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-   -   ETF robo-advisors: True Wealth? (https://www.englishforum.ch/finance-banking-taxation/271772-etf-robo-advisors-true-wealth.html)

sunthings 02.07.2017 12:26

ETF robo-advisors: True Wealth?
 
I'm new to investing and am a complete dummy in the investment world. I own my flat and holiday home (in Switzerland), both with mortgages that I'm told it's better not to pay down as retirement is not so many years away. Now I finally have some cash currently earning nothing in my savings account. I don't plan on leaving Switzerland, so am looking to keep things in CHF. I get ads from a company called True Wealth and am considering them. Any experience with them? Alternatives (not requiring investment knowledge)?

meloncollie 02.07.2017 13:07

Re: ETF robo-advisors: True Wealth?
 
Quote:

Originally Posted by sunthings (Post 2810945)
I own my flat and holiday home (in Switzerland), both with mortgages that I'm told it's better not to pay down as retirement is not so many years away.

Just a comment about the above:

Before you go farther, perhaps check that your retirement income will still qualify you for your current mortgage.

From conversations here on EF and IRL many, perhaps most, seem to have no problem continuing with their mortgages despite reduced income. But a few folks have had to top-up their deposits to get the borrowed amount down to what their post-retirement income allows.

I can't see much rhyme or reason, as I know two couples with the same bank, one had to top up, the other not a peep from the bank.

You likely would not be affected, but perhaps keep this in the back of your mind as you determine what to do with the cash.

Now over to the investment savvy folks...

sunthings 02.07.2017 14:12

Re: ETF robo-advisors: True Wealth?
 
Thanks, Melloncollie (I love the name!),

I already checked with the bank regarding my mortgages in my retirement years. Since the holiday home generates income through holiday rentals, plus I rent out a room in my regular home, they said I shouldn't have to be concerned. Also, I understand banks don't actually want their clients to pay back mortgages!!

rainer_d 02.07.2017 14:18

Re: ETF robo-advisors: True Wealth?
 
TrueWealth is from one of the Digitec founders.

[edited]

As now even Postfiance has setup a fund-based Pillar 3 product and ETFs are basically on page 3 of 20min once a week, I believe the popping of the bubble can't be too far away ;-)

That, and the surge in "alternative currencies" like BitCoin and Ether.

ivank 02.07.2017 14:56

Re: ETF robo-advisors: True Wealth?
 
Quote:

I own my flat and holiday home (in Switzerland), both with mortgages
I hope the holiday home is at least rented out and brings some nice income? Otherwise it's just unthinkable luxury, at least to me, at the price level in switzerland.

How are you going to pay for them if rates skyrocket (they're already trending up), house prices accordingly drop, and your bank makes a margin call or refuses to refinance your mortgage after retirement because your yearly income drops?

Quote:

Now I finally have some cash currently earning nothing in my savings account.
It's cash that it seems you can't afford to lose given your mortgage situation, so I wouldn't put it into stocks.

Quote:

I get ads from a company called True Wealth and am considering them. Any experience with them?
Not impressed, so I've signed up for a virtual demo account with them, asked specifically for high risk allocation and they still managed to lose almost 1% YTD in it, before their fees. Vanguard Total World on the other hand is up 5-6% YTD in CHF terms and comes with only 0.11% expense ratio, not 0.50% + third party charges that truewealth charges.

Their default portfolio heavily overweights Switzerland and uses SMI index for Swiss stocks, which is practically mostly about just 3 companies with only a tiny percentage of revenues from Switzerland - not a bright idea at all IMHO.

Quote:

not requiring investment knowledge)?
Well, you better get some, start reading. Without knowledge, people have been known to lose money even in highly profitable funds.

"Peter Lynch. As manager of the Fidelity Magellan fund, he generated average annual returns of 29% per year over his 14-year tenure. The average investor in the fund, however, managed to lose money -- selling the fund at its lows and buying high."

ivank 02.07.2017 15:24

Re: ETF robo-advisors: True Wealth?
 
If retirement is not so far away, then depending on how heavily you're taxed, you might be better off putting the money in pillar 2 or 3a. They don't pay much interest either, but tax difference might make it still worthwhile, do the calculation before deciding though. And banks are happy to consider it as additional collateral for mortgages, at least for self-inhabited house.

sunthings 02.07.2017 15:44

Re: ETF robo-advisors: True Wealth?
 
Quote:

Originally Posted by ivank (Post 2811000)
I hope the holiday home is at least rented out and brings some nice income? Otherwise it's just unthinkable luxury, at least to me, at the price level in switzerland.

How are you going to pay for them if rates skyrocket (they're already trending up), house prices accordingly drop, and your bank makes a margin call or refuses to refinance your mortgage after retirement because your yearly income drops?

Not impressed, so I've signed up for a virtual demo account with them, asked specifically for high risk allocation and they still managed to lose almost 1% YTD in it, before their fees. Vanguard Total World on the other hand is up 5-6% YTD in CHF terms and comes with only 0.11% expense ratio, not 0.50% + third party charges that truewealth charges.

Their default portfolio heavily overweights Switzerland and uses SMI index for Swiss stocks, which is practically mostly about just 3 companies with only a tiny percentage of revenues from Switzerland - not a bright idea at all IMHO.

Well, you better get some, start reading. Without knowledge, people have been known to lose money even in highly profitable funds.

"Peter Lynch. As manager of the Fidelity Magellan fund, he generated average annual returns of 29% per year over his 14-year tenure. The average investor in the fund, however, managed to lose money -- selling the fund at its lows and buying high."


The holiday home does very well in rentals, bringing in 20K+ CHF a year while allowing me to use it a few weeks during high season plus lots of weekends here and there. It also has emotional value, having been in the family for almost 50 years. The plan is to sell my regular flat if keeping both isn't sustainable.

I've been reading, mostly to understand investment vocabulary. Gaining strategy insight feels a bit tricky.

I'm thinking low to mid risk investments - I would find a net 2% gain great. Possibly True Wealth performs better at the low end than the high? I'll try their virtual investment tool and will also look into Vanguard.

sunthings 02.07.2017 15:46

Re: ETF robo-advisors: True Wealth?
 
Quote:

Originally Posted by ivank (Post 2811026)
If retirement is not so far away, then depending on how heavily you're taxed, you might be better off putting the money in pillar 2 or 3a. They don't pay much interest either, but tax difference might make it still worthwhile, do the calculation before deciding though. And banks are happy to consider it as additional collateral for mortgages, at least for self-inhabited house.

Third pillar contributions are already at the yearly maximum.

ivank 02.07.2017 16:18

Re: ETF robo-advisors: True Wealth?
 
Quote:

Originally Posted by sunthings (Post 2811043)
I'm thinking low to mid risk investments - I would find a net 2% gain great

Rental properties, bought at a reasonable price and conservatively financed, should easily deliver 2% with low risk. If you intend and can hold them for a long time.

sunthings 15.07.2017 11:49

Re: ETF robo-advisors: True Wealth?
 
I've discovered the Mustachian Post http://www.mustachianpost.com/2016/1...wiss-investor/

Keeping finances in CHF, I'm settling on CornerTrader. Seems that there are a lot of lukewarm feelings about TrueWealth.

geneve78 13.08.2019 12:39

Re: ETF robo-advisors: True Wealth?
 
For me Truewealth works pretty good. Happy with them so far. I would advise putting in a monthly amount. All the cash is protected up to 100k and the positions in ETFs are under your name. So if the place goes down you still own the positions.

Phil_MCR 13.08.2019 12:58

Re: ETF robo-advisors: True Wealth?
 
what's the interest rate on the properties? if you're looking for 2%, you may get somewhere close to that just paying off the mortgages.

i would not like to have debt in retirement.

also fees for robo advisers are too high

sunthings 18.08.2019 09:44

Re: ETF robo-advisors: True Wealth?
 
The holiday home mortgage interest rate is 1.05%.
If I pay down the mortgage, I consider the money to be "gone forever", in that it's unlikely I can "re-mortgage" if I need retirement money. As it is, the mortgage covers only 40% of the property value, so I already own a substantial portion.
I've paid the maximum amount into the third pillar for all of my 10 years in Switzerland.
Since writing the original post a couple of years ago, I've done absolutely nothing with my cash, except keep it in the bank at 0% interest. I'm trying to overcome an aversion to investment caused by a pretty bad experience. Now I'm ready to have another go at it.
I've bought a book put out by "Beobachter" called "Plötzlich Geld - so legen Sie richtig an" which seems to be fantastic at explaining investment basics in Switzerland. I'm in the low to middle risk category and a "small investor". I've determined my mix should be 20% cash, 40% stocks and 40% bonds and should limit to about 10 different stocks/bonds. Now it's time to choose what to buy.

robBob 18.08.2019 10:45

Re: ETF robo-advisors: True Wealth?
 
Investing here in CH comes along with hefty fees. :eek:
I myself am using td Ameritrade in the states.

As for getting a better deal then the banks that are all burdened with negative interest rates and are try hard to mask it with more fees, you may want to consider Oiko Credit:
https://de.oikocredit.ch/geldanlage-privatpersonen

On average one gets a 2% dividend.

Better then any Swiss bank and it nice to know that your money is used for a good purpose, helping others who really need it.

Andywarhol 09.09.2019 10:47

Re: ETF robo-advisors: True Wealth?
 
Quote:

Originally Posted by sunthings (Post 2810945)
I'm new to investing and am a complete dummy in the investment world. I own my flat and holiday home (in Switzerland), both with mortgages that I'm told it's better not to pay down as retirement is not so many years away. Now I finally have some cash currently earning nothing in my savings account. I don't plan on leaving Switzerland, so am looking to keep things in CHF. I get ads from a company called True Wealth and am considering them. Any experience with them? Alternatives (not requiring investment knowledge)?

There is an extensive True Wealth review here you might be interested in:
http://investinghero.ch/true-wealth-review-2019/

Phil_MCR 09.09.2019 11:15

Re: ETF robo-advisors: True Wealth?
 
Quote:

Originally Posted by sunthings (Post 3092279)
The holiday home mortgage interest rate is 1.05%.
If I pay down the mortgage, I consider the money to be "gone forever", in that it's unlikely I can "re-mortgage" if I need retirement money. As it is, the mortgage covers only 40% of the property value, so I already own a substantial portion.
I've paid the maximum amount into the third pillar for all of my 10 years in Switzerland.
Since writing the original post a couple of years ago, I've done absolutely nothing with my cash, except keep it in the bank at 0% interest. I'm trying to overcome an aversion to investment caused by a pretty bad experience. Now I'm ready to have another go at it.
I've bought a book put out by "Beobachter" called "Plötzlich Geld - so legen Sie richtig an" which seems to be fantastic at explaining investment basics in Switzerland. I'm in the low to middle risk category and a "small investor". I've determined my mix should be 20% cash, 40% stocks and 40% bonds and should limit to about 10 different stocks/bonds. Now it's time to choose what to buy.

if you've been so scared that you have done nothing with cash, i'd say you are a low risk investor and wonder if you should have even as much as 40% stocks.

personally, if i were in your position, i'd keep part as cash, sell the holiday home and use the funds and rest to pay off the mortgage.


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