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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.
Hi
This is outside my area of expertise, but you can already read this post by a reader who is following a similar path to yours. I'll try to contact him about your topic. Maybe he'll have some ideas...
Hi Xavier,
Ok, thanks for the info. I was also thinking that it had nothing to do with a cash or margin account.
No worries, I understand because I have the same problem as you. I work endless overtime, it really tires me out. I would like to be able to move forward fully on my personal projects and it limits me considerably. At the same time I don't want to complain because many are in a nameless mess much worse than me, because of the closure of their establishments.
What a paradox, some work like crazy and others are unemployed... This Chinese virus exacerbates the inequalities of the Rat Race.
Ok thanks for the feedback. Keep us informed if ever of the result of your efforts, it is always interesting to know.
Frankly, these taxes on dividends are disconcertingly opaque and complex. I think that this was designed like this by the IRS officials so that no one would claim them! I looked into where this rate of 28% could come from but it doesn't make sense. If they taxed you as a US resident it would normally be 30%. As a Swiss it would normally be 12.8%. Maybe they do consider you as a legal entity... Weird. Maybe write to IB to ask them.
I also looked at my Japanese dividends and it doesn't match either. I'm taxed at 15% when it should be 20% (at the same time I'm not going to complain).
In short. Frankly, I don't bother too much with these details. In any case, you have to apply for a deduction from your income tax in Switzerland. To do this, the DA-1 form (application for a flat-rate tax deduction) must be completed when you file your tax return. This allows you to avoid being taxed a second time on the entire amount already deducted (in the end, it's like the Swiss withholding tax).
Except for Finland, you can get at least half of the extra tax back this way. For the Netherlands, it's even the whole amount.
The question that arises is for the balance to be recovered. Here it becomes not only complicated, but also quite expensive. For dividends from certain countries, it is mandatory to go in person to the financial institution. For other countries the procedures can take several years. In addition, these requests generate additional administrative costs from the bank and public administrations which often exceed the balance amount that could be recovered! This means that for it to be worth it, a large dividend amount would have to come from the same stock and the portfolio would not be too fragmented. It is therefore difficult to apply when the portfolio is somewhat diversified, across several stocks and countries.
So recover in flat-rate tax via the DA1. And for the rest, it's up to you to see if you want to fight to recover them and especially if it's worth it. I don't know for France if you can recover the whole thing or only half via this means.
And then if you don't want to be bothered with withholding tax on dividends, you can buy British stocks which are not taxed.
Thank you soon
This article is really excellent. If it wasn't so long, you'd have to make a poster out of it to put up somewhere in your house. It sums up everything I think: the manipulation of the markets by the FED and its low interest rates over time, growth stocks vs. value investing, Tesla, the analogy with previous bubbles, the Buffet ratio, the PE Schiller ratio, COVID, etc. Everything is said and perfectly said.
The author is betting on emerging countries and value, as well as avoiding US growth stocks. I feel well positioned and I think many here are too. I hope that we will finally have a real return to the forefront of value stocks soon. The circus of mediocrity has gone on long enough.
Ah ok. Don't forget to filter according to average daily volume of securities >100,000 dollars (see ebook "With what volume"
Ok.
For margin accounts, the big difference is that when you place a purchase order, it draws cash in the currency of the security in question, even if you are at zero (and you go into the red in this currency). So you have to rebalance the cash from one account to another, either immediately, or a little later if you want to play a little on the exchange (but not too long anyway because negative interest).
On FT you can also create multiple portfolios, representing multiple accounts. You can also view dividends paid and their dates. You also see asset classes, countries and sectors.
Only Bitcoin is missing, but I make a Bitcoin tracker entry for a corresponding amount when I buy some directly.
In short, it meets my expectations and I certainly don't have the courage to do everything again elsewhere 🙂
So I don't think I'll test it but I'm always listening if you make new discoveries.
Hello Xavier
It must be the residue of the end of year celebrations but I don't follow you on the first part of the message.
Surprising for Norway. I think I could trade there even with the cash account. But that was quite a while ago… Are you sure you enabled that country in the settings. For Finland I never bought anything there and I can't find it in the settings.
Yes I have the margin account (Portfolio Margin). Which one did you take?
Hi Xavier
thanks for the link. What advantages over FT and/or which of your expectations were not met compared to FT's portfolio?
Thank you and have a nice day
Jerome
I don't know Lynxbroker. The rates seem reasonable but still more expensive than DG, right? Compared to IB, we should see, as you say, according to the frequency of trades and the size of the portfolio. However, even for small b&h portfolios, there is a certain margin in favor of IB, it seems to me, even if we had to count the monthly penalties for no trades. Indeed, the minimum transaction fees at Lynxbroker are relatively high.
Regarding the stock exchanges, I am not an expert on European stock exchanges, but I believe that BATS Europe and CHI-X Europe are now one entity, where a very large quantity of European stocks are traded. SWX is simply the Swiss stock exchange. Turquoise CH, no idea, I don't know. VIRT-X I think it no longer exists, but at the time it belonged to the Swiss stock exchange and you could trade European blue chips there.
Well, I just placed my first order with DG, twice as expensive as IB, but still reasonable (20 bucks).
Indeed, Mystik, the transfer fees for securities in Switzerland are a scandal. You almost have an interest in reselling, transferring the cash and buying back right after.
