Starting to invest big amount in ETF

Hi everybody

This my is first post and I would like to thank everybody for contributing to this forum. I have learned a lot about investing in last days.

I am a male expat (mid 30s) resident in Zürich. Recently, after passing away of my mother, I have inherited some money (around 150K CHF) and would like to invest this money for a long time (5-6 years). As my 3d säule is already being invested in Swiss Stock, I am thinking to invest 80 % of the inherited money in Vanguard VT ETF (through IB).

I was thinking to invest every two weeks something like 3K in this EFT. Given the current market and the likelihood that there is going be inflation and stock markt might drop, do you think that this is a reasonable pace and diversification? Do I need to invest more in tech-companies like Google & Microsoft?

Having this much cache in hand, do you think is there any better option at moment for investing? Since Switzerland may not be my last station, real state is out of the question.

Thanks a lot for your advice,

Time in the market over market timing. Lump sum usually wins. It‘ll drop eventually but you don‘t know when and if it drops lower than it is now.

I put in 100k in VT since the start of the year, always when the money became available or when I sold other stocks.

2 Likes

5 to 6 year time horizon is not really a long time for stock market investments. Likelyhood that you’re not making profit when investing <5 years is rather high.

Sounds great and the other 20% into Bitcoin :wink:

This is no investement advice, just what I would do…

6 Likes

This is hardly an intermediate term for stock investments.

If you look through this forum and FIRE blogs, you see this question with the same motivation been asked any moment in time last 12 years. Considering your time frame, maybe you should decide for a defensive asset allocation?
Another way too look at at - compare what you want to invest now with the sum that you will add to your investments until the retirement.

2 Likes

That’s 26 x 3’000 CHF = 78’000 a year. You’d be fully invested within less than 2 years.

If you are seriously concerned about inflation or a drop of the stock market, I’d likely spread it out over longer than that.

Also, if you like biweekly, you can do that. Monthly or quarterly would be enough IMO.

1 Like

Why do you say 5-6 years?

If you know for certain you will need the money then investing in stocks is quite risky for that time frame. On the other hand staying out of the market for this long will likely have a high opportunity cost.

Perhaps you could play with the Monte Carlo simulator to get an idea of the outcomes. I entered USD 150k invested in VT and it suggested 90% certainty to be worth more than this in 5 years time and 50th percentile result (after inflation) USD 237k. Past performance is no guarantee of future results but it gives you a second opinion. I would suggest to reduce USD results by a couple of % per year to estimate CHF

https://www.portfoliovisualizer.com/monte-carlo-simulation#analysisResults

3 Likes

I will put my experience (you can use to learn from my errors)

I have read about the Time in the market over market timing.
I’ve decided to invest every month 5k due to the uncertainty on the economy instead a lump-sum of 250k , just after the covid crash.

Result, Stocks have being going up the whole time and I could have now 50k UP&L instead of 6k :frowning:

Anyway, it was a relief for my wife that if it crash only a few k are lost and not the whole egg.

if the market crash I will do a lumpsum of all the money that I want to invest ifnot I will keep my strategy of 5 k per month, maybe increase it to 10k

if there is another crash I will

1 Like

It is - though biker369 didn’t explicitly say he needed the money (in full) after that.

It could have gone the other way.

If you had gone “all-in” and invested lump-sum in 1999 or 2000, you’d have waited 13 years for any substantial returns.

All I can say is that today’s exuberance and sense of invincibility in the markets feel quite similar to the turn of the millennium in many ways. Only… at much different interest rates.

1 Like

For a randomly choosen entry point that is certainly true. But people investing big for the first time don’t do so at a perfectly random time. I’d guess they often become aware after significant events: Strong rising markets or a perceived dip or inflation fears… etc.

5 Likes

Possibly not, because each month (I assume, no info up there if the OP still works) one would also have savings.
Which could amount to those same numbers (3k/month), so the absolute cash position would in fact stay the same, or even grow (while the relative one decreasing). :grin:

P.s. @biker369 Sorry for your loss.

2 Likes

What would you do if you mother already had VT and you inherited 1620 of it (~150k CHF). Would you sell it all and DCA back into the market or just leave it invested?

4 Likes

I would not do more than a buy per month, and would invest 60% in ETFS and 20% in aggregate bonds. I would spread the total sum for a timeline of 3-4 years with one monthly buy and during that time I would also buy with cash any 5% market drop. I would keep rest of 20% for these substantial market drops considering we are at all time highs. Chances are there will be drops coming period.

Hi . what aggregate bonds would you suggest? I am currently tracking these 2 ETFs: QLTA (A-rated Corporate Bonds) and VBILX (Intermediate -term bond index fund), to invest in what I would divest from a couple of equities I am too exposed to.

I ready people saying this a few years ago. How did it turn out for them?

True, and it turned out to grow more. But with a spread of 3 years instead of lump sum for me seems a bit better, reducing any potential risk even lower.

I think everyone should do it’s own research and choose accordingly… Personally, I am investing in these ones: Exchange-Traded Funds (ETFs) | iShares UK – BlackRock

DYOR. That is something that a lot of people say. But I do not agree.
I think that it is beneficial to discuss strategies with others. So someone can see a flaw in someone else’s allocation and this could lead to an interesting discussion and maybe improve the strategy. By reading about the strategies from others, you could also find ideas that you wouldn’t by doing your own reasearch.

5 Likes

Euro hedged Acc version?

2 Likes

Indeed if we’re talking about concrete portfolio allocation strategy based on type of markets, fund country etc. But here the topic was a bit different. Taking a ticker for granted and buying it it’s not safe without a context such as mid long term strategy, portfolio rebalancing, risk tolerance etc

1 Like

Hi @biker369,

I’ve been thinking what I’d do as I can be in a similar situation shortly.

150k CHF 80% = 120K CHF

  • 50k CHF lump sum in VT
  • 50K CHF spread over 3-4 months, not DCA but opportunistic buy, if no opportunities than ca. 10k month dumped in, no matter the price (similar as in the DCA case)
  • 20K CHF single stocks now
1 Like
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, vous confirmez avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/