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  #41  
Old 11.01.2016, 16:20
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Re: Very long term investment for dummies

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2 properties = 1%, I'm impressed.
99% equities aged 32, not 99% at retirement, At death I expect equities to exceed 80% if not 90% as I said before.
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  #42  
Old 11.01.2016, 16:28
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Re: Very long term investment for dummies

I'm not a UK citizen - so all tax advantages this may or may not have don't apply to me anyway.
Plus, I loath the currency-bet I'm invariably going to take.
Yes, the whole Swiss economy is more or less one big, fat currency-bet (something like 80% is exports) - but my salary is paid in CHF and so will be my pension (as of today...).
Until last Summer, all my savings were cash (or BVG/3rd-pillar), then ZKB finally talked me into one of those "Vermögensverwaltungs"-thingies, which is a fancy word for "lots of fees and small, stable returns - unless the market is down"..

So, I'm not sure if I should put any more money into this.
The problem is that I hate paying the fees when the ROI is negative. That just doesn't feel right ;-)

With fundsmith I just fear that I'm "too late" to the game and it will only go down once I buy in - like if I would buy Apple or whatever stocks now...
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  #43  
Old 11.01.2016, 16:34
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Re: Very long term investment for dummies

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With fundsmith I just fear that I'm "too late" to the game and it will only go down once I buy in - like if I would buy Apple or whatever stocks now...
I still buy stocks I pick myself, but I also bought fundsmith because:

1. Like every other investor, I think I'm brilliant and so what I buy will increase in value spectacularly
2. That said, I could be wrong and so fundsmith has someone else who picks stocks for a living and hopefully is good at it
3. Having someone else do it means you can push money in and forget about it

Regarding the "too late" line of thinking. I lost more money due to that thinking than for any other reason. e.g. ARM at 300 was already pricey and maybe gains already priced in. FB at 30 looks steep. bitcoin at 30 seems a bit much. etc.
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  #44  
Old 11.01.2016, 16:37
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Re: Very long term investment for dummies

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I'm not a UK citizen - so all tax advantages this may or may not have don't apply to me anyway.
Plus, I loath the currency-bet I'm invariably going to take.
Yes, the whole Swiss economy is more or less one big, fat currency-bet (something like 80% is exports) - but my salary is paid in CHF and so will be my pension (as of today...).
Until last Summer, all my savings were cash (or BVG/3rd-pillar), then ZKB finally talked me into one of those "Vermögensverwaltungs"-thingies, which is a fancy word for "lots of fees and small, stable returns - unless the market is down"..

So, I'm not sure if I should put any more money into this.
The problem is that I hate paying the fees when the ROI is negative. That just doesn't feel right ;-)

With fundsmith I just fear that I'm "too late" to the game and it will only go down once I buy in - like if I would buy Apple or whatever stocks now...
I look at 'value' & I don't see any in the CHF today so would happily not be reliant on just CHF assets & income. A potential double whammy if you loose your job.

I have no idea what the price will be tomorrow, nobody does & playing 'market timing' does not work as it's just a guess. Over time equities have always out performed other assets, the stocks Fundsmith buys are lower risk than the market as an average & have produced better compound returns over a very long period. The average company was founded in 1908 so has survived plenty of turmoil.
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Regarding the "too late" line of thinking. I lost more money due to that thinking than for any other reason. e.g. ARM at 300 was already pricey and maybe gains already priced in. FB at 30 looks steep. bitcoin at 30 seems a bit much. etc.
Selling too early, or ever selling is probably my biggest mistake, Fundsmith does not intend to 'trade', just buy & hold.
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  #45  
Old 11.01.2016, 16:40
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Re: Very long term investment for dummies

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I still buy stocks I pick myself, but I also bought fundsmith because:

1. Like every other investor, I think I'm brilliant and so what I buy will increase in value spectacularly
2. That said, I could be wrong and so fundsmith has someone else who picks stocks for a living and hopefully is good at it
3. Having someone else do it means you can push money in and forget about it

Regarding the "too late" line of thinking. I lost more money due to that thinking than for any other reason. e.g. ARM at 300 was already pricey and maybe gains already priced in. FB at 30 looks steep. bitcoin at 30 seems a bit much. etc.

Yeah, that's why I'm still hoarding cash.
I just can't make up my mind - and when I do, it's usually wrong.
When I was a kid, everything was on the savings account - and when you had enough money there, you bought a savings certificate (at 4-8% interest...) Sigh.

Nowadays, you can get car-loans at 5% interest...

A legal, risk-free way to earn 8% interest just doesn't exist anymore.
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  #46  
Old 11.01.2016, 16:41
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Re: Very long term investment for dummies

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Hi All

I have read a lot of threads here on investment and learned (I guess) a lot. However, I still have a few unanswered topics. So here it is.

The scenario (which I believe many might share) is.

EU citizens and Swiss residents in our mid thirties we have a relatively good income allowing us to put aside somewhere around 40-50K chf p.a. So what would you do as very long term (20 to 30 years until retirement) to have this money grow with minimum risk. The goal is to have capital growth and NOT income.

As it has been suggested: We already bought an apartment (well the 20%). Even though it is to live in and not for investment, I think one apartment is enough exposure to Swiss real estate risk.


The 40-50K p.a. would be spread:
  • 13K in pillar 3a
  • 15K in shares of a large Swiss company (doing so as I can purchase these at a very good discount from my employer)
  • 10-20k in various accumulating ETFs

So this is my list of questions, topics to trigger discussion:
  1. Are ETFs the best means for low-risk, long term (10 to 30 years) investment?
  2. Swiss broker (swissquote/ postfinance) vs. US online brokerage - if so which one for a beginner (IB, Swchab, Scottrade?)
    What happens if the broker goes broke? - Am I being paranoid?
  3. Tax implications - How to recover the withholding tax
  4. Which ETFs
  5. Diversification - US + WW index trackers + maybe emerging markets?
  6. Is now a good time for lump sum CHF investment into foreign currency (having CHF)
  7. How to exchange CHF to USD/EUR in an efficient way?
  8. Retirement exit strategy: slowly move to dividend ETFs vs. bonds?

Looking forward to an interesting discussion. Thanks in advance for your contribution(s).

Mike
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The 40-50K p.a. would be spread:
  • 13K in pillar 3a
  • 15K in shares of a large Swiss company (doing so as I can purchase these at a very good discount from my employer)
  • 10-20k in various accumulating ETFs
Who told that this is a good portfolio strategy for long-term investment? Why would you put almost a 1/3 of your portfolio on shares of a single company? I strongly recommend that you read more since your allocation does not make sense.

If you want to invest PASSIVELY in the long term, you should have a portfolio that, if back-tested for the last 40 years, would give you the best compromise between return and risk.
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  #47  
Old 11.01.2016, 16:45
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Re: Very long term investment for dummies

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Who told that this is a good portfolio strategy for long-term investment? Why would you put almost a 1/3 of your portfolio on shares of a single company? I strongly recommend that you read more since your allocation does not make sense.
Well, I guess he works there.
If owning shares in the company doesn't make sense, why does working there?
;-)

Last edited by rainer_d; 11.01.2016 at 16:46. Reason: fixed quoting
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  #48  
Old 11.01.2016, 16:48
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Re: Very long term investment for dummies

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Yeah, that's why I'm still hoarding cash.
I just can't make up my mind - and when I do, it's usually wrong.
When I was a kid, everything was on the savings account - and when you had enough money there, you bought a savings certificate (at 4-8% interest...) Sigh.

Nowadays, you can get car-loans at 5% interest...

A legal, risk-free way to earn 8% interest just doesn't exist anymore.
if you'd put 50k into each of the 3 I'd mentioned there, you'd have 1 million back on your money.

if you'd put 100k into this basket of 4 companies, you'd have got about 700k back: Stock investment poll

imo, you need some cash on hand for use and emergencies, but otherwise it is just dead money.
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  #49  
Old 11.01.2016, 16:49
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Re: Very long term investment for dummies

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Who told that this is a good portfolio strategy for long-term investment? Why would you put almost a 1/3 of your portfolio on shares of a single company?
probably because you get some deal or tax breaks on it.
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  #50  
Old 11.01.2016, 16:54
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Re: Very long term investment for dummies

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The 40-50K p.a. would be spread:
  • 13K in pillar 3a
  • 15K in shares of a large Swiss company (doing so as I can purchase these at a very good discount from my employer)
  • 10-20k in various accumulating ETFs
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Who told that this is a good portfolio strategy for long-term investment? Why would you put almost a 1/3 of your portfolio on shares of a single company? I strongly recommend that you read more since your allocation does not make sense.
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Well, I guess he works there.
If owning shares in the company doesn't make sense, why does working there?
;-)
Indeed

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probably because you get some deal or tax breaks on it.
a 25% upfront top-up.

However, I might end up selling these after the mandatory holding period expires.
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  #51  
Old 11.01.2016, 17:32
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Re: Very long term investment for dummies

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Well, I guess he works there.
If owning shares in the company doesn't make sense, why does working there?
;-)
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probably because you get some deal or tax breaks on it.
Yes, I got that. But if the company goes bust he loses his job AND his money.

Buying shares from the company you work for has many advantages but you still need to assess the risk of it as any other investment.
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  #52  
Old 11.01.2016, 18:09
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Re: Very long term investment for dummies

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A legal, risk-free way to earn 8% interest just doesn't exist anymore.

There never was and there never will be.

There is no risk-free return, and if it is robust someone worked their asses off to mitigate the exposure of the portfolio, and they will need to -deservedly- get paid and get paid well.
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Old 11.01.2016, 18:13
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Re: Very long term investment for dummies

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Yes, I got that. But if the company goes bust he loses his job AND his money.

Buying shares from the company you work for has many advantages but you still need to assess the risk of it as any other investment.
Shares in any company can go bust.

If you refer to the theoretical risk that your employer goes bust and you also lose your job. Then for me, this is pointless. You can lose your job and a different company whose shares you own can go bust.

Actually, I would say slightly differently. Being on the inside, you have better early warning for when things can go wrong and can sell appropriately
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  #54  
Old 11.01.2016, 18:19
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Re: Very long term investment for dummies

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There never was and there never will be.
Thats not true, UK gilts & US treasury bonds for man years had a yield over 10%, US treasury bonds are considered the safest investment in the world.

I use to tell people to buy 2.5% Consolidated stock, people were frightened because it said 2.5% when the yield was over 8%. Those finally got redeemed last year at par

I guess your quite young & have not looked back very far.
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Shares in any company can go bust.

If you refer to the theoretical risk that your employer goes bust and you also lose your job. Then for me, this is pointless. You can lose your job and a different company whose shares you own can go bust.

Actually, I would say slightly differently. Being on the inside, you have better early warning for when things can go wrong and can sell appropriately
It's mare a matter of too much investment in a single sector by working & investing in that sector, even worse if that sector is Banking or Airlines that Terry Smith would say are un investable under any circumstances.
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  #55  
Old 11.01.2016, 19:39
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Re: Very long term investment for dummies

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There never was and there never will be.

There is no risk-free return, and if it is robust someone worked their asses off to mitigate the exposure of the portfolio, and they will need to -deservedly- get paid and get paid well.

Back when central banks had actual interest rates (and banks didn't just get basically as much money as they asked for from central banks), savings accounts paid good interest. I know I had a savings certificate that paid 8.something percent, tying up the money for five years or so.

Got my yearly Pensionskassen-sheet today. Date of retirement is listed as 31.08.2039.
That's another 23 years. And by that time, we've probably got to work 'til our mid-70s, if people continue to elect the same clowns of politicians into office over and over again...
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  #56  
Old 12.01.2016, 02:51
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Re: Very long term investment for dummies

OK, just one more question:
Fundsmith says, they require either of:

• Certified true copy of an official identification card or passport, or
• Certified true copy of a driver’s license, or
• Certified true copy of any equivalent legal identification document.

What's the easiest (cheapest) way of getting these documents?
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  #57  
Old 12.01.2016, 09:45
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Very long term investment for dummies

Take your passport to a notary's office and they'll do it for CHF 20, no appointment needed (www.notariate.zh.ch). The Handelsregisteramt will also notarise things for CHF 10 but I've only ever done it there for company registration matters
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Old 12.01.2016, 10:58
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Re: Very long term investment for dummies

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OK, just one more question:
Fundsmith says, they require either of:

• Certified true copy of an official identification card or passport, or
• Certified true copy of a driver’s license, or
• Certified true copy of any equivalent legal identification document.

What's the easiest (cheapest) way of getting these documents?
i got a colleague to sign and date it (a lawyer).

that was free and i only had to walk to the office next door. so as cheap and easy as you can get :P
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  #59  
Old 12.01.2016, 11:04
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Re: Very long term investment for dummies

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OK, just one more question:
Fundsmith says, they require either of:

• Certified true copy of an official identification card or passport, or
• Certified true copy of a driver’s license, or
• Certified true copy of any equivalent legal identification document.

What's the easiest (cheapest) way of getting these documents?
I had to do similar when registering for Swissquote. You can do it at the local post office. However, foreign companies might not accept it. When First Direct required certified copies, we went to our local UBS branch, and they did it for us - for free.
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  #60  
Old 12.01.2016, 17:41
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Re: Very long term investment for dummies

RBS is advising its customers to sell everything other than bonds before an impending crash later this year. Ok, their track record isn't the best, though it's still food for thought.
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