Starting Investing (having 100k in cash) --> 100k in VT?

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1

Dear experts,
I opened a IB account and now im ready to invest…im 30 and want to invest in the longterm (10-20years).

I thought about buying 100k VT.
And afterwards invest in VTI (Every month about 2-3k)
Any other advise?

Or do I miss something?

(I read about the 60k limit with regards the heirs, but I think they can handle that issue ;-)).

3

Thank you very much for your quick answer :smiley:

total networth 165k
105k cash
50k deposit
6k 3a → will transfer it in the next weeks to VIAC

goal: 50% savings rate = 2k, maybe I can go up to 3k per month
no kids or wife
my goal fire in 11years
you are right, investing for 30 years :smiley:

ok, so invest all in VT…I just thought maybe if I buy other ETFs then I would have a more balanced portfolio :smiley:

4

VT is already market cap-balanced, total world market (60-ish % US).
VTI is only US total market - so if you buy that additionally you will continue to overweight US as compared to the global market cap.

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5

thank you dbu, is there any other ETF, that would help me, that I dont overweight the US market?

6

There is no one-to-rule-them-all response here.

But if you don’t have yourself a valid reason to overweight anything - differently to market cap, just stick with buying VT (until you do, if ever :slight_smile:).

I hold a combination of VTI+VEA+VWO, but probably just for a “feeling” of more control when rebalancing, and thinking of overweighting EM (VWO) a bit.

8

Instead of overweighting the same big Chinese stocks (EM), I’d recommend adding Chinese A-Shares (internal market shares) that are not included in VT for regulatory reasons. This will complement the global market-cap.

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9

For such an amount I’d try to understand what I am investing in, not dump it into a black box and hope for the best. For instance for an ETF, what are the key metrics? What are the companies invested in? What is the credit quality of those companies?

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10

For Chinese companies there’s no reliable source of data. So you have to take that risk into account.

And even if there were, I don’t believe anybody on this forum could leverage that information to beat the index long-term. Otherwise, you wouldn’t be on forum for poor amateurs.

11

Note that if it is 100k CHF on your account, you are actually already invested in a stock ETF (currently, for 20k).
For instance, if you browse the institutional investor list for TSLA, you’ll find Vanguard (for VT, VTI, …) and a bit after, the Swiss National Bank. Same for Facebook and others.

So, basically you don’t need the trouble of choosing an online broker and so on. Cool, isn’t it :smiley: ?

12

How do you reckon that should work? The assets on SNB’s balance sheet are not your assets. The 100k CHF on your bank account is not the same that the SNB has invested, is it? And why the 100k threshold? I’m very interested to understand what you mean to say.

Here is the SNB balance sheet. If I understand your logic correctly:

  1. You deposit 100k at your retail bank
  2. The retail bank deposits it at SNB (480 billion CHF deposited in total EOY 2018)
  3. SNB buys with it 70% bonds and 20% stocks (763 billion CHF foreign investments EOY 2018)
  4. Your 100k is now in the hands of the entities who sold the bonds and shares. It increases the supply of CHF and effectively lowers the buying power of the CHF and it’s exchange rate to foreign currencies. This “helps” the exports but it screws the imports and any foreign currency purchases that private holders of CHF may make.

You’re clearly joking, right? Sure, the SNB is heavily invested in bonds and a bit in stocks, but they’re the ones to profit from any appreciation of these assets, not you, right? What will happen with any profit they make once they sell these investments? Will they use it to buy off all the CHF from the market to reappreciate its value? Or will they pass on these returns to the country’s budget?

13

Even if it is - and you could somehow argue that it is - they simple fact remains:

You would be paid almost zero interest on it. :grin:

So the “investment” is pretty lopsided.
And everything else is secondary factors.

14

But you could argue, that with the return that they make on these stocks/bonds, they could buy out more CHF from the market than they initially supplied, thus raising the value of your money. The question is, what will they do with eventual returns and how will they cover potential losses? AFAIK the current strategy is to weaken the CHF, to keep the economy competitive. At least thats the official line.

15

Well, it sounds like a joke but it is not my joke - basically the whole financial world is a joke since the central banks have begun to freeze the 2008 crisis with some success (in terms of stability) until recently at least, by cancelling interest payments with zero or negative rates. In a nutshell, you are already invested in US shares and EUR bonds through your 2nd and 3rd pillars. The SNB (your CHF’s) profits from any appreciation (they pass some profits to the cantons), but also from any depreciation. They warned already a few years ago that they may have a negative capital at some point in the future.