Market crash around the corner ? Invest into ETFs (VT, VWRL, UBS SMIM) or Bitcoin and Gold now?

Hi all

I am new to investing into ETFs and been digging deep into the MP forum and doing the swiss investor program for days now.

I am on the verge of deciding on whether to put around 150kCHF into ETFs (VT or VWRL plus UBS SMIM) or more BTC and gold, considering a market crash could be around the corner / the current (US inflation related) bull run is coming to an end:
e.g. 'Rich Dad Poor Dad' Author Says Market 'Crash Landing' Coming for US

I know that timing the market is not the strategy for a mustacian ETF investor.
However, going lump sum into ETFs now might not be the right advice either, if we see massive market corrections.
So, I am currently thinking of the following strategies:

  1. Buy & Hold 150kCHF via DCA over 18 months into VT (stil clarifying if US estate tax can be managed easily with some external help, else its a burden, else VWRL) OR VWRL, additionally UBS SMIM

OR

  1. Trading: Lump 150k into VT or VWRL plus UBS SMIM and wait, until the end of the bull market / beginning of bear market, then sell all positions to trade in possible gains, then buy again at a decent price in the bear market (timing needs to be analyzed)

OR

  1. Go safer and lump 50kCHF into VT or VWRL, 25kCHF into UBS SMIM, 25kCHF into BTC and 25kCHF into Gold.

What do you think how long would be current bull run go ?
What would be your strategy advice ?

Looking forward !
Thanks

1 Like

Buy VT every three months with your savings and don’t watch your portfolio in between. I have not been able to predict the market until now. I personally don’t like bitcoin and I don’t like gold. People will buy CHF when shit hits the fan so at any time I am staying with a bit of savings in cash.

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Even the most broken watch is correct twice a day.
That said, Kiyosaki sound more the proverbial broken record:

'Biggest crash in world history': Robert Kiyosaki issues another dire warning and now avoids ‘anything that can be printed’ — here are 3 hard assets he likes instead (09/2022)

Kiyosaki: 'Biggest crash in world history’ hits in October — 3 ways to protect yourself (10/2021)

‘Rich Dad, Poor Dad’ Robert Kiyosaki on the looming market crash, ‘God’s money,’ and why he’s looking like a genius - MarketWatch (06/2019)

https://www.news.com.au/finance/economy/australian-economy/rich-dad-poor-dad-author-robert-kiyosaki-warns-biggest-crash-is-coming/news-story/4672aa37ae875923f27a25adb9ce05fb (08/2018)

Why ‘Rich Dad’ author Robert Kiyosaki still thinks the market is about to crash - MarketWatch (02/2017)

Robert Kiyosaki: Biggest Stock Market Crash In History Coming In 2016 | Seeking Alpha (04/2016)

Robert Kiyosaki bravely predicts a global market crash this 2016 that is 20% WORSE than the 2008 economic crash (10/2015)

12 Likes

Good summary!
Really interesting is that the only crash in this period (Covid-crisis) happened the year without any warning from Kiyosaki (2020).
Personally, I would be worry when he will stop to warn for a crash :wink:

1 Like

Well, he finally got one early in the year.
Though probably not for the (economic) reasons he predicted.

You express some risk aversion. That suggests DCA may be a way to invest that fits your personal risk tolerance.

18 months does not seem a very long period to do so, considering how long markets have taken to recover from their peaks after a crash.

Do also account for your current (or anticipated) income and savings rate. If you can save CHF 1’000 a month, 150‘000 is a lot of money (relatively) to invest at once. If you can save 5‘000 or more, you’ll recover much faster from an ill-timed initial lump-sum investment.

3 Likes
  1. dca will probably work fine.

  2. trading will probably teach you some valuable lessons :slight_smile:

  3. ‘go safer’ … ‘into btc’ … i’m not sure, but you do you :slight_smile:

good luck!

2 Likes

Assuming you are young-ish, in good health and in employment with a 2nd pillar, you are investing for the long term and 150k CHF represents a significant amount of your net wealth => then I would go for option 1

Don’t waste time analyzing US estate tax as it applies after something like 10 Million. You can always change at a later date

Read this analysis of Trinity study. A conclusion is that if you are investing for a long term higher equity allocations can actually decrease risk.

1 Like

Btw: I am 48. Current free capital: 170k for allocation on stocks, 50k cash reserve. 2nd pillar, 3rd pillar @ VIAC Global 100 soon.

Further strategy suggestions?

Change what to what?

Some things:

  1. Don’t try to beat the market. Most active managers struggle to do it. Dumb retail money (i.e. most uf us probably) even manages to generate negative alpha before cost (e.g. buy high, sell low).
  2. Gold and crypto can have a place in a portfolio. As highly volatile sometimes un- or anti-correlated sources of risk. Especially wanting to allocate a third of your portfolio to it, whilst calling it safe, talking about having very few experience and wanting to time the market for good opportunities… Please, do yourself a favor and look at point 1.
  3. Lump sum is statistically advantageous if you do so at a random point in time. But it is likely that your interest in doing so did not come by at random. It is influenced by the present environment. That you even have this money saved up is probably influenced by the past environment. Your interest is not random, lump sum statistics probably do not apply. DCA has only slightly worse expected returns than lump sum and has a much reduced outcome volatility.
  4. Are you sure 100% allocation to risky and high-risk assets is right for you? I started like this too and was happy with it. But this can blow up in your face and be made even worse by your reaction.
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I am rather pro btc than fiat…but diversification across all assets is key

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You can put your assets in a company later. Companies don’t die, so no estate taxes. Taxes for companies are mostly lower anyway, and taking the money out for consumption or whatever is taxed at a reduced rate (in many places here for a total that is about the same or a bit more than if you owned directly). There is some administrative overhead though.

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I was planning to do this anyway, but still need to find out how all of this works. Any suggestions?

I’m planing to open an AG for investing with somewhat high leverage (x2.5) and probably shorting, but only somewhat thight rebalancing bands. No timing with any indicators for now (moving averages seem interesting, but I don’t understand it). It should shield me from “gewerbsmässiger Wertschriftenhandel” and the rest of my assets from being blown up by a black swan (given I can prove an acceptable level of risk management).

I’m on it for half a year now (I have a day job). I’m still not satisfied with my understanding of the strategy, and the finer legal conditions. It will probably take another half of a year.

There are some Swiss websites dedicated to help you with funding a “Startup”. I know it is possible for normal people, so not much research has gone into that aspect yet.

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There is also something like establishing a RAK ICC company….I am looking into this….still in the very beginnings…

I did look into off-shoring as well. Disadventageous tax treaties and market access, local administration overhead, lacking factual control, treatment of off-shore constructs by the Swiss taxman. I didn’t find anything useful at my net worth level.

For example: If I remember (or read) correctly, companies effectively managed from Switzerland will be considered Swiss.

In average, the best strategy is to invest today and never touch the money again. But the average includes both the super happy investor that bought right before things went up, and the super sad one that bought before worlds’ end. Unless you are a very seasoned investor (15+ years), I personally recommend to take a different approach.

Try to always smoothen your investments - the longer the smoothing period the better. The same applies when you somewhen change your asset-allocation or de-accumulate. This smoothing comes at the cost of reduced average return (given you invest later only; less “time in the market”) but it reduces the distribution of outcomes. You will never be supper lucky and you will never be supper sad. Sounds passive too, no?

Therefore, I strongly suggest to think about:

  • How much do you going forward invest Quarterly/Bi-Annually (after / not considering the one-off amount you can invest not / the 150k)
  • Think about a sensible asset allocation, aka how you spread your investment over asset classes. Never invest in one asset class only (neither Shares nor BTC) as one asset class can drop and not recover in a lifetime. Rule of thumb: Shares 30-70%; Real Estate/REIT/Swiss RE Funds: 10-30%, Cash/Bonds in strong currencies only: 10-50%, BTC <10% (personally i am at 0%), Gold <25% (personally I am at 0%)
  • Set-up regular investment of this Quarterly/Bi-Annual amount; This as long as you can/until you retire
  • Only then look at your additional one-off investment, and add it to your first 3-5 years of Quarterly/Bi-Annual investments
  • Once a year review if you can increase your regular investment amount. As well reduce it if you realize your cash-cushion is getting too small for you to sleep well at night. The asset allocation should stay for 10+ years - unless you realize you can’t sleep well at night; then reduce shares/BTC/real estate.

If you ever feel like changing/reducing your exposure; Think twice and return back to this Forum first. No tactical Buying, no tactical Selling, … unless you discussed this with someone else.

2 Likes

Once you have accumulated circa USD 10M wealth then US estate tax starts becoming a consideration. At that point you could sell VT and buy a non-US listed fund, if needed.

I believe you need to share the following info to get more meaningful strategy suggestions:

  1. Total assets split into 2 & 3 Pillar transfer, stocks, gold, cash, property…etc
  2. Age you want to achieve FI
  3. Planned living costs at retirement

Please dis-regard the below (unless you want to retire early? Didn’t see this mentioned). The only thing that trully matters is: How much do you think can you, after these 150k, invest every Quarter/Year.
The point is that we should invest each and every year - and not just do a one-off investment.

here we go, rough current figures:

  • 2rd pillar: 450k
  • 3rd pillar: 120k into VIAC ETF Global 100
  • Cash: 220k
  • Stocks: 0k
  • Property: 0k
  • BTC: 55k
  • Metals: 30k

Current savings rate per month: 1k free cash (conservative figure) + 600 for 3rd pillar
Age: 48

→ Strategy suggestions ?