Switzerland weight 3% globally so why not calculating your global allocation in an Excel spreadsheet to see the current weight of markets in your investments ?
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Aren’t many employees getting their salary increases with the new year?
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If am not mistaken, the 3a tilts me towards a Swiss exposure of 8.69%.
Since I am an expat, I am not sure I want a bigger Swiss bias (even if it eliminates some currency risk).
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Indeed. I’ll have to see how that pans out. As stated earlier, I’d rather act earlier and with conviction and be wrong than act after everybody else has already made their move.
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Can you please provide some more details regarding the Lombard loan plan? (I’m sorry if I missed it):
- What’s the rate/company?
- Are you planning to go for broad market funds like VT?
I’m flirting with the idea too and I would like to hear more about your plans/thought process.
Thanks
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Mandatory warning: I am taking risk, only take leverage if you have assessed yours, and never take more than you can handle. My solution works for me because, being at the early stages of accumulation, I can pony up collateral cash in amounts relatively consequent relative to the size of my leverage. I would probably be more cautious if I didn’t have this ability.
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Lombard loans don’t provide the kind of leverage I need. Not all my assets are used as collateral (I’m using stocks in my 3a pillar as part of my calculation regarding how much total exposure I want, so I am way over the pure 1.4x leverage of my liquid assets). I am targeting a x3 actual leverage as a risky but acceptable level, x2 would be a safer one. I am currently at x7 on my assets put as collateral, which is way over the “safe” level but brings me at my target exposure.
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I’d ideally use futures, they’re regulated, have good liquidity, offer cheap leverage. My ideal situation would be investing in SMI futures through IBKR. The choice of SMI futures is because I don’t want to have anything to do with regulated US assets and they’re easier to handle than a more global basket of futures using several indexes/ETFs. I’m at ease with the concentration risk, other people might not be.
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As I’ve started with very low amounts, and initially wanted to short the market, I’m currently trying my hand at CFDs. CFDs are not regulated, they are basically an agreement between you and your broker, with your broker betting against you. If your broker wants to screw you over, they can, and your only recourse will be paying a lawyer and going to court (where you are not guaranteed to win because your broker can be subtle about screwing you if they want to). For that reason, I feel better with a swiss broker (I’d rather go to a swiss court than deal with a legal system I don’t understand), so I’m using CornèrTrader.
I don’t recommend CornèrTrader and I don’t recommend CFDs. They happen to suit my purpose, which is extremely risky. Chances are they may not suit yours.
- I am using CFDs on the Nasdaq and the S&P500 because they are cheap, offer good leverage opportunities and I expect them to have good rebouncing capabilities if the market starts going up in the short term. I’ll keep evaluating if that choice still fits my assessment as time passes.
The basis of my risk assessment is that I deem not increasing my chances of profits at this stage as a bigger risk to my overall wellbeing than the risk of loosing the few assets I currently have (being close to apparent burn-out counts in that assessment). I am willing to risk loosing all (and some more), and might very well with this strategy. Others may have a different risk assessment and deem the risk not worth the potential prize.
As a side note, leverage is becoming more expensive as rates go up, so that should be taken into account too.
As another side note, using leveraged assets (options, futures or CFDs) puts you out of the safe harbor zone regarding being taxed as a professional investor. That should also factor in your personal assessment.
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For those of you who think that we might be going into a recession in the next few months in order for the market to correct itself…
Is anyone putting a pause on monthly dollar cost averaging into their 3a and online broker investments, and pacing purchases to maybe every 3 months instead?
If anything, I’d do exactly the opposite:
Increase to the maximum contribution.
(Well… if I weren’t at the maximum yearly contribution anyway, that is)
There’s been so much talk of a recession already… is there anyone that hasn’t heard of it already? A minor recession has been so much anticipated that it’s probably priced in already. One could even ask: Aren’t we experiencing, sort of, one already? One where activity and output in non-monetary or “real” terms is declining already - and it’s just masked by inflation, so doesn’t show as nominal decline.
And the correction… it has happened already, hasn’t it?
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I couldn’t invest last year because I hadn’t the money for, but if I could, I would invest. From january 2023, I can invest monthly and I will continue to invest each month on my paid day 
I wouldn’t be surprised if stock markets begin to increase right when/after the numbers show that we (or the US). “really, officially now” have hit a recession. Somewhat counterintuitively? Maybe. But stock markets often either lag or anticipate the macroeconomic climate.
What I would rather worry about is a financial crises in the wake of the paradigm shift from more than a decade of zero-interest low-inflation to substantial increases and a share rise of inflation.
Have the markets and banks really digested that successfully and have we seen all of it after SVB and CS?
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I would pause 3a contributions if I didn’t have enough accessible assets in taxable to cover the personal ill effects a recession can have on me (loss of job, loss of property value and so on).
I would not change anything in regards to my contributions based on the expected performance of my invested assets.
In my opinion, the secure way to face a recession is to let go of leverage, secure our financial position (have enough assets available to carry us if personal trouble arises), be good at work (to encourage our company to keep us), diversify our skillset and keep investing the assets that aren’t required for short term trouble handling. We don’t know if/for how long the stock market would go down and we don’t know when nor how quickly it would rebounce. Keeping investing ensures we will be investing all the way down and all the way up, scoring a good investment chunk at the lower prices.
I expect a flat and volatile market dragging on rather than a quick drop but a quick or prolonged drop is obviously not off the table and we should be ready for it.
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What might surprise the markets isn’t that we are/will be facing a recession but the reaction of central banks to it.
The betters (data from CME FedWatch tool) have priced in 4 ! FED rate cuts this year, basically 25 basis points every meeting starting July, despite Jerome Powell stating they don’t expect to cut rates this year.
There are still way too many signs of market participants holding on to how things behaved in previous conditions and probably underplaying the difference having high inflation on top of a recession makes. I wouldn’t be surprised if we face market surprises going forward.
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I concur. Some correction has happened already - but doubt remains is whether that has priced us down to a “sensible” level already.
It indeed feels that many market participants are anticipating rate cuts that frankly don’t seem realistic (especially when taking into account Powell’s stance). And the way stock prices have held up rather well, compared to the last financial crisis, could mean there’s ugly surprises in store.
There’s potential further turmoil (liquidity/trust crises) in the financial sector.
There’s also inflation and interest rates that could catch markets by surprise.
I’d put both way above inflation in my list of justified fears.
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I have halved my monthly contributions into VTI, VXUS, VIOV.
I will keep more cash.
It’s funny to see how everyone always starts off by saying:
“Oh, it’s a no brainer to become a millionaire investing! Just do it consistently for 30 years! So easy”
Then reality happens and you start questioning the plan, reduce your monthly contribution (when it is probably the best time to invest) or even stop all together.
Everyone should have written a Investor Statement and just stuck with it.
The best strategy is just staying invested and doing it for the long term.
You are just bored. Get a hobby and don’t change your investment strategy every couple of months
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Personally I could increase my monthly contribution with a real job 
If you’re a long-term buy & hold investor, it really doesn’t matter if were heading into a recession or not. It’s all just paper losses / returns anyway.
Short-term traders however might care about upcoming recessions. But they’ve got a minor issue: They don’t know the future.
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Thank you for the timely reminder to just stick to the plan and not overthink it.
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Someone said “A long-term investment is a short-term speculation that went wrong” 
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As Terry Smith would quip: “Do nothing. That’s the hard part”.
I would have a small reservation when it comes to making a big lump-sum investment (so would Terry).
But otherwise that’s so spot-on. Consistency pays off in many other ways in life, too.
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