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  #221  
Old 08.01.2021, 15:51
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Re: Equity Portfolio Advice

slightly tangent but still relevant. I logged on to IB this morning and received this message

Brexit Notification
Interactive Brokers clients located in the European Economic Area (EEA) are required to migrate their account from Interactive Brokers (UK) Limited to one of our new European entities. If you are an EEA client, you can start the migration process by logging in to your account via the "Log In" button on our website.

Additional information regarding why EEA clients need to migrate their account can be found in our FAQs:

Interactive Brokers Central Europe Account Migration
Interactive Brokers Ireland Account Migration
Interactive Brokers Luxembourg Account Migration


Anybody else seeing this and have you migrated your account?
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  #222  
Old 08.01.2021, 15:57
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Re: Equity Portfolio Advice

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If you start your 3a at 58 you better not start at all.
3a is still your money, you can just invest it in a limited fashion, but most pension fintech companies now offer something for everyone (frankly, VIAC, finpension).

Every 6800 francs you put in gives you around 1000-1500 francs tax cut (kt ZH, base salary around 100k pa).

The BVG (2nd pillar) you collect are totally tax free (therefore around 20-24% win yearly in Kt ZH) and is a base social net for your wife and kids should anything bad happen to you, God forbid. Once you are ready to retire early, you can take the money to a Vested benefits account (Freizügigketskonto) when you're not in active employment anymore, can use it to buy (or cash out) property or can even cash it out for your own company if you were to create one.

I can see your thinking is a bit more millenial-ish than mine. But don't put all your eggs in one basket. Dumping all in SSON might or might not (have been) a good idea in 25 years' time.

FIRE and saving for one's pension is nothing close to instant gratification, it's a well planned marathon that you need to start early enough and think about your future wife and kids as well. Plus the inevitable market crashes in between.
BVG second pillar is not paid out TAX FREE, it's taxable at a preferable rate.

The more eggs in the basket the chance of substantial underperformance as there are only a few 'good companies' & very very few good fund managers.
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  #223  
Old 08.01.2021, 16:54
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Re: Equity Portfolio Advice

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slightly tangent but still relevant. I logged on to IB this morning and received this message

Brexit Notification
Interactive Brokers clients located in the European Economic Area (EEA) are required to migrate their account from Interactive Brokers (UK) Limited to one of our new European entities. If you are an EEA client, you can start the migration process by logging in to your account via the "Log In" button on our website.

Additional information regarding why EEA clients need to migrate their account can be found in our FAQs:

Interactive Brokers Central Europe Account Migration
Interactive Brokers Ireland Account Migration
Interactive Brokers Luxembourg Account Migration


Anybody else seeing this and have you migrated your account?
Switzerland isn't in the EEA
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  #224  
Old 08.01.2021, 16:59
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Re: Equity Portfolio Advice

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Switzerland isn't in the EEA
Yes of course, apologies I should've been more explicit. I was wondering if product offerings would be different or more interestingly would fees be better in say the LUX entity. Just read the FAQ and it looks like fees are the same globally
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  #225  
Old 08.01.2021, 17:03
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Re: Equity Portfolio Advice

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If you start your 3a at 58 you better not start at all.
3a is still your money, you can just invest it in a limited fashion, but most pension fintech companies now offer something for everyone (frankly, VIAC, finpension).

Every 6800 francs you put in gives you around 1000-1500 francs tax cut (kt ZH, base salary around 100k pa).

The BVG (2nd pillar) you collect are totally tax free (therefore around 20-24% win yearly in Kt ZH) and is a base social net for your wife and kids should anything bad happen to you, God forbid. Once you are ready to retire early, you can take the money to a Vested benefits account (Freizügigketskonto) when you're not in active employment anymore, can use it to buy (or cash out) property or can even cash it out for your own company if you were to create one.

I can see your thinking is a bit more millenial-ish than mine. But don't put all your eggs in one basket. Dumping all in SSON might or might not (have been) a good idea in 25 years' time.

FIRE and saving for one's pension is nothing close to instant gratification, it's a well planned marathon that you need to start early enough and think about your future wife and kids as well. Plus the inevitable market crashes in between.
I'm a similar age (32) to Polymath (34). I'm not sure that our distaste of pillar 3a (and utter loathing of pillar 2) is "millennial".

More that if we have 25-30 years till we can cash it out, the taxing saving is less important than someone who is closer to retirement vis-a-vis performance. So more influenced by our age per se, rather than our age effecting our mindset.

I actually am investing in pillar 3a. My logic is that I can use it to buy a house in the next few years so I am close to cashing it out. Yes, I know a house isn't a great investment here, but it does allow me to withdraw my pillar 2 funds which are doing nothing (and continue to withdraw them every 5 years), so I can invest that money properly.

Last edited by HickvonFrick; 08.01.2021 at 17:17.
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  #226  
Old 08.01.2021, 22:21
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Re: Equity Portfolio Advice

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If you start your 3a at 58 you better not start at all.
3a is still your money, you can just invest it in a limited fashion, but most pension fintech companies now offer something for everyone (frankly, VIAC, finpension).

Every 6800 francs you put in gives you around 1000-1500 francs tax cut (kt ZH, base salary around 100k pa).

The BVG (2nd pillar) you collect are totally tax free (therefore around 20-24% win yearly in Kt ZH) and is a base social net for your wife and kids should anything bad happen to you, God forbid. Once you are ready to retire early, you can take the money to a Vested benefits account (Freizügigketskonto) when you're not in active employment anymore, can use it to buy (or cash out) property or can even cash it out for your own company if you were to create one.

I can see your thinking is a bit more millenial-ish than mine. But don't put all your eggs in one basket. Dumping all in SSON might or might not (have been) a good idea in 25 years' time.

FIRE and saving for one's pension is nothing close to instant gratification, it's a well planned marathon that you need to start early enough and think about your future wife and kids as well. Plus the inevitable market crashes in between.
You need to discount the forecasted cash flows that a 3a investment will potentially give you in x years and compare this against the cost (including opportunity cost) and tax savings. I have not made a precise calculation but concluded right now it's not worth it for me. Again my philosophy is a bird in the hand is worth two in the bush.

Your comments I think very likely have value for many people but you make a few assumptions about me that don't apply. For example, I am not married to my partner. The current tax regime actually serves as a deterrent. As we both work our combined tax liability would increase should we get married. Furthermore, we don't have kids and don't plan to have any.

My partner is Swiss and has a sizeable pension pot already. We both have a valid Testament and should anything happen to either of us the other will not go hungry.

Andrew Carnegie actually said to put all your eggs in one basket and then watch that basket.
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  #227  
Old 08.01.2021, 22:30
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Re: Equity Portfolio Advice

Found quite a good review of ARK funds (not just ARKK)

https://youtu.be/gLG1yDgnM7g
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  #228  
Old 09.01.2021, 01:44
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Re: Equity Portfolio Advice

My few cents.

Awful interest rate on 3a Pillar? After consultation with financial advisor in my bank, like I did in case of passive allocation of the 3a Pillar a few years ago, in CS invested in stocks with low risk level appetite. This brought my total portfolio to 6% up to date or appreciated by 3k.

Major pension 2nd pillar pay extra contributions for gaps in years not worked in Switzerland:

Stocks. Always pick the ones you know something of and at least the ones that are familiar to you on daily basis in your business or line of duty. Takes time but homework well done (due diligence) is vital for minimizing the risk. e.g. if you are electrical/electronic engineer, pick the tech stocks. In this case semiconductor companies are good pick. My current long term portfolio with mixture of dividend and growth stocks (15 max and I don’t go over 2k per stock):

Semi:
ABB
ADI
AMAT
AMD
MCHP
MU
STM
XLNX

Tech:
GPRO (hold)
NET

Media:
FB
SNAP
TWTR

Medical:
MDT
SNOA (my biggest mistake)

The above constellation made me 40% over 4-year investment period. Out of 15 picks only 3 are currently only slightly in red zone and the rest in green zone.

Gotta have balls, patience and don’t overreact when stocks drop (never). You haven’t sold it, you ain’t lose anything
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  #229  
Old 09.01.2021, 01:52
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Re: Equity Portfolio Advice

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My few cents.

Awful interest rate on 3a Pillar? After consultation with financial advisor in my bank, like I did in case of passive allocation of the 3a Pillar a few years ago, in CS invested in stocks with low risk level appetite. This brought my total portfolio to 6% up to date or appreciated by 3k.

Major pension 2nd pillar pay extra contributions for gaps in years not worked in Switzerland:

Stocks. Always pick the ones you know something of and at least the ones that are familiar to you on daily basis in your business or line of duty. Takes time but homework well done (due diligence) is vital for minimizing the risk. e.g. if you are electrical/electronic engineer, pick the tech stocks. In this case semiconductor companies are good pick. My current long term portfolio with mixture of dividend and growth stocks (15 max and I don’t go over 2k per stock):

Semi:
ABB
ADI
AMAT
AMD
MCHP
MU
STM
XLNX

Tech:
GPRO (hold)
NET

Media:
FB
SNAP
TWTR

Medical:
MDT
SNOA (my biggest mistake)

The above constellation made me 40% over 4-year investment period. Out of 15 picks only 3 are currently only slightly in red zone and the rest in green zone.

Gotta have balls, patience and don’t overreact when stocks drop (never). You haven’t sold it, you ain’t lose anything
I wouldn't even think about paying extra pillar 2 contributions. A one off tax saving is not worth baking in terrible performance for years. I'm delighted that my employer allows for reduced pillar 2 contributions, so I only pay 2%.

If you are going to do 3a I'd invest 100% in "world ex ch quality" (unhedged) with finpension. Like a poor mans FS.

Incidentally 40% over the past 4 years in this bull market is a pretty poor return. I've had considerably more than that in the last year.
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  #230  
Old 09.01.2021, 01:57
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Re: Equity Portfolio Advice

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I wouldn't even think about paying extra pillar 2 contributions. A one off tax saving is not worth baking in terrible performance for years.
It’s just the way of thinking along lines of conservative full Swiss pension, if remaining eggs in baskets start cracking.

Besides, the 2nd Pillar is a good chunk for home-loan deposit.
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  #231  
Old 09.01.2021, 02:09
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Re: Equity Portfolio Advice

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I wouldn't even think about paying extra pillar 2 contributions. A one off tax saving is not worth baking in terrible performance for years. I'm delighted that my employer allows for reduced pillar 2 contributions, so I only pay 2%.

If you are going to do 3a I'd invest 100% in "world ex ch quality" (unhedged) with finpension. Like a poor mans FS.

Incidentally 40% over the past 4 years in this bull market is a pretty poor return. I've had considerably more than that in the last year.
In the last year I saw over 100%, moving forward past unfavorable March 2020.

I’m not the Tesla & Bitcoin get rich quick wannabe but rather look at it long term.
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  #232  
Old 09.01.2021, 09:52
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Re: Equity Portfolio Advice

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rather than our age effecting our mindset.
Of course your age is effecting your mindset. You were kids when the 2000 meltdown happened and probably not had any considerable savings when the 2008 meltdown was raging, so most you have seen is an incredible and unprecedented bull run where most tech stocks went 10x if not 1000x, there is basically no reason for bonds of any kind and money is free for years. This is a massive echo chamber and probably a huge confirmation bias risk on your end.

Looking back and being proud of your decisions is a good thing, but prepare for the future and not the past. It might get considerably more bumpy. Hence, a single asset class and approach might bring you glory but also can be a disaster in 10-12 years.

Last edited by user137; 09.01.2021 at 11:30.
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  #233  
Old 09.01.2021, 11:59
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Re: Equity Portfolio Advice

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My current long term portfolio with mixture of dividend and growth stocks (15 max and I don’t go over 2k per stock):

Semi:
ABB
ADI
AMAT
AMD
MCHP
MU
STM
XLNX

Tech:
GPRO (hold)
NET

Media:
FB
SNAP
TWTR

Medical:
MDT
SNOA (my biggest mistake)

The above constellation made me 40% over 4-year investment period. Out of 15 picks only 3 are currently only slightly in red zone and the rest in green zone.

Gotta have balls, patience and don’t overreact when stocks drop (never). You haven’t sold it, you ain’t lose anything
If I'm understanding you correctly then the maximum you've put in to your equity portfolio is 30k. This is chicken feed. I think for many here that on a long term view it will essentially be a rounding error.
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  #234  
Old 09.01.2021, 12:08
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If I'm understanding you correctly then the maximum you've put in to your equity portfolio is 30k. This is chicken feed. I think for many here that on a long term view it will essentially be a rounding error.
Chicken feed for speculations. The real money go to real estate (rental properties)
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  #235  
Old 09.01.2021, 13:52
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Re: Equity Portfolio Advice

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Chicken feed for speculations. The real money go to real estate (rental properties)
I'm also quite deep in property investments that give a wide and stable cushion, also a comfortable fixed income. Besides, about the same amount in my BVG accounts.

That said, having zero money in these 2 classes and instead have put all this money into NASDAQ or even SP500 for the last 10 years would've been a massively more profitable decision. Alas, Captain Hindsight would be a multi-millionaire drinking Kool-Aid at the shore of the Zugersee by now. However, we don't see the future and I'm content with my decisions so far.

My personal target is now to raise the equity portfolio to the size of the above two classes, which gives a balanced portfolio of 33% property, 33% bonds(-like investments) and 33% equities. I reckon that's a portfolio that will definitely underperform compared to 100% equities but it gives a stability that lets one sleep at night.
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  #236  
Old 09.01.2021, 14:40
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Re: Equity Portfolio Advice

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I'm also quite deep in property investments that give a wide and stable cushion, also a comfortable fixed income. Besides, about the same amount in my BVG accounts.

That said, having zero money in these 2 classes and instead have put all this money into NASDAQ or even SP500 for the last 10 years would've been a massively more profitable decision. Alas, Captain Hindsight would be a multi-millionaire drinking Kool-Aid at the shore of the Zugersee by now. However, we don't see the future and I'm content with my decisions so far.

My personal target is now to raise the equity portfolio to the size of the above two classes, which gives a balanced portfolio of 33% property, 33% bonds(-like investments) and 33% equities. I reckon that's a portfolio that will definitely underperform compared to 100% equities but it gives a stability that lets one sleep at night.
We have 2 rental properties in London with small mortgages (both under 100k). so we Are relatively well diversified. I don't own any bonds though and probably won't ever.
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Old 09.01.2021, 14:59
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We have 2 rental properties in London with small mortgages (both under 100k). so we Are relatively well diversified. I don't own any bonds though and probably won't ever.
That’s a good starting point but try to aim at 5-10 fully paid by age of 50 y/o.

Had too much negative experience with unit trust funds allocated wrongly, hence think of cash 250k aside and 500k in pension by then. If shit is gonna hit the fan, and one day it will, with those highly overvalued equities then the name of the game will be to exit in time.
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Old 09.01.2021, 16:17
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Re: Equity Portfolio Advice

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If I'm understanding you correctly then the maximum you've put in to your equity portfolio is 30k. This is chicken feed. I think for many here that on a long term view it will essentially be a rounding error.
I find a movement of +/- 30k in a day a fairly regular occurrence, as you say a rounding error.
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Old 09.01.2021, 16:20
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Re: Equity Portfolio Advice

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My personal target is now to raise the equity portfolio to the size of the above two classes, which gives a balanced portfolio of 33% property, 33% bonds(-like investments) and 33% equities. I reckon that's a portfolio that will definitely underperform compared to 100% equities but it gives a stability that lets one sleep at night.
Thats only because you value the property by guessing rather than it's bid market value of ZERO, you are happy to wait a year, 2 years or 5 years to get your price. Why not apply that to equities & ignore the daily price. You have bought a share in a business not a lottery ticket, thats why Fundsmith strategy will pay off over time.
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Old 09.01.2021, 16:38
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Re: Equity Portfolio Advice

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That’s a good starting point but try to aim at 5-10 fully paid by age of 50 y/o.

Had too much negative experience with unit trust funds allocated wrongly, hence think of cash 250k aside and 500k in pension by then. If shit is gonna hit the fan, and one day it will, with those highly overvalued equities then the name of the game will be to exit in time.
Sorry but this is dangerous misinformation. Exiting the market is exactly what a long-term investor should not do. It's time in the market not timing the market that counts. I need to refer again to the chart I shared previously. It includes all of the occasions in the 210 years between 1802-2012 where equities were said to be overvalued, all of the crashes and all of the bear markets. Yet, look at what happened to each dollar invested over that period.

Last edited by Polymath; 09.01.2021 at 19:08.
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