Strategy to start 2021?

Hi there,

Not sure it’s the correct section…
I have a couple of questions regarding the immediate strategy I’m thinking of, to be able to start 2021 on a correct foundation. If you want to know more about how far out I’m starting : Mustachians, introduce yourselves! :slight_smile:

I have several products with SwissLifeSelect/Generalli that I don’t like and I’m thinking about moving out of it.

  • A 3a in bank UVZH, Signed this through Swisslife Select. Claim 100% in BGV funds but have a really poor performance (around 1.02% this year) and steal me 2% on every deposit I make…The advisor argument is that’s “it’s to manage to portfolio, if something bad happen they can switch things and you are not at a loss”

  • A 3a Generali life insurance that is an absolute scam as all of that kind. I already have around 4k invested this year that I will use for taxe reduction, but probably loose everything when I close it or if I stop paying.

  • A placement fund that has the same 2% fees of every deposit I made… also from swisslife select…

  • A 2nd pillar “libre-passage”, also via Swisslife Select. Not sure about the quality of this product yet, don’t have digged enough yet.

So my questions are :

  • For the 3a, is it worth it to put everything with finpension, assume the sunkcost and move on? Can I complete in finpension before the end of the year to cover the rest of the deductible 3a, and then try to salvage the rest in 2021? For what I read it seems that finpension is now better than VIAC so…?

  • For the investement part, I’m not confident enough in myself to start investing in EFT yet. Need to learn more first. Is a robo-advisor like Selma is worth it in the meantime for my 4k that are on the bad fund yet?

I hope those questions make sense… :-/

Run away

Probably run away…but i have no experience about this subject, let’s see what others say.

Do you work? If yes you should transfer it to your pension fund (some here would say could leave it out of your pension fund and invest it in 2a stocks portfolio via viac for exemple… i think you should stay safe here and just put it in the pension .)

Between viac and finpension there is not that much of a difference, i think fp is better if you want to fine tune (create your own portfolio). As a novice, i would recommend you to chose a standard portfolio according to your risk tolerance (global 80 maybe?).
Yes you can and should invest the max amount before end of 2020 and again the max as soon as possible in 2021.

You are absolutely right! Read some more, see how you react with the up/down of your soon to be 3a portfolio. Then invest (but not with selma…).

Some stuffs to read /watch:

  • Ben Felix on youtube: watch them all and you will know more than you need! And you will kind of fall in love with Ben’s eloquence :heart_eyes:
  • The bogleheads books by T. Larimore: it is USA intended but you will learn the basics about Bogle’s strategy
  • if you want more: https://www.bogleheads.org/
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I had to Lol at the " :heart_eyes: ", I have thought a few times, “damn he brings this “dry topic” of investing & finance theory across in such an interesting, dynamic and somehow sexy-attractive way, imagine when he is flirting in such a way, I’m sure he gets all the girls/boys (acc. to what he prefers)”. (A good example of a young guy, sexy even without hair :wink: )

Since you can open the account in-app immediately, you should easily be able to pay in before the end of the year.

Honestly, I’m not quite getting that. You are a project manager in IT. ETFs aren’t rocket science. EU ones are relatively strictly regulated (for personal investors), as are the well-known European brokers.

You can’t really make a great (avoidable) mistake by

  1. picking a trustworthy bank and/or broker. Could probably even be a French one, if you’re more familiar with them
  2. picking one of the UCITS ETFs available, from a reputable provider, such as iShares, Vanguard, Xtrackers, Lyxor. If you look at of the biggest in terms of volume, should be MSCI World.
  3. briefly checking costs and if Swiss tax figures are registered in ictax database.

…and just buying it. Or even set up a regular (monthly) investment plan.

Oh, and 95% of the discussion you are going to read on this forum about expense ratios and withholding taxes is just wanking off on microptimising and shaving off on tenth of a percentage point in costs.

Well, aren’t you basically delegating responsibility and the possibility of making mistakes to a third party
…again? Just as you did to the commission chasers from SwissLife Select.

I looked up their web site and from a quick glance, what I’m seeing is a big promise of “You pay us to know what’s best for you and your life - and we’ll handle everything for you”.

Sure, at a flat fee of 0.68% annually, it can’t be as bad as the crap SwissLife Select sold you. Or can it? Well, depends on the products they’re going to sell you. As for those… maybe it’s just me but from looking at their web site, I am having a really, really hard time finding out what products they’ll actually make you invest in, beyond paying their own fees.

So might the nice chap (or pretty lass) from SwissLife Select.

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Hi Zurtan and welcome !

Your mind seems to be in the right place, dive in and keep learning.

Don’t forget to assess your risk tolerance, that is your need, willingness and ability to take risk.

At this stage of your journey, your need to take risk might be high (you need the stocks returns to make up for the missed opportunities in your earlier life).

The willingness is the part that allows you to hold firm in a downturn even as though you see the paper worth of your assets melt down. The 2008 crisis is a good example to look into: modern enough that there are forum documentations of the time, and long and demoralizing enough that some people vowed never to get into stocks again. The market has way, way, worse things in store than the drop followed by a quick recovery that we’ve had earlier this year.

The ability is the part that means you won’t have to sell assets in a downturn to cover life expenses. Good parameters to check are the perceived safety of your job, the needs of your dependents, your time horizon, your coverage in case of hardship (insurances regarding job loss, disability, death - your pension coverage is usually enough, unless one of your relative has special needs) and your level of expenses (the lower it is, the easier it is to survive hard times). This applies to both yours and your wife’s situation.

Since you’re reading a lot and should learn quickly about your desired way of investing, I’d choose a broker and invest into something of a 60/40 (stocks/“bonds”) fund for a start, then switch it for something more aggressive if you think that suits you more. Depending on your personality, diving right in on a 100% world stock portfolio might still be the good option, you know yourself better than we know you.

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This advice in its simplicity is really good. Just buy something with a small amount and suddenly the mystery goes away. It’s not the end of the world if the first ETF pick turns out to be sub-optimal. You can always close the position and buy something else. No strings attached with the already mentioned products. Ultimately, you will find the ones you will want to commit to.

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Thanks everyone for your really good advices. I will take that into account and keep you posted.

After a check, my 2nd pillar is also at UVZH, with lot of hidden fees. I’m starting a new job tomorrow at a big medical company, so I’ll move my money in their pension. They have better return, less fees, and I hope I’ll stay long enough in this company… When I signed my contract I signed for the higher option into the pension, now I’m starting to think that it would be better to have a higher salary and invest this extra-money…

I’ll start reading the bogleheads books now!

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Ben is truly the George Clooney of the investing world. He is attractive, intelligent, charming, passionate.

@Zurtan
Don’t waste your time and money on 2nd best solutions like Selma. Just educate yourself till you are an “expert” in passive investing.

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Quick update since the last post :

  • being more some serious with YNAB I have know a pretty good view on my budget and goals. First rolling month is encouraging.
  • watched a lot of Ben’s videos, really interested and well made
  • read half the first boglehads book, great read as well
  • Neon + Zak ready (already an heavy Revolut user for a couple of years now), will close my BCN account before the end of the year
  • finpension account open, I will put the around 1.8k CHF missing to top this year, at the 100% strategy. It’s the amount of money I was supposed to spend in the scammy generali life insurance and crappy 3a at UZVH…
  • Degiro account opened. I’ll probably move before the end of the year my fund in UZVH (a bit less than 5k) + 5.8k from revolut vaults that are just sitting there. I plan to go 55-15-30 in VWRL/SMMCHA/CSBGC7 for now but I want to finish the first book first to be able to really understand everything better.

I think that’s all for now… My initial calculation are quite pessimistics to be able to retire before 65, but at the bare minimum I will have a more confortable cushion and overview on my financial capacity going forward.

Thanks a lot to this great community :wink: I guess I will continue to be active around here for some time!

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Congrats on the good start!
You are set up for a brighter 2021. :slight_smile:

May I ask why you decided for going 30% of your investable assets (or a bit less, since you have parts in 3rd pillar too) into bonds?
I understand it might be aligned with your risk appetite.
Just keep in mind that some of us are “counting” the 2nd pillar to be bond-like (and at 25% of my NW that’s already enough, or even a bit high, for me :grin:)

Thank you! That’s a good point. I’m still working on identify exactly that %. 2nd pillar usage confused me a bit but the fact that you talked about it as a % of the NW make sense and I understand better now!

I still need a couple of weeks to be more comfortable with all that before making the payements I guess…

Edit : that would mean that as of today my 2nd pillar is 54% of my NW… so I may want to put more into stocks indeed.

In case you guys are curious, here’s the detail of the allocation for the “actively managed fund” where they charge my 2% of any deposit and an annual fee in addition for the management…

Can I also add my thoughts about starting afresh in 2021?

I own a bunch of horribly expensive active funds that I intend to clear out in 2021.
I work in IT and I’d like to build a tech-and-pharma heavy portfolio - or let’s put it this way, I don’t mind if it’s leaning that way.

For equities accounts

  • cash out bad funds
  • buy a certain mix of active funds: Fundsmith, SSON, Baille Gifford Global Discovery, AARK (total 50%) - anything else?
  • buy a certain mix of passive funds: tracking the SP500 and NASDAQ100 (total 50%) - anything else?

As for my 3a accounts:

  • Raiffeisen Pension Funds --> finpension mix of 80% MSCI Quality-tracking fund, 10% CH Blue and 10% CH Mid-Cap
  • Postfinance75 --> will probably stay this way as it’s convenient for now

Other stuff:

  • I got a pretty high real estate exposure (about 4x the size of the above stock-based stuff), so that can stay out of the complete portfolio. It’s a safety net for a financial meltdown.

I’m aware of the MP funds list, but haven’t done my homework yet, so bear with me… If some of you are in the same position and has already made a setup I’d love to compare or think aloud about our options.

You might want to consider some EM in there with FEET for example, as you are already seem to like Fundsmith active funds :wink:

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FEET has long trailed broader emerging markets Indices (FTSE, MSCI), largely due avoiding China (though Terry Smith repeatedly stated a reason to do so).

I think it’s quite nice feature if I may call it so that FEET overweights other countries such as India instead of China because most of EM ETFs nearly always overweight China. Of course China is not to neglect but if someone looks for another approach in EM then FEET might be a nice alternative.

If you take a look at tradingview.com and compare FEET with VWO one can see that FEET’s performance beats VWO nicely over a period of 1y and over a period of 5y they show the same performance.

What would you suggest instead of FEET? I mean VWO also looks great and has a very low TER so VWO would be for sure a good plus.

Do you guys know an investment vehicle where I could set up a certain split and just keep paying in amounts and the vehicle would split the money across all products? I’ve seen some in CH but they take up to 0.5% fees per year which I find quite high
(alternative: I can buy ETF’s on IB whenever the opportunity shows itself.)

Me too. I am deliberately trying to diversify country exposure by underweighting China and overweighting the rest. I’m generally a believer in equal-weighting - but that’s difficult (or not sensible) in emerging markets, due to their varying degrees of investability.

Lyxor launched an ex-China Emerging Markets ETF - though that contains 20+% for Taiwan and South Korea. And especially with the latter, it’s questionable whether it should be considered an emerging market at all. Also, 10% for one company (TSMC) and another 7 for Samsung.

I have a position in FEET. Has been a one time investment.
I am regularly investing (with ETF savings plans) in

  • CEMG (similar share of chinese companies to MSCI EM, though not strictly consisting of companies located in EM markets)
  • and few EM country ETFs (just a few CHF each monthly)

Regular investment plans at any of the big-name German brokers.
DKB, comdirect, Consorsbank, smartbroker, flatex.
No yearly fees usually.

It’s what I’ve set up for family members.
Who are generally uninterested in investing and prefer to keep playing it very “safe” by keeping 90% or so of their investable assets in a deposit account at the bank, at 0.0x% interest. And rather lose to inflation (though as that happens kind of silently and invisible, they hardly seem to be bothered, if they even can grasp the concept the concept).

“I can only invest a 100€ or 200€ from my monthly income, couldn’t I?”

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thanks - I’d be a bit more relaxed if any of these were in Switzerland.

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