purchase of the same ETF S&P500 at Postfinance 40USD for an amount between 5k and 10k, therefore between 0.8% and 0.4%.
I think that all in all the real value will be 0.6% to 1%, against 6.4% and this is only for the purchase, we are not talking about reselling and then living with the gains.

I agree with you that these costs of 6.4% (or 13% if we calculate the resale) can be considered as zero in the long term, but this is not negligible and I do not think that the time or energy to do the second solution is so great compared to the profitability.

I look forward to reading you and having your opinion on this. I hope I am not mistaken in my reasoning, but as already said, if this is the case and the costs are lower it would be really good news!

Have a nice weekend,
Xavier

PS: I don't focus on costs alone, but for me I need an overall vision and to be sure before launching, because if it is not profitable and especially if there is a hesitation to exit at a sharp drop, because the costs incurred would be greater than the losses or worse, everything would accumulate more than significantly, it would be better to stay in cash in a savings account.

 

[Jerome]

My god, this is all complicated. If you put all this energy into studying fundamental analysis, you would already be a worthy disciple of Benjamin Graham :)

You say the stock market has an average annual return of 3.5%… By return, that means dividends only. The total average annual performance on the S&P 500 is for example in the order of about 9-10% in nominal terms, 7-8% in real terms.

To avoid the hassle of transaction/exchange fees, why not invest directly in Switzerland in a Swiss ETF, listed in CHF?

I still don't understand this back and forth you want to do between IB and Postfinance, it doesn't make sense (send cash every month, buy the ETF, sell it, then send the money back to CH and buy the ETF back). I understand that you want to do dollar cost averaging, it's a good strategy, but you don't need to have such a complicated system to do it. Buy either in Switzerland or at IB.

You don't have to buy every month either, every other or third month is also fine. Just so the fees don't represent too much compared to the position purchased... That's what I did at the beginning.

I have a Postfinance account for my large classic positions that I keep for a long time and an IB account for small more exotic positions that I keep for a shorter time. And I assure you that I am well beyond the 3.5% average that you quote.

 

[PloutosNX]

Hello Jerome,

Fundamental analysis will of course also arrive, don't worry! But first I will continue with technical analysis, to better understand the patterns.
Time is an important factor, but understanding the issues, principle and knowing where you stand is something essential for me. I think I read that your strategy with your indicator and signals took you 1 year to implement and test, so you also always think before doing something and you don't jump in blindly, that's one of the reasons why I appreciate your site and reading you.

The average annual return is over a period of several decades, but I agree with you, that today with a world index, S&P500 is more towards 5-7% with inflation.

I think I didn't describe it well, because I don't plan to go back to CHF with what would be converted on IBKR, but to stay in the currency of the index, action that was used.

I also thought in my strategy to invest directly in Switzerland listed in CHF in order to ensure diversification.

Of course I don't have to buy every month, but after a lot of research, backtesting and other analysis I come to the conclusion that it's the best way.
Here we are of course only talking about the money that will be invested "automatically" monthly. I have not yet mentioned my strategy for entering into a position with the capital already available... but to keep it simple in this case, my reading will be done over 6-36 months, to be defined when everything is in place depending on the current situation.

Thank you for all your comments, clarifications and help. I will be able to continue my research in order to find the best solution.

Have a nice end of the day,
Xavier

[Jerome]

No, the S&P 500 with inflation has a historical average annual performance of 9-10%.

And I advise you against technical analysis, you will waste time and money. Not only has it been proven that it does not work, but I also unfortunately speak from experience. My friend dividinde would tell you the same. If you can avoid making the same mistakes as us, that would be a good start.

However, I strongly advise you to read Jeremy Siegel's book "Investing in Long-Term Stocks", which you can find on my reference works page:

Reference works

 

[PloutosNX]

Hello Jeromes,

Thanks for the advice.

My idea with graphical analysis was mainly to be able to detect in which phase of a cycle we are and to be able to find an interesting entry or exit.

I don't know Jeremy Siegel's book, but I'm going to order it to read it and do the same with Benjamin Graham's which has been catching my eye for a long time.

Even if at the beginning I will be content to diversify with simple ETFs.

On this subject, I have a little problem understanding your asset allocation. If I understand you correctly, you invest in dividend-growing stocks, but in your monthly allocation table, these are references to indices, so you use ETFs or did I miss something?

Have a nice weekend,

Xavier

[Jerome]

You didn't miss anything.

I follow the indices in a top-down approach. If the index as a whole is too expensive or in a bearish phase, I don't look any further. On the contrary, if it is cheap and in a bullish phase, I put on my glasses and look for good candidates.

For beginners or those who don't want to bother, they can stop directly at the ETF. Which is what I personally do for gold, bonds and real estate.

For more details read my series of articles on portfolio diversification in the tutorial.

[PloutosNX]

Good morning,

Here I am again with some answers or additional information.

If we come back to the questions concerning IBKR, it is possible and simple to send CHF directly to their account with a Swiss IBAN and everything works perfectly.
It is also possible to transfer CHF, EUR or USD to accounts in Switzerland, you just have to set this up correctly at IBKR. The advantage of converting funds with IBKR is that the fees are very low (around 2USD up to around 100k), we are far from the 1%-2% of our banks for fees. You just have to be careful to use FXCONV and not IDEALPRO when buying/selling the currency.

I have also taken the opportunity to read some of the books you recommended on investing and this has led me to new thoughts and questions.

I'm starting to understand the advantage of dividend growth stocks, as well as so-called aristocrat stocks, over simple ETFs and your top down approach (indices -> stocks).

But how do you define that a market/index is "too expensive"? Because today I find them all very very high.

Regarding the search for opportunities for dividend growth stocks, what tools do you use? I don't think you go through every report of every company in existence or even part of an index to find them?

Good day,
Xavier

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