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Again, I agree and I also aim for around 35 positions. Research has also proven that it is around 40 positions that we best reduce risks without compromising performance. If we deviate too much to the downside, the risk increases radically, particularly below 20. Conversely, if we deviate too much to the upside, transaction costs hamper performance, without providing marginal diversification. This is particularly the case beyond 50 positions.
I agree with everything my brother dividinde said.
– regarding your last question #3: if you want to pay low transaction fees, go to Degiro or Interactive Brokers. However, for buy & hold, the transaction fees are relatively low. Postfinance is not the best market from this point of view, on the other hand the custody fees are zero. Which answers your question #4. Dividinde will certainly also tell you to look at corner trade. I'll let him answer that subject 😉
– for question 5: if you do pure b&h, on large solid companies such as those provided for example in the dividend list, you do not necessarily need capital protection rules. It is an individual choice. Small clarification: the rule you mention (and that I apply) has nothing to do with the automatic stop loss orders that we set at our broker. It is a risk management rule to follow “manually”. Automatic orders are useful for traders, not for the type of approach used here.
Agree with you. A studio in a city, especially a big city like Geneva, will always be rented.
Thank you for your order!
I suggest you read my book before buying your shares. It will probably make you see things a little differently. It is difficult to answer your question simply. The market is currently very high, especially the big solid companies that you are looking for. It is also tricky to limit yourself to only five stocks. Even a big cap above all suspicion can reserve very bad surprises. I know something about it. For a portfolio up to 50,000 I recommend ETFs. From 50,000, I recommend mixing ETFs and stocks. But as I said, read my book first. It will become clearer.
Hello Caribou
It’s always a pleasure to read from Quebec readers.
Congratulations on your career. You had a rocky start and you were able to bounce back. It also reminds me of my career, in terms of the stock market, real estate, professionally and privately.
I am also a supporter of real estate. Like you, I own several physical assets. I also have some in ETFs. I increasingly prefer the latter means of investing in property, because physical assets are not diversified enough for my taste. Management is also much heavier and more complicated, both administratively, fiscally and legally. In addition, with the profusion of new apartments that have arrived on the market, the vacancy rate is increasing. You are talking about Valais, I know this market very well. It is saturated from a rental point of view in several cities. Finding yourself for several months without rental income is frankly a more pleasant experience. In short, I prefer real estate ETFs, which are more diversified and require significantly less work. You can also get rid of them with a click of the mouse if necessary, unlike property.
Regarding your questions, you will find detailed answers in the tutorial, the forum and in my book. In short:
1) Yes of course. I suggest Postfinance, Degiro or Interactive Brokers.
2) The yield of a security is only the result of the fundamentals. This is what must be examined. A yield that is too high is generally a bad sign. A stock market investment brings you on average 10% per year in nominal, 7% in real.
3) yes, see: https://www.dividendes.ch/?s=dividendes+exon%C3%A9r%C3%A9s and also read the comments on these three articles
4) especially not
5) then you are in the right place, as indicated take the time to browse the site, there are more than ten years of thoughts on the subject 😉
Bro, I hope you don't get hit by a truck, my God!
The idea is good, especially to take advantage of their offer. In terms of security, I don't know if it really brings a big plus. If your PC and/or network is hacked, you get both passwords hacked. And then anyway, there is two-factor authentication, so the security risk is very low.
And from a financial institution security point of view, you don't diversify. At the same time, there too, the risk is very low with Postfinance.
Ultimately the only big risk with your solution is that your wife will go to the Caribbean with your money :)
Hello frouzback,
Thank you for this email from an enlightened professional! It doesn't even surprise me and I always thought that the opacity of these products, as is too often the case in finance, was designed to enrich its issuers.
Finance doesn't need to be complex to work. Quite the opposite...
Hi bro. I have tried to get interested in options several times in the past. Several readers, including Paul Marcel from Celtinvest, also talked about it here at the time (he was more oriented towards selling put options). Apparently some have good results with these strategies.
However, as much as I am comfortable with financial ratios, the jargon and concepts related to options seem to me to come from another galaxy. I need to understand the mechanisms of an investment before getting started and from this point of view options seem too nebulous to me. But it is possible that one day I will change my mind. I did it for gold and Bitcoin…
They didn't fix it for you, are you sure?
That said, I sometimes wonder how much control (and understanding) they have.
Yes, IB only withholds foreign tax, not Swiss tax. It is therefore income that will be taxed by the Swiss tax authorities following the declaration.
Normally on your software you should be able to indicate yourself separately the value of foreign withholding tax and additional withholding tax in Switzerland (for American securities).
On VSTAX for example the two fields are independent, there is even a “Swiss deposit” checkbox, if you remove it, the USA deposit becomes grayed out.
Very easy
you go to the details of the DA-1 form
you create a line indicating your IB account number
you indicate under total in francs the total value that the report gives you under Net assets
you indicate under gross yield the total dividend value in CHF that you find under Dividends
under foreign tax you indicate the total value of withheld taxes in CHF which you find under Withholding taxes
and that's it
I contacted Will31, but unfortunately no answer yet. It's a pity, because he had already started thinking about the subject.
After just over a month of use, here is a first assessment.
The brokerage fees are attractive compared to what is done at most banks and brokers, especially in Switzerland. On the other hand, the fees are still much higher than IB.
There are certainly a fair number of Japanese small caps there, but not all of them, unlike IB.
After opening the account, it is not possible to trade certain stocks immediately, especially Japanese small caps. You have to pass a certain number of tests to show that you know what you are doing. This stigmatization of these stocks is surprising... Probably a residue of the paranoia of the bursting of the Japanese bubble in 1990...? At the same time, the questions are not too complicated.
There are some somewhat curious limitations and blockages with respect to certain orders. For example, still on Japanese securities, market orders are limited to a certain number of shares, sometimes even just one (even if the price is small). Of course, this is not catastrophic, since you can use a fairly large limit order, but I don't see the purpose of these restrictions.
The platform itself is user-friendly, intuitive and easy to use (much more so than IB's web platform). A good point on that side. I didn't need to install the application, so I can't comment on the latter.
In short, not bad, but not great. I still much prefer IB. Given the absence of certain stocks, the slightly higher rates and the slightly strange restrictions, for the moment I currently only have one position and I don't think my portfolio at Degiro will grow significantly in the near future, at least not for Japanese stocks. This could change if the Swiss and American markets become cheap again one day.
