Mustachian portfolios

#243

Or you may just as well miss out on all the gains as could never be as low as today. In other words - don’t time the market.

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#244

@wapiti I am not sure I fully understand why you recommended the IE fund instead of the US fund. It was my understanding that for a US domiciled fund L1WT is ‘0%’, there is 30% L2WT withholding tax, but you can file a W8BEN form to reduce withholding tax to 15% and then using DA-1 the remaining 15% would be credited for overall income taxation. In contrast, with the IE fund L2WT is ‘0%’ but one will have to pay 15% L1TW. So I don’t understand how the IE fund is better from a tax perspective?
Thanks for your feedback.

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#245

Hi everyone,

here is my position, and I would love to hear about your thoughts on my plans.
30 y/o, single.

I finally opened an account at IB.
I plan to dump around 30k initially, then add 2-3k CHF every 2 months or so.

Regarding the structure, my thoughts were with:

  • 50% VTI - 0.04% TER (US total)
  • 40% VEA - 0.07% TER (ex-US developed)
  • 10% VWO - 0.14% TER (emerging)

In addition to that, I currently own:

  • Novartis shares - currently cca 18k (will grow depending on how much longer I stay with the company)
  • 3rd pillar - moving to VIAC 80% Global fund - currently cca 17k
    (so pretty well covered for CH market I’d say)

I don’t think I will put any more money into these two for now.

Any useful feedback more than welcome!

Thank you,
D


Thanks for adding to my contemplation, I was thinking to opt for full cash this year instead of stocks / 50-50 split.
As I believe it doesn’t really help the “diversification” principle.
And of course throw that into IB. :slight_smile:

Cheers!

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#246

Perfect, IMO.
If I were you, I’d reduce the stake at Novartis.

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#248

Based on the low amount and the weighting you have chosen, I would propose the other option to buy only the VT ETF:
-No rebalancing needed
-Easier for taxes at the end of the year
-Only one transaction needed each month instead of 3

However, the TER will be a little higher 0.1 instead of 0.062, this will be compensated by the number of transactions

Sell the Novartis shares
Choose 100% in VIAC instead of 80%

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#249

I bought a total of 3000 CHF in a mix of VTI+VEA+VWO last month. Spend a total of 1$ in fees at IB. Can’t be bothered to calculate the invested amount where the TER difference will exceed this cost, but I recon it’s pretty low!

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#250

Hi,
I am investing for the first time. After doing quite a bit of research, the short list which I have settled on is the following:

  • VTI (40%)
  • VB (10%)
  • VEA (in the range 25%-30%)
  • VSS (10%)
  • VWO (in the range 15%-10%)

I intend to open an account in IB and buy all the ETFs there.

I hope to reach FI asap, and at least within 10 years.

I would very much appreciate your thoughts on my intended portfolio.

Thank you.

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#251

Thanks for your comment, wapiti.

In which way is it easier regarding taxation if I own shares in 1 vs 3 Vanguard funds?

I actually kind of like the idea of being able to easily adjust the proportions; although perhaps not for the correct reasons. :slight_smile:

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#252

When you will need to prepare your tax declaration you will have only to fill 16 (12 buys, 4 dividends) lines instead of 48.

At the end, I woudn’t bother too much. Both options are good.

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#253

@all, 2 more questions:

  1. Reading a bit more around, and with the interest of reducing effort with (de)taxation:
    Would it make sense to purchase funds for points 2 and 3 which are not traded on ARCA? (developed ex-US and emerging markets)
    I see the 2 I mentioned are labelled with FTSE, but the ticker I got within IB app tells me they are “ARCA-based”.
    Did I get something wrong?
    Are the TERs somewhat higher if the funds are traded at other stock exchanges?
    Should I identify different tickers/funds for this purpose? :slight_smile:

  2. Do you think the weightings above make sense, or should I somehow adjust (for a non-US resident)?

Many thanks,
D

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#254

How do you do it? when I buy multiple tickers I am getting 1$ fee for each. Is there a function I could not yet discover there :)? Would save me some fees…

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#255

You need to activate tier fees (instead of fixed fees)

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#256

Any advise also for the 10 CHF min value per transaction in the Swiss market? :slight_smile:

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#257

Never tried but it should also be lower with tiered fees: https://www.interactivebrokers.co.uk/en/index.php?f=39753&p=stocks2

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#258

It’s approx. 1.5-2 CHF in Tiered fee structure.

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#259

hello fellow swiss domiciled mustachians!

Unfortunately I only read in this forum every now and then, as somehow my heart does not want to prioritize investment, even though my brain says it’s top priority :slight_smile:
(http://theawkwardyeti.com/chapter/heart-and-brain-2/)

We opened 1y ago an account with truewealth to keep things simple, but only ever transferred 10k. We also have an IB account, and some money invested, without a clear portfolio strategy yet. My wife is not really good with numbers, so, while she has her reservations, she trust me in general with all the investment stuff.
We are both above 35y and unfortunately have not saved tons of cash nor are we super duper high earners (atm about 150k combined income), but i really don’t like the thought of investing in low yielding bonds, just to hedge out some risk. I think since we start so late, we kinda have to go a bit risky to catch up and thus I tend more to nugget’s all stocks PF.

My portfolio idea would be the following:
20% VTI (US total stock market)
15% VB or VBR (US small caps, not sure what the difference between those two really is)
20% VXUS (non-US total stock market)
15% VWO (emerging markets)
30% variable investment

that’s more or less 40% all world, sprinkled with some 30% bias on US small caps and EM.
the last 30% i would not like to clearly define, though I plan to have at least 10% US and 10% non-US in it, so I can keep a roughly 50% US and 50% non-US weighted PF.

Something like parts VUG (growth, large caps US), VEA (non-US developed markets) or VSS (non-US small caps).

Am I correct in the assumption that any ETF that I find on vanguard**.com** has the beneficial tax rules as they’re all US-based?

What do you guys think of my portfolio allocation, does it make sense in your eyes?

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#261

[quote=“dps_kane, post:259, topic:108”]
Am I correct in the assumption that any ETF that I find on vanguard**.com** has the beneficial tax rules as they’re all US-based?[/quote]
While they might be US-based, that doesn’t necessarily imply their tax structure to be very beneficial.

When (the ETF is) investing in non-US securities, it can also depend on the taxation agreements between the US and the third-party country in which dividend income arises.

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#262

The better indication as to the domicile country of an ETF is the country abbreviation in the ETF ISIN, first 2 letters, US, IE, CH etc.
As San Fran said beneficial depends on what the ETF contains.

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#263

Hello Mustachians. I have been reading quite a bit to get a better understanding on proper long-term investment. For that, I have been reading these boards a lot as well as the nice blog portfoliocharts, which I found on this board.

From what I read here, a lot of Mustachians go 100% stocks. Sometimes a bit of bonds is added as suggested by the Bogleheads with e.g. the three-fund porfolio. From what I see/read, stocks is what give the highest long-term average returns so it would make sense to go full stock of almost full. However, after ready a lot portfoliocharts and the various graphs, it seems that while total stock has the highest long term average returns, it is not the case if CARGR is used instead, which is what one would get in the end (please correct me if I got that wrong).

So if I look at the following chart: https://portfoliocharts.com/portfolio/risk-and-return/

The portfolio with the highest long-term return would then be his Pinwheel one and the total stock one is the lowest one (although still highest for average return).

Therefore, what would be your reason to not go with another portfolio which would “historically” had more return and les risk:

-Those portfolios use historical data so you cannot really use them to invest today.
-Total stock (maybe mixed with bonds in a three-fund porfolio) will grow anyway in the long run and does not need much micromanagement so why bother?
-Other?

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#264

I guess any strategy is good as long as it works.

Below is an example of a very simple active, market timing strategy.

Initial investment of 10000 USD, 1000 USD monthly contribution and an active “trigger” of 200 day MACD (10 months) to switch between VFINX (Vanguard SP500) and VFITX (Intermediate Term Treasury Bonds).

https://bit.ly/2IGnzvV

Returns are better and volatility significantly lower (-18% worst drawdown) with the Timing Portfolio and the criteria are very simple.

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