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Old 13.06.2017, 14:36
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Bank with option to trade stocks?

Hello!


Do you guys know any Swiss bank that also has the option to buy/sell stocks? Also with the option to buy stocks on funds? (the one I was using didnt have that option)

The reason behind this is that I saw a lot of reviews from online brokers that at the moment of paying / withrowing cash to your bank account they "never send it" or things like that...




Thanks in advance!
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Old 13.06.2017, 14:44
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Re: Bank with option to trade stocks?

postfinance, if you dont do lots of trades - they have pretty low costs (for CH)
If you do many trades - you can find better places (but as you are asking for advice - I dont think that you are doing many trades ;-)
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Old 13.06.2017, 14:48
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Re: Bank with option to trade stocks?

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postfinance, if you dont do lots of trades - they have pretty low costs (for CH)
If you do many trades - you can find better places (but as you are asking for advice - I dont think that you are doing many trades ;-)
Thanks Golfer!

Yeah, Im planning to buy stocks on companies that pay good dividends, and do compounding / reinvest those dividends in more stocks... more of a long term thing

For buying and selling I could try the online ones with a few bucks and see how are these
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Old 13.06.2017, 16:46
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Re: Bank with option to trade stocks?

Try www.swissquote.ch
They have a physical presence also.
They used to have club off Bahnhof strasse a few years ago which I never went to. I have had an account for 14 years and can use it like a bank also for some transactions.
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Old 13.06.2017, 17:33
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Re: Bank with option to trade stocks?

All swiss banks and brokers will charge you an arm and a leg to trade. Cornertrader is on the cheaper side if you really really want a swiss one. If you want a safer one, go for your local government-owned cantonal bank and open wide your wallet. All should be able to trade anything tradeable on major exchanges.

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The reason behind this is that I saw a lot of reviews from online brokers that at the moment of paying / withrowing cash to your bank account they "never send it" or things like that...
Binary options and CFD sorts of brokers? Those have a lot more to do with gambling than investing. They expect you to lose the money with tons of leverage or unfair payout structure than walk out with the money.

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Yeah, Im planning to buy stocks on companies that pay good dividends, and do compounding / reinvest those dividends in more stocks...
Good dividends can easily be little more than a concealed return of capital

It's usually better to buy stocks in companies that can do compounding internally for you. Strictly from accounting pov, for a $1 of dividends, you'd pay maybe a third of it taxes, and then at current average 2-3 P/B it would buy you only $0.20-0.30 of equity in an average company on the market. A 3-5x loss compared to internal reinvesting. Of course, not all companies are able to efficiently reinvest and grow, and those that are good at it usually will be far from cheap
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Old 13.06.2017, 20:04
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Re: Bank with option to trade stocks?

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All swiss banks and brokers will charge you an arm and a leg to trade. Cornertrader is on the cheaper side if you really really want a swiss one. If you want a safer one, go for your local government-owned cantonal bank and open wide your wallet. All should be able to trade anything tradeable on major exchanges.


Binary options and CFD sorts of brokers? Those have a lot more to do with gambling than investing. They expect you to lose the money with tons of leverage or unfair payout structure than walk out with the money.


Good dividends can easily be little more than a concealed return of capital

It's usually better to buy stocks in companies that can do compounding internally for you. Strictly from accounting pov, for a $1 of dividends, you'd pay maybe a third of it taxes, and then at current average 2-3 P/B it would buy you only $0.20-0.30 of equity in an average company on the market. A 3-5x loss compared to internal reinvesting. Of course, not all companies are able to efficiently reinvest and grow, and those that are good at it usually will be far from cheap
Thanks Ivank, great answers as usual!

Yup, thats the problem... I used to have stocks on a company that was paying dividends with stocks, this was amazing! I think the company was called Oxford Lane.

Most of them they just want to pay cash dividends, for which you will end up with pennies, as you said, unless you have a LOT of stocks from that company, which becomes dangerous if the company goes downhill. Best as they say, is to have stocks from different companies...

Still, I dont know if it would be as bad as in here, that for a $100 dividend income, I was ending up getting around $35 out of that.
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Old 13.06.2017, 20:04
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Re: Bank with option to trade stocks?

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Try www.swissquote.ch
They have a physical presence also.
They used to have club off Bahnhof strasse a few years ago which I never went to. I have had an account for 14 years and can use it like a bank also for some transactions.
Gonna take a look

Thanks JBrady!
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Old 13.06.2017, 20:57
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Re: Bank with option to trade stocks?

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Yup, thats the problem... I used to have stocks on a company that was paying dividends with stocks, this was amazing!
Stock dividend instead of cash isn't necessarily good. If everyone takes it or there's no choice to take cash, it's bad: it's basically like a stock split, you still own exactly same portion of the company as before, nothing changes. Otherwise only if shares are fair or overvalued then it's probably in your favor to take stock, you'll be enriched by cash takers who prevent dilution of ownership in the company and savings on taxes. It can be a good or bad sign that the company is in need of more cash, good if it can efficiently reinvest it into growth (but then it should maybe just pay less dividend), bad if it needs it to maintain existing business. And if stock is undervalued, the company should rather be doing buybacks instead, stock dividend would only benefit exiting shareholders

What i was rather talking are companies who retain good part of the earnings and reinvest them internally into expanding their business, without paying out as dividends - "compounders", those are amazing. Buffett buying KO in 80's is a classic example.

Last edited by ivank; 13.06.2017 at 22:06.
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Old 13.06.2017, 21:31
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Re: Bank with option to trade stocks?

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Hello!


Do you guys know any Swiss bank that also has the option to buy/sell stocks? Also with the option to buy stocks on funds? (the one I was using didnt have that option)
Firstly, if you (still) have a stock trading account in another country, you're probably better off using that as Swiss fees are relatively high.

I also use Swissquote, as suggested by another poster. Still not cheap compared with a UK or US dealer, but much cheaper than the banks, and with a wide range of investment options. I trade only rarely, but I won't do so through my bank on principle.

One of my few disappointments with Switzerland is the primitive attitude to investment, which I expected to be highly advantageous here. Not just the limited platforms available, but the lack of schemes like the UK's ISA (tax-free for up to £15,000 per year) and SIPP (retirement investing, where the government adds around 40% to each deposit made i.e. it refunds the income tax you've already paid on it). Here in Switzerland, there is nothing like this beyond the paltry 6,000 CHFs a year in your Pillar 3, and even then you're restricted by what you can invest in.
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Old 14.06.2017, 01:53
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Re: Bank with option to trade stocks?

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One of my few disappointments with Switzerland is the primitive attitude to investment, which I expected to be highly advantageous here. Not just the limited platforms available, but the lack of schemes like the UK's ISA (tax-free for up to £15,000 per year) and SIPP (retirement investing, where the government adds around 40% to each deposit made i.e. it refunds the income tax you've already paid on it). Here in Switzerland, there is nothing like this beyond the paltry 6,000 CHFs a year in your Pillar 3, and even then you're restricted by what you can invest in.
Too right.....the pillar 3 is a total scam. I have to pay in for my mortgage amortization (assuming I dont do a repayment mortgage), so I use a 3a fund. The 'most risky' fund has made me about 2% in 2yrs, my other equity fund-based investments have made up to 50%. So the tax benefit is really not worth it IMO when you have such crap performance.
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Old 14.06.2017, 12:27
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Re: Bank with option to trade stocks?

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Yup, thats the problem... I used to have stocks on a company that was paying dividends with stocks, this was amazing! I think the company was called Oxford Lane.
Dividend payment in newly issued shares is nothing but a smokescreen, in effect you get paid out zero, zilch, nada. If you get to chose betwenn cash and stock, those taking cash even profit off those chosing stock.

Say the company has 100 shares outstanding, each with a market price of $50. So the company's total market price is $5k.

Today the company pays dividends in the form of 1 share for every 20 shares held, making it an apparen 5% dividend. For simplicity's sake let's assume every shareholder holds 20 shares, so each has $1k invested before the dividend is paid. 5 shares get issued as dividend for a total of 105 outstanding after the payout.

Now, after dividend payout the company still has $5k value, therefore each of the now 105 shares outstanding has a new price of $5k/105 or $47.62 each. Each shareholder has now 21 shares which together are worth 21*47.62 = $1000.

As you can see, each shareholder's position still has $1k market price. Despite the apparent dividend payout there's zero net change in each's position. If however the 5% dividend had been paid out in cash, the company's market price would have dropped $250 to $4750.

Now let's assume shareholders get to chose between cash and stock (e.g. Credit Suisse in recent years). Still using the example above, let's assume four shareholders chose stock, one takes cash. The cash payout reduces company value to $4950, four additional shares get issued for 104 shares worth $47.6 each in total now outstanding.
i) the one shareholder who took cash has now 20 shares wort $47.6 each and $50 cash for $1002 total
ii) the four shareholders who chose stock now each have 21 shares worth $47.6 for $999.6 total

You probably would expect everybody to still have $1k. But they don't, the one who took cash has taken advantage of the others.

You may want to re-think about stock dividends

Last edited by Urs Max; 14.06.2017 at 12:45.
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Old 14.06.2017, 12:47
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Re: Bank with option to trade stocks?

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One of my few disappointments with Switzerland is the primitive attitude to investment, which I expected to be highly advantageous here. Not just the limited platforms available, but the lack of schemes like the UK's ISA (tax-free for up to £15,000 per year) and SIPP (retirement investing, where the government adds around 40% to each deposit made i.e. it refunds the income tax you've already paid on it). Here in Switzerland, there is nothing like this beyond the paltry 6,000 CHFs a year in your Pillar 3, and even then you're restricted by what you can invest in.
There's no reason to subsidize the well-off even more than is already done.
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Old 14.06.2017, 12:54
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Re: Bank with option to trade stocks?

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Too right.....the pillar 3 is a total scam. I have to pay in for my mortgage amortization
For indirect amortization it's not bad. You get to save taxes and 2% it generates is better than mortgage interest
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Old 14.06.2017, 12:58
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Re: Bank with option to trade stocks?

There is a good article on this from Terry, explaining how retained earnings lead to capital gains exceeding by far what can be achieved by reinvesting dividends (if the company uses the retained earnings smartly).

But genrally ivank's calculation is correct, on every 1 unit of dividend reinvested you get about 1/5th to 1/3 as compared to the capital gaines of retained earnings. 1/3 gone to taxes on dividends and 1/3 due to the price per book value of 1-3 of an average s&p500 company.

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All swiss banks and brokers will charge you an arm and a leg to trade. Cornertrader is on the cheaper side if you really really want a swiss one. If you want a safer one, go for your local government-owned cantonal bank and open wide your wallet. All should be able to trade anything tradeable on major exchanges.


Binary options and CFD sorts of brokers? Those have a lot more to do with gambling than investing. They expect you to lose the money with tons of leverage or unfair payout structure than walk out with the money.


Good dividends can easily be little more than a concealed return of capital

It's usually better to buy stocks in companies that can do compounding internally for you. Strictly from accounting pov, for a $1 of dividends, you'd pay maybe a third of it taxes, and then at current average 2-3 P/B it would buy you only $0.20-0.30 of equity in an average company on the market. A 3-5x loss compared to internal reinvesting. Of course, not all companies are able to efficiently reinvest and grow, and those that are good at it usually will be far from cheap
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Thanks Ivank, great answers as usual!

Yup, thats the problem... I used to have stocks on a company that was paying dividends with stocks, this was amazing! I think the company was called Oxford Lane.

Most of them they just want to pay cash dividends, for which you will end up with pennies, as you said, unless you have a LOT of stocks from that company, which becomes dangerous if the company goes downhill. Best as they say, is to have stocks from different companies...

Still, I dont know if it would be as bad as in here, that for a $100 dividend income, I was ending up getting around $35 out of that.
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Old 14.06.2017, 15:42
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Re: Bank with option to trade stocks?

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Try www.swissquote.ch
They have a physical presence also.
They used to have club off Bahnhof strasse a few years ago which I never went to. I have had an account for 14 years and can use it like a bank also for some transactions.
How more expensive is Swiss Quote? I was considering opening an account there because they seem be a good choice if you want a single place to do all your stuff (bank account, investments, international wire, etc.).
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Old 14.06.2017, 16:13
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Re: Bank with option to trade stocks?

I only use it to buy and sell shares - save money for my tax - pay tax and the occasional international and swiss transfer. I found them more convenient and helpful and never felt the need to look elsewhere (but I am small fry)


Here is a link for their current charges
https://www.swissquote.ch/sqw-static...lients.jsp?l=e

Perhaps you can compare it to your plans.

I know you can get a credit card and use a lot more of the facilities than I use - but I use Swissquote in tandem with my Kantonal bank.
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Old 14.06.2017, 18:14
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Re: Bank with option to trade stocks?

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There's no reason to subsidize the well-off even more than is already done.
These are not subsidies for rich people but for the less we off. A SIPP is a pension fund which you can't access under the age of 55. An ISA is a savings scheme with a ceiling of £15k a year. Once you withdraw you lose your tax advantages so savers leave their pot intact until they really need it.

They are designed to encourage small investors, not the already wealthy.
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Old 15.06.2017, 03:03
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Re: Bank with option to trade stocks?

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How more expensive is Swiss Quote?
Expensive like everything swiss.

Beware of 0.075-0.15% swiss stamp duty. They usually don't mention it in the pricelist, but *any* swiss bank or broker is obliged to charge it, and it makes it really expensive to trade compared to non-swiss brokers. A transaction for $100k on a US exchange that might have cost you only a couple dollars with a good discount broker like IB or flat $4.95 with Schwab, would likely cost here several hundreds thanks to stamp duty alone, even before any broker fees. And you'll pay it twice: both when buying and selling.

Another thing to consider that they never tell you right in the face is currency conversion markup, which usually starts at 0.5-1%

Last edited by ivank; 15.06.2017 at 05:47.
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Old 15.06.2017, 09:22
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Re: Bank with option to trade stocks?

Jeez, instead of asking 100 questions, just go to this website, enter your expected account usage, put the period to 10 years, and then you will see what is the cheapest.

Spoiler: For buy and hold it will be Corner Trader, for frequent small transactions, it will be Swissquote, from the major banks the cheapest is PostFinance, but it's far from cheap.

https://www.moneyland.ch/en/online-trading-comparison

A side question: I have an account with Corner Trader. How safe are my securities there? I mean, what proof is there that I do own them, other than what they show me on their website? They don't send me any statements. What if someone broke in, made some malicious leveraged deal and lost it all within minutes?
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Old 15.06.2017, 10:56
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Re: Bank with option to trade stocks?

poping back up this topic :P

Also, does someone have stocks in funds that pay dividends every month? The compounding is much better the more often the companies pay dividends

http://www.dividend.com/dividend-sto...er=desc&page=1

But again, i dont know what would be the taxes on this, from "$100" bucks, with how much would you get after all fees and taxes
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