Fun fact: Bogle was a lot more active than he preached, as is Buffett. Or to paraphrase Munger “index investing is good only if you don’t know what you’re doing”.
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Insprired by @Abs_max my new hashtag is going to be
# passive stock picker
Oof … Ouch! … aren’t those punches below the belt line forbidden in forum boxing? 
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Well, it’s true though innit? Charlie didn’t mince his words!
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It’s true but it doesn’t slice the way some might interpret. That “only” is a pretty big one. Most of us, most of the time, don’t really know what we are doing. Acknowledging that isn’t a sign of weakness and passive investing is good in those situations.
The time not spent in increasing our investing knowledge and studying companies can be spent on other things that might increase our value more (by increasing income) or bring us more joy.
Active investing isn’t a bad word either for those who think they know what they are doing. To each their own.
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Good to know though is that Meb is an advocator for international 
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Yep 100%, Charlie was also balanced. Sounds like he’s looking down on index investing but he didn’t actually say it’s bad. What never ceases to amaze me with this epic duo is how accurate and economical both are with words.
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Agreed. Your point is of course correct but orthogonal to …
My point, which was really that index investors actively messing around in their portfolio with this-ETF versus that-ETF aren’t really as, ahem, passive, as they think they are.
As the hypocrite that I am, completely along your orthogonal line, I believe passive is great, especially internationally*, where I consider myself preferring to spend my time on international things (wine, cheese, bread, …) that bring me joy rather than trying to understand how international companies really work, report earnings, are best fundamentally valued, etc …
Narrator: “Goofy logs into his Swissquote account to look at his quite sizable VXUS position and zooms into the performance graph until he’s found a time frame where VXUS returns look absolutely fabulous.”
* Why the heck -- as a Swiss -- do
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Sure! And true. I haven’t developed my reasoning enough to address that: when I write that “active investing” isn’t a bad word, what I’m implying is that there’s no reason to deny it when we are and want to absolutely stick a passive label to ourselves under the premise that “passive is good” and “active is bad”.
Messing around with our portfolios no matter if using passive ETFs is an active move.
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I think there’s a lot of dogmatism - not here but in other fora/social media - and people don’t differentiate well enough between layers of active vs passive investing vs trading vs degeneracy in r/wallstreetbets.
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Based on this recent micro-discussion, I’ll re-launch @oslasho 's poll into
folks, have you made any [significant] changes to your portfolio recently?
o yes, I am active.
o no, I am passive.
o WTF?
o Show me the results!
I’ll see myself out now.
Everyone enjoy the rest of your Easter Sunday!
Don’t fret: Easter Monday is coming up any day now!!!*
* For many of us anyhow. For those of us working today and/or tomorrow: thank you for providing your service to us lucky bastards!
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To be fair, Ben Felix mentioned multiple times that if he was a DIY investor he would hold a single “Vanguard and chill” like World ETF (assuming something like VT or whatever is available in Canada). That actually surprised a lot of people in the RR community!
Holding “just” the market with a single ETF makes active decisions, especially in bad times, less likely to happen. It is superior when it comes to psychology and behavior but also in terms of simplicity and even cost.
Now, if you behave like a machine and you want to spent more time on the field, you can differentiate slightly from the market:
a. Add some home bias. Per latest Scot Cederburg paper, anything between 10-50% domestic allocation has practically the same effect. Still the benefit is relatively small compared to 0%. Even himself hasn’t changed his portfolio - 50%-50% domestic-international allocation (he is US based)
b. Factor tilt - pursue other premiums on top of the market premium, like small cap or value. Ben Felix expects around 0.40% premium net of fees over a long period. The problem is that you may need to wait for more than 10 years for the premium to appear. Moreover many suggest that the premium especially in the US might have disappeared. In any case, even if there is no premium, the fact that tends to pay more on markets downturn, helps in bad periods.
c. …
I am not sure at all that my tendency to become more active (not stock picking - but reducing exposure to US, home bias, other premiums etc) will turn out to be good long term.
He has also a nice video about US VS World:
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He would be holding something like VEQT which is Canada home bias + VT basically
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Thanks for sharing some info.
Only thing I remember from Ben Felix recommendation was 1/3 each for Canada, US & rest of the world
Never really saw the video where VT was recommended. But good to know
To replicate this ETF (which is really interesting for canadian investor) as a Swiss investor, the simpliest way would be to hold 30% of SPI + VT (and other all world ETF)?
That would roughly be a replication yes (technically you’d need to subsctract the ~2.5% CH weight in VT and that also fluctuates then by time, but overall negligible)
I however think that 30% SPI would be a bit much, due to Nestle/Roche/Novartis making up 50% of the index.
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I take SPI as an example for having the total market of Switzerland. I would personnaly go with SLICHA in that case (basically what I’m doing at the moment). So my strategy to have between 20-30% of home biais is on the good train
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I disagree, that you can say that generally.
You have the benefit of true 0% withholding tax (and no struggles to claim them), and 10% of the dividends come as tax free capital gain, that you have uniquely in taxable.
CH stocks in taxable make them better than develop/emerging markets therefore.
If you would truly optimize, you‘d only hold developed ex-CH and emerhing markets in 3a and US/CH outside of it.
At current yields (that may change even in 10/20 years, who knows)
But that gets messy real quick.
Also depends on the size/contributions of your portfolio.
I‘d just mirros the allocations, not worth it to optimize here imo.
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My strategy is: VTI in taxable and the rest of the world (1/3 of it being Switzerland) in retirement accounts. Gets me close to 70% US, 10% Switzerland, 20% rest of the world.
Eventually I‘ll end up with VEA and VWO too as my taxable account is growing much faster due to much higher contributions. I guess in 5-10 years I‘ll be 100% CH in retirement accounts.
Did you run the numbers on CH vs. exUS developed world within 3a?
There are 3 groups in typical 3a accounts
CH, MSCI World ex CH, EM
Dividend yield is 2.9%, 1.8% & 2.65%
Looking at this EM & CH within 3a should be better
I didn’t understand the comment about tax free capital distribution. I know what it is but I think it’s not part of dividends. In your view , is it included within 2.9% or on top?
US assets are generally held in US repositories. That is also true for assets purchased through Swiss stockbrokers and “held” in Swiss custody accounts. Likewise, assets from other countries are generally held in local repositories in those countries or regions. The situation is similar with commodities.
More important considerations are where the actual company or other entity you are investing in is domiciled, and whether or not you are registered as a shareholder or creditor with that entity. E.g. If a country where to forbid Swiss citizens from owning shares in companies, then where the stock certificates or records are held would completely irrelevant. Same thing with commodities.
Of course, there is also the flip scenario: If the country you live in were to forbid you from owning assets in another country (as the EU/Switzerland did with Russian assets, as one example), but the country where your assets are held does not, then you would remain the legal owner as per the laws of that country.
Personally, I see more logic in being geographically diversified than in putting too much trust in the political/legal framework of any one country.
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