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View Poll Results: What to invest in?
Pension, every time - save for the future 1 5.88%
Banks - give it to the bank and pay off your mortgage 1 5.88%
Invest in stocks and shares - 'cos gambling is best 13 76.47%
70k? That's pocket change to me 2 11.76%
Voters: 17. You may not vote on this poll

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  #1  
Old 06.02.2020, 11:32
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Investing cash... opinions please...

Although a broad title, I have a specific question.

I have cashed in some shares - 70k CHF.

I want to use it, but am not sure in what and would appreciate perspectives from many of you here who, doubtless, have opinions to share...

1) Put it in the pension pot. I have a gap in my pension, and this wouldn't make a huge difference, but it would help. I am, however, 46 in a couple of weeks, and conventional wisdom (that I have read) says after 45, you should invest in short-term assets

2) Pay off the Swiss Mortgage. I still have a long way to go, and the money would help put a dent in the bank's ownership of my house

What perspectives and opinions can you share based on your own experience? Any internet pages you can recommend to help me educate myself on investment topics like this?

And yes, I will prob seek some professional input, but being a complete novice, I wouldn't know if what the professional was telling me was bullshit or not.

For shits and giggles, I've added poll.

And no, I would send it to you so you can invest it on my behalf...
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Old 06.02.2020, 11:36
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Re: Investing cash... opinions please...

drugs and hookers, then waste the rest
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Old 06.02.2020, 11:50
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Re: Investing cash... opinions please...

Throw a party for EFers who give you great advice!
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Old 06.02.2020, 11:50
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Re: Investing cash... opinions please...

Id invest in stock/funds. Pension pot looks nice but the return is not good.


Some people here would recommend Fundsmith
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Old 06.02.2020, 11:51
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Re: Investing cash... opinions please...

hard to say without knowing your financial profile e.g. how much income, vs existing cash savings, vs existing stock investments etc.

personally, i'd invest in the stock market and keep a cash reserve.
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Old 06.02.2020, 12:25
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Re: Investing cash... opinions please...

In my humble opinion i would a, use a part to pay off some of the mortgage, b, invest in low cost Indexfunds(ETFs).
ETFs are easier to deal with and you also automatically get a diversification when you buy an ETF, which is harder if you want to invest in separate stocks as a beginner.
The money that goes to the ETFs, should be money you won't see in 10-20 years. Let them grow passively there. But just make sure you do as much research as possible before you choose the ETF. Good luck.
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Old 06.02.2020, 12:31
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Re: Investing cash... opinions please...

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In my humble opinion i would a, use a part to pay off some of the mortgage, b, invest in low cost Indexfunds(ETFs).
ETFs are easier to deal with and you also automatically get a diversification when you buy an ETF, which is harder if you want to invest in separate stocks as a beginner.
The money that goes to the ETFs, should be money you won't see in 10-20 years. Let them grow passively there. But just make sure you do as much research as possible before you choose the ETF. Good luck.
Not aiming to hijack the question, but may I ask please, if you know in what category funds such as this of PostFinance one fall: https://www.swissfunddata.ch/sfdpub/en/funds/show/11520

Are these ETFs? Indexed Funds? What is the difference? And are they recommendable as medium/low risk?
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Old 06.02.2020, 12:47
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Re: Investing cash... opinions please...

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In my humble opinion i would a, use a part to pay off some of the mortgage, b, invest in low cost Indexfunds(ETFs).
ETFs are easier to deal with and you also automatically get a diversification when you buy an ETF, which is harder if you want to invest in separate stocks as a beginner.
The money that goes to the ETFs, should be money you won't see in 10-20 years. Let them grow passively there. But just make sure you do as much research as possible before you choose the ETF. Good luck.

Why pay off the mortgage ?


1) Money is cheap right now, you can get a mortgage for well under 1% right now, even fixed for a fairly long period of time


2) It makes no sense to pay off the mortgage under current Swiss tax laws.


How accesible do you need the funds, or how long are you ready to block the funds and wshat is your risk appetite ? Unless it is large, then i suggest you pick a couple of stocks like Nestle, a pharma company and something else and invest here.


Sure you won't see big massive returnds but their is very high chance you will see 100% of your capital back when you cash in.


Just look at the bubble stock of Tesla right now.....if you want high risk, that is !
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Old 06.02.2020, 12:53
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Re: Investing cash... opinions please...

No, that's a managed fund. I would recommend staying away from those since they are higher in cost(TER) and has historically been outperformed by ETFs.
ETF = A broad market Indexfund. 1 ETF contains a larget set of different funds in a market. Which market and how many different stocks it has differs from ETF to ETF.
ETFs does not have a manager with a fat paycheck behind them, like a managed fund has.
ETFs has a risk to them as well, just like all the rest of the possible funds, stocks or bonds. But if you compare a stock and a ETF. A stock is just for 1 single company, whilst a ETF contains investments in let's say 200 different companies(this also differs). So you spread out the risk = Diversify.

An example of a good ETF is the following:
https://www.justetf.com/en/etf-profi...n=IE00B3XXRP09

It is domiciled in Ireland, but the the ETF is diversified in US based stocks.

Read more here to learn more:
https://www.justetf.com/ch-en/how-to...itzerland.html
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Old 06.02.2020, 12:53
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Re: Investing cash... opinions please...

I would go for a mix of ETFs and hand-picked stocks.

For example

30K in ETFs (split between Europe, Americas, Emerging according to your risk levels)
20K managed funds according to your risk and comfort level (but do your research thoroughly before investing), personally I have money with AVADIS and am pleased overall.
10K hand picked stocks
10K reserve held in cash
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Old 06.02.2020, 12:56
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Re: Investing cash... opinions please...

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Id invest in stock/funds. Pension pot looks nice but the return is not good.
In theory this sounds great, in reality it very rarely works. It is not about the math, its about human behavior and most people do not have the discipline to actually carry it out over even a 10 year period. Between churning the portfolio, perceived emergencies and taking money out to save money somewhere else with the intention of putting it back later, people will be lucky to end up with the same money they started out. That has been my experience after spending nearly 30 years doing performance and attribution on portfolios of Swiss customers at a few banks over the years.

Id only recommend such an option to someone whos mentality I knew very well. Otherwise the OP is more likely to do better sticking it in the pension or the mortgage.
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Old 06.02.2020, 13:00
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Re: Investing cash... opinions please...

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In theory this sounds great, in reality it very rarely works. It is not about the math, it’s about human behavior and most people do not have the discipline to actually carry it out over even a 10 year period. Between churning the portfolio, perceived emergencies and taking money out to save money somewhere else with the intention of putting it back later, people will be lucky to end up with the same money they started out. That has been my experience after spending nearly 30 years doing performance and attribution on portfolios of Swiss customers at a few banks over the years.

I’d only recommend such an option to someone who’s mentality I knew very well. Otherwise the OP is more likely to do better sticking it in the pension or the mortgage.
I am definitely guilty of borrwoing money, sometimes even bigger sums, from my savings and investments. I think to some degree that is the nice thing about having them so accessible. Sometimes I got lucky and was able to buy them back later for 30 % less than I had sold them for. Overall I came out ahead compared to a more conservative savings scheme.
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Old 06.02.2020, 13:07
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Re: Investing cash... opinions please...

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In theory this sounds great, in reality it very rarely works. It is not about the math, its about human behavior and most people do not have the discipline to actually carry it out over even a 10 year period. Between churning the portfolio, perceived emergencies and taking money out to save money somewhere else with the intention of putting it back later, people will be lucky to end up with the same money they started out. That has been my experience after spending nearly 30 years doing performance and attribution on portfolios of Swiss customers at a few banks over the years.
However, if you have the discipline to save and invest regularly and over time, you can begin to build substantial wealth as you snowball grows.

I must admit, I am surprised about your comments about the behavior of your Swiss clients. I would have thought that the Swiss, more than other client groups, would have been pretty disciplined about saving and investing over the long-term.
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Old 06.02.2020, 13:18
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Re: Investing cash... opinions please...

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However, if you have the discipline to save and invest regularly and over time, you can begin to build substantial wealth as you snowball grows.

I must admit, I am surprised about your comments about the behavior of your Swiss clients. I would have thought that the Swiss, more than other client groups, would have been pretty disciplined about saving and investing over the long-term.
I can imagine that many Swiss, especially the older generations, are risk averse financially, and sometimes equate discipline with not taking risks.

I know quite a few Swiss who are under 40 or so who are into stocks, but all the older ones wouldn't touch them with a bargepole. Or if they do, just Swiss ones and only big corporations (UBS, Nestle etc).

Those who are attracted by the risk nevertheless are often the ones who don't have that discipline. Maybe people who got an unexpected promotion mid way through their career and don't really have a habit of dealing with money.
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Old 06.02.2020, 13:43
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Re: Investing cash... opinions please...

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In theory this sounds great, in reality it very rarely works. It is not about the math, its about human behavior and most people do not have the discipline to actually carry it out over even a 10 year period. Between churning the portfolio, perceived emergencies and taking money out to save money somewhere else with the intention of putting it back later, people will be lucky to end up with the same money they started out. That has been my experience after spending nearly 30 years doing performance and attribution on portfolios of Swiss customers at a few banks over the years.

Id only recommend such an option to someone whos mentality I knew very well. Otherwise the OP is more likely to do better sticking it in the pension or the mortgage.
OP does your pension scheme have the new 1e component, where you take the investment risk, but are able to choose your risk profile? My scheme allows a fund with 70% equities and with a low TER for a managed fund.

Although you might not get the quite the same returns as eg Fundsmith has produced historically (past performance is no indicator of future), it keeps you from dipping into it, you should get a better return over the long run compared to the main pension fund and you get the tax benefits up front. I think you can also pull it out after 5 years to pay down the mortgage if thats what you want to do.
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Old 06.02.2020, 14:00
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Re: Investing cash... opinions please...

Some of the assets that have appreciated the fastest over the past low interest years:
- "investment grade" classic cars
- vintage guitars

Just saying certainly more fun than an S&P ETF during an upcoming US election and entering at a very high point.
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Old 06.02.2020, 14:08
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Re: Investing cash... opinions please...

Get a property in selected location outside of CH and rent it out!
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Old 06.02.2020, 14:10
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Re: Investing cash... opinions please...

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However, if you have the discipline to save and invest regularly and over time, you can begin to build substantial wealth as you snowball grows.

This
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Old 06.02.2020, 18:17
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Re: Investing cash... opinions please...

Before you decide on anything, answer 2 questions to yourself:
1. What is your time horizon (that you will not need that money)?
2. How risk tolerant are you?

Best returns (in the longer term, NOT 5 years or less) you can expect from stocks, no question.
For a shotgun approach just get a broad world market index/ETF (like Vanguard's VT), throw in regularly, and forget about it.

One can say "now is a bit of an all-time high" - it is most of the time.
If you trust that markets are efficient, you don't care about short-term performance (highs/lows).

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Last edited by dbucar; 06.02.2020 at 18:37.
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Old 06.02.2020, 18:21
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Re: Investing cash... opinions please...

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Although a broad title, I have a specific question.

I have cashed in some shares - 70k CHF.

I want to use it, but am not sure in what and would appreciate perspectives from many of you here who, doubtless, have opinions to share...

1) Put it in the pension pot. I have a gap in my pension, and this wouldn't make a huge difference, but it would help. I am, however, 46 in a couple of weeks, and conventional wisdom (that I have read) says after 45, you should invest in short-term assets

2) Pay off the Swiss Mortgage. I still have a long way to go, and the money would help put a dent in the bank's ownership of my house

What perspectives and opinions can you share based on your own experience? Any internet pages you can recommend to help me educate myself on investment topics like this?

And yes, I will prob seek some professional input, but being a complete novice, I wouldn't know if what the professional was telling me was bullshit or not.

For shits and giggles, I've added poll.

And no, I would send it to you so you can invest it on my behalf...
Open an Interactive Brokers account. Lots of investments opportunities in the markets and you can access them at very low costs there.
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