Interactive Brokers does declare it correctly. I send in the correct papers. But the software of Kanton Zurich insists that they took more withholding tax then they really did. In older versions one could correct it manually, but in the last few years one could not. I added it to the notes, but get a little tired of doing so. If they want to gift away money, probably billions, their problem.
The point is that the broker has to pay the withholding tax from lent out shares only to the USA if it is an U.S. stock. If it is a non-US stock they do not. And IB does not take it away and declares this situation correctly. But when you enter it in the automated online tax the withholding tax is calculated automatically, even if it was only charged partly or not at all.
And that is Interactive Brokers which declares the situation correctly. I’m not sure all banks do that. In this case the gifted Cum Ex money from the taxlady goes to the bank.
They seriously did ask for money back because my wife had an accident and was not eating at work for a few months, quiet sure that that was less than 20 CHF of tax difference. But then they don’t care for the billions they give away for no reason…
Now, this year I will use a CH tax service to do all the IB declaration and don’t care for this situation any longer.
P.S. it is actually not their problem but ours, as the tax money indeed is for everybody…
Oh yes, I don’t have much experience with options tough.
The volatility decay is the primary reason why I only moderately invest in LETFs (and LETPs), only after a crisis when the market is still low, made some good profits with 3gold and TQQQ this year
To come back to options, the further away the (D)ITM call is the lower the leverage is… so with DITM i can have 3x leverage and I can only loose 100% of my investment with unlimited potential earnings. That sounds good but I’m not sure of the risks… Since i’m the call buyer I choose to exercise it or not… so even if it’s an OTM call as long as i don’t exercise it i’ll only loose the premium… ? There might be extended volatility when reaching the expiration of the option and … that’s it ?
It’s definitely an investment I should be more interested in. Any book or course i should check ?
Anyways sorry to insist but, what if I finance those DITM with a consumer credit ? The leverages will multiply and the credit will help dealing with the chunkyness … Why do you say it’s “strictly better” ? They still are two different tools. Now of course please do not take 80k consumer credit if you only make 40k a year … but taking 40k credit if you make 80k a year does not look crazy to me (if you are optimistic and think you can outperform the interest rate and they range from 5 to 12 so … carefull)
Most of the guys here say that there are probably cheaper/better options you should explore first.
If they do not apply to your specific situation/character then most/all(?) recommend to not do it as the chances of outperforming consistently a 6% interest rate is very low.
Of course if you see it as a gamble then it is another story. Probably you should consider other options as well (casino, lottery, …)
To OPs credit, casino & lottery will on average yield a negative return. Stock market (in the past) gave on average a positive return.
Now there are options to get an edge over the house/casino with blackjack. But I hope OP doesn’t consider a consumer loan to do this.*
* and the edge here is anyway lower than 6% (more like 0.5%) which makes it impossible
However sometimes it’s “worth” playing the lotery as the bonus gets higher and higher. At some point (very rarely) the weighted expected return exceeds the price per play … that would be fun
Also this is incorrect :
we are talking about 6% yearly vs 0.5% per play (on average) statistically you could make your yearly interest in one week if the casinos don’t kick you out too quickly … but i’m not autistic enough to play that game.
Heyyyy my cue to relate how me and a friend made £300 in roulette and proceeded to blow it on steaks, cocktails and strippers the same night. We probably had spent more than that (was sort of a monthly thing, pool £20 each, never withdraw more money, leave whenever one says they want to leave) but that one occasion, and the faces you see in seedy third class London casinos are priceless. Also casinos had, at the time, an unlimited buffet and soft drinks policy, so also cater to cheapsk…mustachians.
Here’s a small table I did according the some ETFs available on VIAC, I made in on June this summer and the only comparable performance was the 5 years one (10 years not available for every ETF in this table)
Colonne 1
Colonne 2
Colonne 3
Colonne 4
E
Factsheet
VIAC
devise
perf 5 ans (devise) date 06.2025
Perf 5 ans CHF date 06.2025
Japan pension
Jpana pension
JPY
15.64
5.41
MSCI IMI
MSCI IMI
CHF
8.68
8.68
NSL I-X
UBS SMI
CHF
7.91
7.91
Swisscanto World ex CH hedged - IPF
CHF
11.94
11.94
UBS Global quality dividen
UBS Global quality dividen
USD
13.88
10.57
UBS SLI
UBS SLI
CHF
9.71
9.71
UBS wrld ex CH small cap hedged - pension fund
UBS (CH) Index Fund 3 - Equities World ex CH Small NSL Multi Investor (CHF hedged) I-B-acc
CHF
9.02
9.02
wrld ex ch hedged PF
CH NSL CHF hedged I-X-acc
CHF
11.99
11.99
wrld ex ch PF
CH NSL I-X-acc
CHF
11.26
11.26
EDIT : Sorry guys i’m not so good with forum tools. First row is the header. First colum is name on factsheet and second colum is “name in VIAC”, third column is currency, 4th is performance in native currency and 5th is performance in CHF.
5th column was calculated as follows : I change 100CHF to currency in june 2020, I invest in the fund and withdraw it in june 2025. I convert the total in CHF and calculate the annualised perfomances.
Anyways, most of them are in CHF by default… and one can find many more…
Past performance is no indication of future performance.
Maybe tomorrow starts the biggest bull run known to mankind, maybe we will have 20 years flat markets, maybe we have a huge crash that won’t recover within 10 years, no one knows.
Now I understand your optimism—and your “stubbornness”—regarding the consumer loan better. If those returns were to repeat over the next 5–10 years, I would also have taken a personal loan with an even higher interest rate . You’re extrapolating into the future during one of the biggest and longest bull markets ever. Unfortunately, it doesn’t work that way.
You should expect a long‑term average market return of roughly 5 % plus inflation. In fact, even that seems quite high given today’s extremely elevated valuations.
I know, I just shared this file because it was the only data available for all the ETFs shared. Of course if you take the 20 years average the story will be different.
Then when it comes to :
Even tough I totally agree and we can’t know what the future is made of let me ask you a question.
Is itmore likely that the outcome ressembles the past outcome or will it totally differ ? Even tough there is no right or wrong answer having a very negative difference on the long term will either mean a huge societal change or mean that another emerging asset class is more profitable and that people let down stocks and ETFs.
I personnaly don’t see it coming in the next five years and I assume the results will be similar +/- 2%. That’s a bold assumption but as we don’t have any accurate forecast tool … i’m willing to take the risk.
Well … inflation is playing in my team, 1000chf 2 years ago would be worth 1032.23 CHF today (inflation 2023 : 2.1% and 2024 1.1%) so it actually reduces my interest rates.
Correct markets do have an high valuation today but when you say that : to which indicators do you refer ? I would refer to the P/E ratio. Now SP500 is above 30 (that means 30 years to make the income that would fully pay back your share).
However, do you know another asset class with better P/E ratio and less/similar risk ? Real estate is nowhere close, bonds forget it, crypto … i’m not throwing a consumer loan into that ! All gambler that I might be.
So as long as it’s the “best” asset class, people will keep supporting this system and we’ll eventually recover from huge crisis … my take, i’m no macroecoomical expert tough.
Nice study ! At the time I took what I had available but you are definitely right.
Now as the best mathematical approximation of worldwide markets is an exponential (and not linear) and all our economy is growth based, it’s likely that data from 20 years ago aren’t relevent anymore… aren’t they ?
EDIT : Just realised that last part is b.s 5.5% a year every year is already exponential. So data from 20 years ago is more relevant as it may appear.
Maybe, maybe not. What’s your basis for these assumptions? What makes you sure that a crisis like the dotcom bubble is not around the corner?
That would be deflation. An annual inflation of 2.1% means that the CHF 1’000 from a year ago can buy you stuff worth CHF 979 today, your money loses (not gains) value with inflation.
You may have stumbled upon the paradox: past performance of different asset classes is most of what passive investors have to go on, and yet “past performance does not guarantee future results” is plastered everywhere, right? Well, this isn’t Schroedinger’s stocks, both are right at the same time.
That’s another problem we are confronted with when trying to assess what is relevant or not.
Too short past time series do not show all investing environments and may be too favourable or disfavourable to represent what might happen in our investing career.
Too long may have us use time periods with fundamentally different investing universes that may no more apply. Broad access to investing solutions, including highly leveraged derivatives, with near instant orders without having to call a broker and central banks have changed things. How relevant is 1900 data? Probably not 100% anymore but potentially still a bit.
To note, the Pictet study only takes into consideration Swiss assets. That’s probably not what most of us invest in. Broader studies are required to properly assess the past behavior of global equities.
I try to remind myself that my investing career is probably only a 40 years window now, with at least 20 of that in the decumulation phase. Broader time series is not what I will get to live, I’ll just live 2 more independent 20 years time series now, which is not statistically relevant. Studies using rolling returns for 5 - 10 - 20 years or whatever time horizon I’m considering are more relevant to me than a single broad Compounded Annual Growth Rate (CAGR) on a longer period of time.
A good tool, albeit not yet in CHF and with data only from 1970 onward, is Lazy Portfolio’s rolling returns, which gives a maximum, a minimum and the median for rollling periods from 1 to 20 years for various portfolios. Example with 100% global stocks in USD: All Country World Stocks Portfolio: Rolling Returns
Yes, if you don’t exercise, you will just get nothing. The option will cease to exist. But how it really goes down is dependent on your broker and the specifics of your options. E.g. index options are often European style and cash settled.
Then you likely pay more for the final leverage than you would have to. Just go closer to ATM, the insane excess financing of a consumer loan will likely still be more expensive.
Because it is the same or better in all aspects.
The excess financing is less
You can buy the same strike every year to get an equivalent absolute exposure as with a five year consumer loan.
Losses are capped, you can not owe more than you paid.
The exceptions to this (where it is not strictly better) are outlandish and unlikely.
5 years cannot inform relatively static long-term allocations. Data from further back shows that a 5 year rolling window jumps all over the place.
testfol.io is a good tool to play around with allocations. Returns are in USD. Doesn’t matter too much if you only want to compare the relative return of portfolios.
The question is not, where to invest money from a consumer loan but if it makes sense at all to take a consumer loan to invest. And the answer - as written multiple times, from many mustachians here - is NO.
The expectation is that a global market portfolio will eventually recover from any crisis. That’s the case at least for the last 150 years.
But again, you are missing the point. Taking a loan with 6% interest to invest in the stock market with roughly the same long term, on average expected return, doesn’t make sense. You are taking an uncompensated risk.
The situation has to be compared with the worst, not the best. Step back and check what for consumer credits are used normally: to consume. The money is gone and the debtor pays it back over time, wins some time with his/her favorite toy.
Now our OP did not do that. But he gains time, time in the market, time of experience and statistically even money. He has no way of getting a cheaper credit and decided to invest anyhow.
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. You’re extrapolating into the future during one of the biggest and longest bull markets ever. Unfortunately, it doesn’t work that way.