Crash course on investing

Investing / Portfolios
1

This thread should give an short overview on the why and the how to invest. I want to extend it to something like a knowledge base summing up inportant information. lots of it is given here in a very not-so-ordered form. please add your comments about other important topics. You are welcome to post texts that i can implement into this head post :slight_smile:

Todo:

  1. pros & cons: distributing etf vs accumulation
  2. pros & cons: swiss based vs. foreign based (Ireland, Luxemburg, US,…)
  3. swiss taxation: dividends, foreign dividends,…
  4. extend theoretical backgroud: thoroughly motivate passive investment
  5. add adjustable examples, i.e. excel calculations

Theoretical background

Mustachian investing is based on the most rational thing to do. this a priori excludes all sorts of gambling, i.e. Casinos, daytrading, CFX, stock picking, market timing, playing lotto for financial reasons,… to name a few. The backbone is the Nobel Prize winning modern portfolio theory. Its main Ideas are

  1. Markets are efficient
  2. Markets are random, although returns converg to a positive mean value over time

some basic deductions are

  1. an increase in expected return always increases risk
  2. You can neither predict nor outsmart the market beyond luck
  3. Even professionals fail to do so on average, so dont waste money on expensive managers
  4. But you can follow the market up to very small fees, and be better off than in any other way on the long term

ETFs / mutual funds

  • cost of investing
  • cost of letting others decide for you
  • optimal solution: ETF’s, Index funds and Buy&hold

how to get started

  • how to find your risk tolerance level
  • how to put together a portfolio that suits that level
  • how to find individual funds
  • how to actually buy an ETF, or even find out what is available

Handbook of taxation

Further literature

What I read in the past

Here the list of Books that made me think the way I think about investing. Being a Mustachian, i got them all from the library for free :wink:

  • 07.2014 Private Equity ein Thema fĂĽr Schweizer Privatanleger? Bruno Bachmann Bachmann, Bruno
  • 07.2014 Souverän investieren mit Indexfonds und ETFs wie Privatanleger das Spiel gegen die Finanzbranche ge Kommer, Gerd
  • 08.2014 Was Sie ĂĽber Geldanlage wissen sollten ein Wegweiser der Neuen ZĂĽrcher Zeitung fĂĽr Privatanleger Ferber, Michael
  • 01.2015 Exchange Traded Fund-Rating MarktĂĽberblick, Einsatzkriterien und Praxiseinsatz Oliver Everling, Gö Everling, Oliver
  • 02.2015 Portfolio theory and risk management Maciej J. CapiĹ„ski, Ekkehard Kopp CapiĹ„ski, Maciej J.
  • 02.2015 Exchange Traded Funds (ETF) Grundlagen, Funktionsweise und praktischer Einsatz [Hrsg.: SIX Swiss Exc Picard, Alain
  • 02.2015 Die Buy-and-hold-Bibel was Anleger fĂĽr langfristigen Erfolg wissen mĂĽssen Gerd Kommer Kommer, Gerd
  • 03.2015 Anlegen wie die Profis mit ETFs Claus Hecher Hecher, Claus
  • 04.2015 Modern portfolio theory and investment analysis Edwin J. Elton … [et al.] Elton, Edwin J.
  • 09.2015 Exchange traded funds und Anlagestrategien das ETF-Praxisbuch Daniel Niedermayer und Marcel Wagner Niedermayer, Daniel
  • 09.2015 Steuern alles Wichtige ĂĽber Einkommens-, Vermögens- und weitere Steuerarten mit vielen Tipps zum S Metzger, Thomas
  • 11.2015 The power of passive investing more wealth with less work Richard A. Ferri Ferri, Richard A.
  • 02.2016 All about asset allocation Richard A. Ferri Ferri, Richard A.
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