There is a reason behind this silence: I stopped to invest. It sucked anyway.
I expected to make 100-200kCHF of dividends after more than one year of patience... but it didn't happen... I mean, why would I lose 30min per quarter to win a ridiculous 4 to 8% of compound interests, and pay many broker fees moreover?!?
So I stopped. And luckily I found THE thing that works for me. Actually there are two.
I'm 100% sure they will make me richer than this previous stupid stock market strategy!
I will share it with you as that's why I created this blog: to share my failures, but also my wealth secrets.
Are you ready to be rich?
The first decision was to put this money into the bank where it's safer — they even give you some interests on their side too.
The second decision was to start to play lottery and cross my fingers every day.
Are you still reading?
Come on, this was funny, isn't it?! Moreover on a non-"April Fools' Day"!
In the paragraph above, there was one truth, and two lies.
I still don't use a bank's savings account as vehicle, nor I play lottery.
But I stopped to invest one year ago when we actually took the big leap.
We needed most of the money for the purchase and although we could have left some cash into the stock market, I played it the conservative way to avoid any market bad surprises.
And here we are one year later, waiting impatiently to be back into the stock market game, while we currently finish to build our emergency cushion.
3 things I learnt since I started to invest
Although I wasn't active in the place, here are a few takeaways I wanted to share with you regarding my previous portfolio:
- Hedged ETFs aren't interesting except in the short run. I used them as I was really worried to lose money due to currency exchange rate fluctuations. On the long run, they are (almost) useless, don't buy them.
Accumulating ETFs are better than distributing ones. We talk about the dividends here. Some ETFs reinvest automatically the dividends so your capital grow: these are the "accumulating" ones. The others are "distributing" the dividends. Accumulating is better because you don't need to pay 35% of Swiss withholding taxes on the dividends as soon as they get paid — although you still must declare the reinvested dividends with your Swiss tax declaration but the advantage is that your money stays invested longer.Update 13.09.2016: don't take this "accumulation > distribution" rule as the Truth. I overlooked it as it depends on so many factors such as your domicile, the fund's domicile and the country's withholding tax policy of the underlying securities. Read the comments' section to learn more.
- Ireland ETFs are more efficient about taxes than others (like Luxembourg's one for instance). If you're an alien like me (what?!), then you'd buy Ireland-based ETFs in order to be taxed on US companies' dividends at a rate of 15% instead of 30% otherwise. I let you go through the bogleheads' detailed explanation for more info on the topic.
I'm currently checking what will be my future portfolio, as well as which broker to choose. Feel free to share any good hints you may have found.