I should start by saying that I’m very much a novice when it comes to investing. That said, I’ve been reading “Simply Stock Trading” and I am genuinely impressed by the depth of knowledge on this forum.
I would really appreciate some advice.
I started contributing the maximum to a PostFinance Pillar 3a in around 2013. At the time, I kept everything in cash because I didn’t even realise investing within a 3a was an option. A colleague suggested I should have more than one 3a account, so I opened additional accounts, but they all remained in cash.
In 2020, after doing some reading, I moved my 2 accounts into the PostFinance ESG 100 strategy. I currently have four separate 3a accounts, all invested in the same strategy. The two oldest invested accounts have grown by around 65% since then.
More recently, I have been looking into retirement planning in a bit more detail. One possibility is to retire abroad and I have read that the domicile of the 3a foundation can matter from a tax perspective. For that reason, I am considering transferring my 3a to Finpension.
My dilemma is choosing the right investment strategy. I know I want to remain 100% invested in equities, and I have learnt in “Simply Stock Trading” that broad sector diversification is important. Beyond that, I am rather out of my depth.
If you were in my position, with roughly 13–15 years until retirement, which Finpension strategy would you choose, and why?
Finpension offers a 100% equity strategy. If you would like to preserve the ESG component, there is also a 100% equity strategy with ESG available. Did you look at these two strategies? These are very good strategies if you want to broadly invested in 100% equity.
As for myself, I have a custom strategy at Finpension with only one fund: UBS (CH) Index Fund 3 - Equities World ex CH NSL I-X-acc. For me this minimized rebalancing costs while keeping a good worldwide exposure. I compensate the lack of Switzerland with a Swiss overexposure in my other investments.
Stock trading is not investing, so ditch that book and find one on actual investing. You need a book that tells you what to watch out for when fund investing…
I’m not familiar with these funds, nor at this stage in life 60+ do I have the motivation to bother digging into them… I did find a few fact sheets on line and they would be concerning to me - No benchmarks and being a fund of funds with a very low expense ratio… You would need to dig into that in detail to find the true cost of investing and the actual performance.
If it were me, I’d find something simpler like an ETF that does not use synthetics.
If you really don’t want to think about it: Take one of finpensions premade strategies. It’s more than good enough - I’d advise that if you invest outside of 3a to go 100% stocks on 3a (biggest tax benefits, due to no taxation on dividends).
Decide on your asset allocation: So how much capital you put at risk and put the rest into fixed term deposits with 1% intrest in CH
As for investing the risky portion: Open an IBKR account (if you’re Swiss based) and buy a generic world ETF. You don’t need much more than that.
I personally trade VWRD at LSE, but you can also trade VT at NYSE or VWRL at SIX - these funds are for all intents and purpuses almost equal. If you want the simplest solution, go with VWRL at six - no currency conversion and no DA1 filings.
If you really want to do more active investment decisions, I’d still advise you to build a solid cushion (200K CHF+) with said ETF first and then look into either stock picking or tilting your allocation to a specific sector and country.
If you really want to have a home bias, add no more than 20% Switzerland (via CHSPI for example), but you don’t have to do that.
At the end of the day, it’s your money and after spending over 35 years in Swiss private banking, the one thing I have learned is you can’t protect people from doing what they want to do no matter the consequences.
