But that is irresepective of the rate you get at a bank for a mortgage. You take out the mortgage anyway.
Compounding here probably assumes you will use the loan for your downpayment (right @Compounding ? Not full on buying, otherwise my point is rather moot of course). And your downpayment at the bank gets you nothing (except house price appreciation).
So what we analyze here: is it worth it instead of paying the downpayment via cash, do so by taking a margin loan?
And the answer is yes on average I would say, as your portfolio earns more than the loan interest + house price appreciation.
But probably not so much more. If we assume 6%-7% CHF average return, benchmark + 1-1.5% and 2-3% house price appreciation.
I’d say taking a margin loan to finance a downpayment is a matter of asset allocation. It allows for a more agressive allocation for those for whom it makes sense but many people could be better served by a more conservative allocation than a heavily leveraged, stocks/single real estate asset heavy one.
Sweet summer child
What you’re actually holding are a set of emails. For almost everything else, you are depending on your counterparty’s own internal processes and congruent legal systems.
Fraud is quite a big thing already. But there are more fun ways to lose money! See Synapse for an example.
TL;DR: Synapse’s IT is defunct and the bankruptcy estate cannot figure which customer owns which part of the various omnibus accounts. I suggest reading the article not just the TL;DR, it’s quite amusing and instructive also.
If we exclude both fraud and incompetence… Well the world would be a lot better already. Unfortunately, there would still be ways to lose money. Just less fun ones. For example you may have (knowingly or not, due to settlement delays) used margin in which case you are no longer eligible for many of the protections that IBKR claims to offer.
So just we are clear
You are saying ViAC is more safe to keep assets versus Finpension, IBKR, Swissquote, Degiro & Saxo because how VIAC handle assets.
I am not competent to understand the segregation, custodian banks etc. but I would be very surprised if that is accurate representation of reality.
Mostly yes. I have not compared eg: Swissquote VS VIAC.
Generally speaking I expect that an account held under my name at a known bank in well-regulated country will be safer than shared accounts at unnamed “financial institutions” in “various countries”.
Here’s what IBKR’s bot responds when I ask it where are my assets held:
For customers of Interactive Brokers (U.K.) Limited, funds may be held either directly with IB LLC (the US entity) or with a designated financial institution where IBKR LLC maintains a customer account. These funds are maintained in customer accounts held in the name of IBKR LLC and are located outside of the U.K. The specific location of custody assets, derivatives positions, and client money can vary and may include different depositories, custodians, clearing houses, and bank accounts in various countries.
Then these are just my personal heuristics. I shouldn’t have been so sarcastic in my post earlier, apologies to @assemblyrequired .
To be honest, I don’t feel competent to understand the way IBKR is setup I struggled to understand Viac already because it had documents in German. I’m not working in finance either and would be very curious to learn what people think of eg: Swissquote VS Bank Wir.
PS: I will write to IBKR’s customer service and ask where are my assets held, I’m curious now.
Thanks for sharing. I truly hope that the situation is still fresh, and it won’t be long before they figure it out. It’s a lame excuse to return money to some customers and punt on the others just because there are no money. All customers should be proportionally affected and collectively bear the costs of figuring things out.
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I struggled to understand Viac already because it had documents in German. I’m not working in finance either and would be very curious to learn what people think of eg: Swissquote VS Bank Wir.