Hi chaps and chapesses of Mustachian Post, very interesting site and forum you have here that I found quite by accident when Googling investment information relevant to Switzerland. I hope to be able to stock around and learn from you guys.
So, my story is that reaching my late 30’s I finally stopped buring my cash and saved a little money (a modest 50k) and decided to invest. I have been involved in and researching the technology industry all of my life, so this is an area where I feel comfortable exercising judgement and taking calculated risks with my money as I have a decent idea (within reason) what the future is going to look like and which companies are going to grow and dominate it.
As a Postfinance customer, I immediately looked at them for a trading account and opened one right up. After making an initial small “trial” investment I did more research and saw that there are cheaper options out there such as Cornertrader if you want to stay in CH, and IB if you want to hold your securities out of CH. However, in the end I have still decided to stick with PostFinance because:
- The interface is extremely easy to use.
- Transfers from my bank account to my e-trading account are instantaneous.
- I am not doing a high volume of transactions (aiming for longer-term holding), and they are all on SIX in CHF, so combined with the 90chf yearly rebate it’s actually not so much more than Cornertrader.ch. I do not do enough trades for making IB so worthwhile as yet.
So far results have been positive. I currently have three securities:
-Security 1 (15% of holdings): Up 16%
-Security 2 (25% of holdings): Up 11%
-Security 3 (60% of holdings): Up 2%
Security 1 was my “trial investment” and I was far too conservative with the amount I put into it before the price shot up. Still, no use crying over spilt milk. Security 2 is looking steady, and Security 3 is the one that is my “long-term big gains” investment that by 2020 should really see some significant returns.
As I have now invested all of my savings I am going to be aiming to put around 4k a month into further investments, so I need to assess whether Cornertrader is going to be better for me going forward or not.
I have to say, there is something incredibly satisfying about investing vs keeping your money in a bank, and I think as long as continue to keep a cool head on my shoulders, not let emotion cloud my judgement and choose my targets carefully I should achieve my aim of increasing my savings at a rate that is significantly above interest over the coming years.
So, in closing…
I am happy to hear any opinions or recommendations from you guys on how to maximise my efficiency as a low-volume (likely buying once a month or so) trader in Switzerland.
Hi, welcome to the Swiss Mustachians Club.
Here are my recommendations:
- Interactive Brokers.
- VT ETF or VTI ETF - depending on your cost/diversification preference.
Hello Engvestor and Welcome here!
As @1000000CHF said, we tend to advise Interactive Brokers more and more, first because of their lower trading fees, and secondly (and I think it is quite important to be stressed) because of their minimal currency conversion costs. As soon as you are buying securities or funds that are not quoting in CHF, it is worth it : IB charges only a few francs, whereas most brokers charge at least 0.5% for each currency conversion : so with your example of 50k, you would pay 250CHF when buying and 250 CHF when selling to most Swiss Brokers…
Hi guys, thanks for the replies and the welcomes.
- Is IB really worth it for such a low volume of trades as I am doing in CHF?
- This is something I see mentioned a lot but need to consider more carefully as I know nothing about it. What is the average return per year?
Thanks. Seems like i need to really sit down and work out the potential savings from using IB in my circumstances (low volume of trades on SIX in CHF).
I also need to factor in the 108chf cost of moving each position to another institution…
I’d recommend rather VTI (+mix it with some non US funds) - there’s less uncertainly concerning reimbursement of foreign taxes if they play the we’ll-treat your-fund-as-an-open-box card
Hi @Engvestor, welcome to the group and have a great start building wealth!
Why should they play this card actually?
With a volume of 50’000 chf you can expect the difference of a few hundred chf annually.
What kind of card is that? Can you tell more about it?
Tsx code technicalities. Depending on whether the fund has a legal personality under the swiss law, owning its shares may be treated for tax purposes as direct ownership of underlying securities in which case what you can get refunded may be restricted by the type and domicile of those securities. Withholding tax on US bonds for example wouldn’t be eliglble for reimbursement from the swiss then - the idea is that you could have claimed it off the IRS. I’m not an expert in this and don’t know how it’d interplay with fund distribution withholding, but with this possible technicality in mind it’s cleaner if you keep your fund’s contents uniform: same country and no mixed funds - go for pure equity or pure bond funds
Hey guys. Apologies for the long delay since replying I’ve been absent due to work. Basically I set up an account at Interactive Brokers as recommended and so far am a little disappointed with them. Basically not all of the stocks I trade on SIX are listed on the Interactive Brokers system. I have messaged their support to see if they have a solution, but if I have to do that for each one then it would not be workable.
Should I just be trading on NASDAQ instead? My account is in CHF so wasn’t sure if I would be affected by FX rates if I bought on NASDAQ in USD.
If your stock is traded on NASDAQ you should just buy it there. It’ll cost you much much more to buy it on SIX. FX conversion is not a problem with IB and is very cheap with them. The stock price itself should be about the same on both exchanges, any FX difference should get normally arbitraged away but likely you’ll pay some premium on the less liquid and more expensive exchange i.e. SIX