As I was prompted to create my first thread from MP (I was indeed searching for the incentive…); I thought I better begin with just my out-of-the head completely beginner questions:
Assumming an amateur “mustachian” investor portfolio (3-4 ETFs) with long term-strategy (15-20yrs):
Does it make any difference when you exactly start investing in the economic circle (e.g. recession, grwoth etc)? Currently we are in the middle of companies struggling, short-working times, covid etc…
Does it make any difference if you buy your ETFs in the opening or in the closing of the exchanges? Is there a simple / easy strategy for setting the limit in a way when you buy/order, that might help you saving even very few pennies?
Assumming that one currency might lose value to another currency over time, does it make sense to split also the portfolio in ETFs with different currencies? Assumming that you have 10% returns on a USD VT after 10 yrs, but in parallel USD has lost power over CHF and then you have to withdraw and exchange your money back in CHF, will you practically lose money or my thinking is totally wrong?
Assuming you have 10kCHF invested in USD, Swiss, EUR ETFs, Putting it simple how this would have to be declared in your taxes and how (very simplistic) would you be taxed for it?
If you keep investing regularly, it makes no difference. In the initial period, you will be more focused on learning, making your own mistakes (with small amounts) and learn. And over time, it averages out.
If you have a lump sum, it makes a difference but only if you know the future. I don’t know anybody who does, so that in practice it doesn’t. A lump sum can be invested in smaller parts over a year but that’s only for psychological reasons. There is a relative consensus in passive investors that the best time to invest is always now.
I think it only matters for large amounts and then it is recommended to directly talk to the ETF provider rather than buy on the market. If you invest smaller amounts over 15 years, I don’t think you can really optimize much.
The currency in which an ETF is listed is irrelevant, as you really hold what’s inside. But maybe your question is about hedging. I recommend this other thread in which this is discussed in details.
You need to declare all your assets (wealth tax) and revenues (dividends, interests for the income tax). There is a special form for it (Wertschriften- und Guthabenverzeichnis for example). If some of the revenues were subject to the Swiss withholding tax, you will get it back. If you have a Swiss bank or broker, you can get a tax statement (for 100 or 200 CHF) in a format the authorities usually accept, and then you only need to copy over a few numbers. Capital gains are not taxed, but only if you don’t push it and only invest like somebody who manages their private assets. If you keep buying and selling, for example, you could be classified as a professional trader and then capital gains are taxed as income.
Disclaimer: I’m not a financial advisor and am only sharing my experience. This is not financial advice.
3-4 ETFs seems a lot. You can do with one, max. I would say two to keep it simple.
Make sure you choose liquid ETFs, and then you can nearly do market orders without much losses. Of course I always recommend to do a Limit order during Opening times of the relevant exchange. BTW, you are Talking about saving 0.1% per trade (Maybe), and you are Looking for a gain of almost 200% over 15y (assuming 7% growth per y).
I would say that makes not much difference, since it is about the intrinsic Underlying value of the Companies in the ETF. Furthermore, it will be most probably compensated by the change of buying power of a certin currency in a certain country.