I’d like a suggestion on a better way to deal with my investements considering my “mental constraints”
At the beginning (couple of years ago) of my investing, I used to buy mostly low-cost ETF and a couple of safe stocks, however now I moved to “cheap” but much more expensive investment funds from Postfinance.
Why did I do that? My problem with the regular stock/ETF market is that I have to actively take decisions even if I do not want to. I was spending too much time looking at the specific ETF, waiting for the best moment to buy it.
I also tried saying to myself:“buy it twice per month at a specific day independently of the price”. But even like that, I saw myself spending time in the etrading platform looking at my current situation and the results of the investements.
Instead with the Postfinance Funds, I can simply say:“Take X CHF twice per month and re-invest the dividends automatically”. Then once every three months I connect to the web interface and look at my results and think about changing something.
However for this “peace of mind”, I spend much more (0.5% more in average) than before.
I also considered TrueWealth that would fit the requirements except that the TER would be even higher…
Is there a different way of doing it considering those requirements? Any idea?
quite expensive “peace of mind”… Moreover, if every three months you still have to think about changing something…
Are you buying the PF Funds or the “third party” ones ?
I personally use PF funds only for the 3rd pillar, for the “unlocked” investments I choose by myself and buy through the broker. Surely the most difficult thing for me is to “stick” with a strategy (or IPS, have a look at the recent post of our friend RIP for further elaboration on the theme… http://retireinprogress.com/ips/ ). I’m not sure that the funds solution would solve my problem…
Anyway, even with PF funds it would be better to understand in which market you are putting your money (i.e. reading the fact sheets). Once you’ve done it, you could then replicate fund strategy with lower costs (accumulating ETFs).
One thing I don’t understand about these PF funds is that according to the fact sheet they usually perform worse than their reference index…
This said, I don’t know other strategies, let’s see what the MP friends think !
I’d recommend (as @weirded said) to define your strategy and stick with that.
There’s no point in “waiting for the best moment to buy it”.
What does it mean? Is there a best moment?
Robo-adviser or any other automated wealth management tool (like PF funds of UBS funds) is both expensive and lacks control, in my opinion.
Learn how to control your feelings and then go back to real assets.
A thing that helped me a lot was to play with a paper money account on interactivebrokers. They offer you a fake money account with 1M USD to play with it. I’m still playing with it. What I do with my paper money account is whatever is commonly accepted as wrong and emotional. Trying to time the market, buy stocks because “I think this company will grow!” (like the high expectations are not already reflected in the stock’s price…). Result: my emotional fake account value is now 950k, 50k below its starting value, in a bull market! 10k out of the 50k lost is for trade fees. If you’re emotional you trade a lot and it makes the game not a zero sum one anymore.
I think - but I’m relatively new to investments - that wise long term investors don’t move their money around very often.
@MrRIP: I absolutely know that there is no best moment. The issue is I cannot avoid spending time when I login in an etrading interface and I have to take an active decision in buying it.
Instead with funds and/or roboadvisor I can simply automize everything and not think about it.
What I would need is a way to do the same with ETF: an automatic way of buying a maximum of x CHF per month of a specific (or a set of) ETFs (maximum of as you cannot buy fractional parts like a fund…). Why nobody offer such a service? At the end it would be a way for brokers to “guarantee” a certain revenue of their services…