[Jerome]

It also proves, once again, that getting rich (or poor) is less a question of income than of spending.

[Jerome]

Very interesting. I skipped some chapters because it's really long.

But I have always liked economic history and macroeconomics, and here we are served.

[Jerome]

I didn't know. The offer on paper looks pretty good. There are even apparently Japanese stocks (be careful, I'm wary because some brokers like cornertrader advertise Japanese stocks and there are actually only big caps...).

However, they advertise the lowest rates on the market. This is perhaps true compared to Swiss intermediaries. But compared to brokers like DEGIRO or especially Interactive Brokers, they are much more expensive, whether for Swiss or foreign stocks. The commission rate on Japanese stocks is even downright prohibitive.

In short, a little competition, especially in Switzerland, is always good. We'll have to see the feedback from users. In the meantime, as far as I'm concerned, I'm sticking with those who have proven themselves (and who are cheaper anyway).

[Jerome]

My bad. I'm going to cancel and re-register 😉

Well, that would cost me a bit in securities transfer fees! 🙂

They had a similar offer at the time (they charged 500.- in transfer fees for securities to their home)

[Jerome]

Be careful, I think there is a bit of confusion:

500 CHF trading credit is huge.

Dividinde is talking about 90 CHF credit

Ok so the 6 ETFs for a proportion of 50,000 CHF spread over several months? I see that the target is 49% of the portfolio, but to start it is therefore 100%.

Read my book carefully. There are several types of ETF portfolios. Some are buy&hold and the determining portfolio is of the TAA type (adaptive-tactical asset allocation). The target you mention is only an example at a given time X in the book. It varies over time. To know the current allocation and weightings, you need member access premium. These 49% mentioned also represent only the share part, not the entire portfolio which is obviously 100%. Concerning the spread over several months, if you start with the determining portfolio, you no longer have to ask yourself the question. You enter an ETF by following my movements, when there is a monthly change. So it will be done gradually anyway. Look at the instructions for using the portfolio here: https://www.dividendes.ch/2020/12/portefeuille-determinant-acheter-bitcoin/

What percentage of the 50,000 per ETF should I put, because 50,000 CHF divided by 6 = 8333 per ETF.

All weightings are shown in the portfolio. As indicated they vary over time.

You are obviously not obliged to follow the determining portfolio. I am not pushing you to consume 🙂 You will find plenty of other examples of portfolios, including buy&hold ones in my book. You should find what you are looking for there. There is something for all tastes and all objectives.

If you want to ask more detailed questions about these portfolios or elements of my book, I encourage you to create a new topic in the members-only section (I've given you access). Thank you.

I forgot when you place the purchase orders, so you place the order at the "Market" price?

It depends. For very liquid stocks I don't bother and I place a market order. I use limit orders only for illiquid stocks.

Don't hesitate to read and reread my work because it is very dense. Also browse the blog and the forum (especially the members section).

[Jerome]

Given the amounts involved, if you want to start with the determining portfolio, only with Postfinance, I advise you to follow the variant based on ETFs only (for “average capital”, cf. https://www.dividendes.ch/2020/12/portefeuille-determinant-acheter-bitcoin/)

This will give you at most 6 well-diversified ETF positions and there are few transactions, which will limit your costs.

This will also allow you to gradually familiarize yourself with the stock market and then move on to a mixed ETF/stock strategy.

 

[Jerome]

Hello Caribou

I'll let Dividinde complete, but PF automatically opens foreign currency accounts for you. What fees are you talking about when you pay money into the account? I haven't noticed any fees at home. There are no Vanguard ETFs. You have to go through IB for example for these ETFs. But you can find ETFs from UBS or iShares at PF for example.

PF offers a "smart" package at 5.- per month. If you have a fortune of more than 25,000 with them, it becomes free.

For the frequency of purchases, there is no rule, because it depends on the assets you have to invest, the cash inflows, the transaction amounts and the market valuation. I would say to space them out at least three months apart. So a purchase frequency between 2 and 4 times a year.

[Jerome]

Do you recommend real estate ETFs or if I have to create an ETF portfolio with 50,000 CHF what proportions would you advise me?

 

I'm going to repeat myself, but read my book. You'll find plenty of stock portfolio and/or ETF suggestions that you can choose based on your criteria.

A real estate ETF is a very good starting point anyway.

 

[Jerome]

Hi Caribou,

1) By "don't buy in bulk" I mean don't buy all your ETFs/stocks at once (all your cash). Stagger your purchases, one position at a time. The market is very high right now. You have time. Start by educating yourself, buy one ETF, wait a few weeks or even months and buy another ETF. It's already a good start. When you feel ready, move on to stocks.

2) I'll let dividinde answer this point, it's his specialty. In principle you should find the info on the letter to shareholders, but there may be an easier way than going through them all.

3) detailed answer on this point in my book. In any case, as already said, avoid large dividends, both from a financial and tax point of view.

4) It simply depends on your investment style and the time you can devote to it. If you don't want to bother at all, you stick to ETFs in b&h and you don't have to do anything (but that poses other problems that I won't discuss here, see my book for more information). For buy & hold stocks, a check of the annual financial statements is enough. To do this, you obviously need to know how to read them (start by reading The Intelligent Investor by Graham, it's a good start. There's also Security Analysis, but it's for a much more advanced level). See here for these books: https://www.dividendes.ch/lectures/). Afterwards you can also be a little more active, via an asset allocation portfolio, as I propose in the premium part. Since I do the work for you, it takes very little time. But you don't have the pleasure of doing it yourself 🙂

Regarding your last remark. I have no experience with crowdfunding, but it doesn't tempt me at all. Don't forget that the stock market offers an average annual return in nominal terms of 10%, 7% in real terms. See under readings the reference work by J. Siegel, "investing in long-term stocks". It's an excellent book. It is true, however, that the current potential for future valuation is considerably reduced given the height of the market. This is why you have to spread out your purchases... and buy cheap (even if it has become difficult).

 

[Jerome]

With pleasure and good reading!

[Jerome]

In addition to the size of your portfolio (50k), it is obvious that you should not directly target that many positions. That would make the lines too small and would cost you a lot in transactions. That is why, as dividinde said, you should gradually enter the market, especially since it is very expensive at the moment. You could mix ETFs on about half of the portfolio and treat yourself with stocks on the other half. The basic investment can be higher for an ETF than for a stock because of the diversification. We could imagine something in the order of 10k for an ETF and 5k for a position in a company's stock. This is an order of magnitude, to be adjusted according to your tastes and your propensity for risk.

But again: don't buy in one go...but rather gradually.

[Jerome]

Again, I agree and I also aim for around 35 positions. Research has also proven that it is around 40 positions that we best reduce risks without compromising performance. If we deviate too much to the downside, the risk increases radically, particularly below 20. Conversely, if we deviate too much to the upside, transaction costs hamper performance, without providing marginal diversification. This is particularly the case beyond 50 positions.

[Jerome]

I agree with everything my brother dividinde said.

– regarding your last question #3: if you want to pay low transaction fees, go to Degiro or Interactive Brokers. However, for buy & hold, the transaction fees are relatively low. Postfinance is not the best market from this point of view, on the other hand the custody fees are zero. Which answers your question #4. Dividinde will certainly also tell you to look at corner trade. I'll let him answer that subject 😉

– for question 5: if you do pure b&h, on large solid companies such as those provided for example in the dividend list, you do not necessarily need capital protection rules. It is an individual choice. Small clarification: the rule you mention (and that I apply) has nothing to do with the automatic stop loss orders that we set at our broker. It is a risk management rule to follow “manually”. Automatic orders are useful for traders, not for the type of approach used here.

 

 

[Jerome]

Agree with you. A studio in a city, especially a big city like Geneva, will always be rented.

Thank you for your order!

I suggest you read my book before buying your shares. It will probably make you see things a little differently. It is difficult to answer your question simply. The market is currently very high, especially the big solid companies that you are looking for. It is also tricky to limit yourself to only five stocks. Even a big cap above all suspicion can reserve very bad surprises. I know something about it. For a portfolio up to 50,000 I recommend ETFs. From 50,000, I recommend mixing ETFs and stocks. But as I said, read my book first. It will become clearer.

[Jerome]

Hello Caribou

It’s always a pleasure to read from Quebec readers.

Congratulations on your career. You had a rocky start and you were able to bounce back. It also reminds me of my career, in terms of the stock market, real estate, professionally and privately.

I am also a supporter of real estate. Like you, I own several physical assets. I also have some in ETFs. I increasingly prefer the latter means of investing in property, because physical assets are not diversified enough for my taste. Management is also much heavier and more complicated, both administratively, fiscally and legally. In addition, with the profusion of new apartments that have arrived on the market, the vacancy rate is increasing. You are talking about Valais, I know this market very well. It is saturated from a rental point of view in several cities. Finding yourself for several months without rental income is frankly a more pleasant experience. In short, I prefer real estate ETFs, which are more diversified and require significantly less work. You can also get rid of them with a click of the mouse if necessary, unlike property.

Regarding your questions, you will find detailed answers in the tutorial, the forum and in my book. In short:

1) Yes of course. I suggest Postfinance, Degiro or Interactive Brokers.

2) The yield of a security is only the result of the fundamentals. This is what must be examined. A yield that is too high is generally a bad sign. A stock market investment brings you on average 10% per year in nominal, 7% in real.

3) yes, see: https://www.dividendes.ch/?s=dividendes+exon%C3%A9r%C3%A9s and also read the comments on these three articles

4) especially not

5) then you are in the right place, as indicated take the time to browse the site, there are more than ten years of thoughts on the subject 😉

 

[Author]

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