A central bank can devalue a currecy if they want. No problem.
More difficult to keep it strong once it’s value starts to deteriorate…
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Since we don’t have a “focused venting” topic (it would surely break the computing quota for the forum, with my contributions alone 
…) I’ll post this here from a Swissquote email update that I received just now:
Read especially the bottom line: no return on cash deposits in your custody account regardless of currency.
Anyone, really, convince me that Swissquote isn’t just a bunch of clowns optimizing only for Swissquote?* and fleecing their existing customers?
These rascals are siphoning away between 1% (CHF) and about 5% (USD) of return they get for free from the SNB and corresponding central banks.
Did I mention that I really dislike Swissquote, as a customer?
* Obviously, I am not a shareholder … 
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Isn’t that the traditional retail broker business model? (earning interest on cash was how most brokers were making money, before PFOF became fashionable)
Probably? Still feels disgusting to me.
Maybe I’m … hm, too sensitive?
Well swissquote is an investment/trading platform, so if customers want interest they have to go find it themselves.
But I do agree that investing in bonds is not that favourable at SQ, especially swiss ones, since the trading fees already consume some of the interest. These fees probably also have something to do with the swiss exchange, which IMO is more expensive than others.
You are both of course completely correct.
I don’t know why I get excited about companies making easy money because … well, I don’t know, because of complacent customers?
I still deal with Swissquote and feel conflicted that way, but from a pure customer perspective, their business model looks like exploting the financial illetaracy of their average customer?
Maybe I am just a little too naive for how this business works …
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Convenience. Try to convince an average citizen that has significant wealth in investments to switch to a broker outside CH: not happening. Such people already need a lot of convincing to switch from UBS/Raiffeisen/Kantonalbank, which are probably at least 3x as expensive if not more.
In my view, SQ offering is good as it is relatively cheap (compared to traditional banks), has a track record, broad product range and based in CH. Of course including alternatives abroad changes this picture but simply isn’t relevant for the target group.
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Since I have enough equity in IBKR, I wanted a Swiss alternative and looked at Swissquote (Saxo bank isn‘t „Swiss“ enough for me). Oh god these costs… 9.- per trade! And you have to avoid exchange fees. Yes, I feel a bit exploited. 
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Had IBRK as well and since I started a new job at a bank, I am forced to have everything there.
On one hand, no custody fees but on the other hand, a flat fee of CHF 40 per trade 
So, take the CHF 9 and enjoy life, there are other things you can optimize (I guess).
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9 chf per trade seems fair to me.
These companies have tons of regulatory things to comply with, need to pay employees etc.
It cannot be done for free.
If you see the “free trade” brokers in the USA, they sell your trade data. Then HFQ funds buy before your trade. Then you pay the trade via spread.
I would rather pay to a legit broker for the service than through a backdoor.
The real ripoff in CH is the ridiculous stamp duty, (which also makes it impossible for the CH financial market to be competitive internationally)
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We just go minus rates again 
The days when you GOT PAID to borrow money with a box spread. I still can‘t wrap my head around that
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You usually get a price improvement actually (they pay to know it’s not a hedge fund/toxic flow, retail/uninformed flow has a lot less risk for them)
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I dont really understand what you mean.
My understanding of the free brokers was the businessmodel:
The have all these retail investors who generate flows. Freebroker sells this info to a hedgefund (e.g. robinhood to citadel).
The hedgefund place their trade in the same direction before the retail traders order arrives.
Hedgefund executes first, at more favorable price. Second the retail order is executed at new price which is less favorable.
No?
No really, that would also be illegal (the broker has to at least improve on the national best bid/offer).
The broker routes the order to a market maker which provide liquidity, the price is an improvement compared to the public quotes on visible exchanges.
Because the market maker knows they’re not going to be screwed over, they can provide a much tighter spread than they would to e.g. a hedge fund (because the hedge fund might move millions of dollars, and likely is doing this trade because it thinks it has more information about the way the stock is going than the market maker).
(For a retail flow, the market maker can afford having things stay a bit longer around, since the price will likely move randomly, so for example it can buy/sell the share directly keep it in inventory and wait until someone does a buy/sell, etc.)
edit: this price improvement is shared between all three people, the market maker keeps the spread and the broker gets paid to provide the “uninformed” flow, the customer gets the price improvement compared to sending the order to an exchange. The debate is usually about how the distribution between the three actors should be (e.g. robinhood was getting 60% of the cut which is quite a bit, other brokers might only keep 30-40% which means a better price for the customer)
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Thanks for elaborating.
I saw that too.
I am thinking of keeping my uninvested cash invested in Pictet money market fund which has no stamp fees as well and is available on SQ.
I am thinking to do this after pictet pays its annual dividend because otherwise I would have income tax without really gaining anything 
I also have a conceptual question
What can be assumed about MMF when it comes to distribution income vs. Yield? Is it different in falling interest rate environment vs rising interest rates environment?
Normally for bond fund , we can see clearly the coupon payment vs. YTM. But for MMF , this info is not very clear.
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I think the story of Indian stock market is very similar to US stock market. It’s now driven a lot by retail investors adding high liquidity.
In addition, NIFTY 50 PE ratio is high. But it also has consistently increased earnings. In fact in USD terms nifty 50 might be only index in the world which has come closer to S&P 500 in last 5 years. And it’s not a surprise that these are two highest valuation markets at this moment.
There are multiple reasons behind this
- in early days lot of Indian stock market, moves were driven by foreign funds but after covid there is a lot of interest from retail investors.
- We have a model called SIP (systematic investment plan) where people invest every month into a mutual fund and these SIPs have a quite significant flow of money.
- If you look at earnings growth of these companies, you can imagine why the PE multiples are high.
- I still think 24 is high multiple. But Indian GDP is growing 6-7% and inflation is 4-6%. So it’s quite normal for companies to grow earnings more than 15% in nominal terms. It doesn’t justify 24 PE but it also mean that PE for Indian market shouldn’t be compared to Europe where growth is less than 2%.
- Most Indians don’t have luxury or even interest in international investments and it’s not made very convenient like in CH. So most people only invest in Indian markets.
- I believe when the Ukraine war started , it became obvious that India might be the only large economy without serious one sided love affair with west or Russia. This kind of brings some faith
A bit about why it’s tough for foreign ETFs to track well their indices
- there is Long term and short term capital gains tax that is applied in India on sales of shares. It’s same for local or foreign investors.
- However unlike in US where Foreign ETFs can completely avoid capital gains, in India it’s not possible. So if you look at the ETFs like FLXI or QDV5 , they always have provision for unrealised capital gains. This is why they cannot track their index well.
- I actually think QDV5 might have less turnover vs FLXI and thus it tracks the benchmark index a bit better. I am still debating which one should I hold because this capital gains tax kind of erodes advantage of lower TER for FLXI
- Indian mutual funds don’t have this issue because they act as pass through entities and the investor is only liable to pay capital gains tax when they redeem their mutual funds units and not when MF do the buy/sell. However such funds can only be accessed by Indians or NRIs (non resident Indians)
Your Indian friends who say that everyone should stay away from India markets might not be very fair.
I really like the quote from Prof Damodaran few weeks back. „When people say a market is overpriced, then they somehow say they know more than everyone else and others who are buying at current levels are not very smart. Often they are proved wrong unless they really did the homework. So one should buy or not buy but they shouldn’t assume that whole market is wrong“
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I don’t think it’s very fair.
Most of the personal accounts in most banks don’t pay any interest. Perhaps it’s different for neo banks like Neon, Yuh but SQ don’t compete with them. Infact as we know Yuh is kind of a product from SQ.
UBS, ZKB etc also don’t pay any interest on personal accounts. Swissquote uninvested cash is actually like personal account in UBS because it is a bank account which can be used to make payments.
I am not sure how much money can they actually make using the uninvested cash while maintaining the strategic ratio. So perhaps they reduce incentives and hope people either move money to Savings strategy or MM funds. This is why SQ offers 0.75% (new rate) for savings strategy where 25K per month can be withdrawn without notice.
I would be happy if SQ can optimise the trading fees though and find a way to reduce custody fees because their AUMs have grown.
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I think this also has something to do with what’s going on in Middle East. CHF is generally moving up during dark times
Thanks for your analysis, much appreciated!
You may be right, I guess the point is they don’t trust their compatriots, and neither do I mine. Maybe we’re self-hating expats!
I like the quote a lot, in fact I read his blog for a while now (though it’s far more technical than I can digest), my emotional block with the concept of the quote is being active vs passive. And also where does one draw the line of what’s overpriced vs what’s assessing a new situation with old tools? For instance I’d look for the Shiller P/E for the nifty 50.
More specifically, personal experience with nvidia is along the same lines: bought at 200 (was overpriced according to P/E), sold at 400 (still overpriced), then it went on to pull a 3x in 6 months (STILL overpriced). Who’s in the wrong? It grew its earnings, exactly as you said for the broader example of the Indian market, and price followed earnings.