Search found 242 matches

by Charybdis
Sun Nov 25, 2012 3:45 am
Forum: Investing - Theory, News & General
Topic: Ultimate Buy and Hold - 8 slices vs 4
Replies: 770
Views: 409756

Re: Ultimate Buy and Hold - 8 slices vs 4

vset wrote:Hi all!

Can I use a similar portfolio here in Europe? Or you advice me to do some changes to avoid currency risk?

Thank you.
If you can find suitable ETFs domiciled in Europe, yes. Here are ALL the available ETFs for European investors (these are really all the options, updated daily): http://www.etfinfo.com/en/home/

Enter keywords into their search form to find ETFs. The last time I checked there are no small value ETFs at all, and no micro-cap ETFs. But there are global stock, REIT and bond ETFs.
by Charybdis
Thu Aug 16, 2012 4:36 pm
Forum: Non-US Investing
Topic: AMUNDI ETF SP 500
Replies: 9
Views: 2051

Re: AMUNDI ETF SP 500

Its distribution policy could be accumulation or distribution upon decision of the fund manger. So you don't know whether you will receive dividends or not.

I would not invest in such an ETF. They should tell you clearly whether the ETF is accumulating or distributing. Other ETF providers tell you this piece of information clearly. I think you should choose another ETF provider. Read the linked wiki article (see previous post).
by Charybdis
Mon Jul 30, 2012 4:04 pm
Forum: Non-US Investing
Topic: European investor considerations
Replies: 5
Views: 1594

Re: European investor considerations

Wiki article link: EU investing
by Charybdis
Thu Jul 26, 2012 4:47 pm
Forum: Personal Investments
Topic: Stock inheritance
Replies: 32
Views: 4178

Re: Stock inheritance

Definitely sell them all now. Then choose a lazy portfolio, according to your risk tolerance and unique circumstances of course.
by Charybdis
Thu Jul 26, 2012 3:41 pm
Forum: Investing - Theory, News & General
Topic: Call it anything but market-timing!
Replies: 51
Views: 5249

Re: Call it anything but market-timing!

pkcrafter wrote:
Charybdis wrote:Is it market timing if you increase your equity allocation due to very low bond yields?
No, it's worse. It's a behavioral mistake of chasing returns without regard to risk.

Paul
And what if the nominal yield is negative? Negative Yield on German 2-Year Note
by Charybdis
Thu Jul 26, 2012 3:29 pm
Forum: Investing - Theory, News & General
Topic: Call it anything but market-timing!
Replies: 51
Views: 5249

Re: Call it anything but market-timing!

Is it market timing if you increase your equity allocation due to very low bond yields?
by Charybdis
Thu Jul 26, 2012 3:24 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Fund SEC Yield below 2%
Replies: 73
Views: 9347

Re: Total Bond Fund SEC Yield below 2%

Default User BR wrote:
Charybdis wrote:Do the "age in bonds" and "stay the course" rules still apply when yields are very low, or even negative?

For example, investors in the negative yield European countries should still blindly hold bonds at a negative nominal yield?
What would be the alternative?


Brian
Decreasing bond allocation, and increasing stock allocation, especially buying more dividend paying stocks / REITs.
by Charybdis
Thu Jul 26, 2012 9:34 am
Forum: Investing - Theory, News & General
Topic: Total Bond Fund SEC Yield below 2%
Replies: 73
Views: 9347

Re: Total Bond Fund SEC Yield below 2%

Do the "age in bonds" and "stay the course" rules still apply when yields are very low, or even negative?

For example, investors in the negative yield European countries should still blindly hold bonds at a negative nominal yield?
by Charybdis
Wed Jul 25, 2012 11:23 am
Forum: Investing - Theory, News & General
Topic: Total Bond Fund SEC Yield below 2%
Replies: 73
Views: 9347

Re: Total Bond Fund SEC Yield below 2%

And in Europe there is negative nominal yield in many countries, for example in Germany. I cannot complain, my bond portfolio yields 9.5% (inflation + 4%), I hold my bond portfolio in HUF, in Hungarian TIPS. There are exceptional high yields here, and the risk is not so high. I know that when there is high return, the risk is also high, but I wouldn't take the currency risk and on top of that earn a shitty 0-2% yield. Do you still buy these bonds, even if you will earn a guaranteed negative real yield? Why not take some risk in your bond portfolio then? For example, buying more high-yield bonds? Or why not increase your equity allocation? What if there will be negative nominal yields in the US, like in many European countries? Will you stil...
by Charybdis
Mon Jul 09, 2012 3:19 pm
Forum: Investing - Theory, News & General
Topic: historical global equity returns
Replies: 11
Views: 1435

Re: historical global equity returns

But the history of 111 years is not so useful for a mortal human.

A more useful study would be: rolling 30-year real world equity returns, assuming the investor invested equal amount of money each year, inflation indexed, minus expenses and taxes (including dividend withholding taxes).

These studies never take dividend withholding taxes into account you pay to foreign governments, which decrease returns by about 0.3-0.7% / year. No matter what you do, dividend withholding taxes are non-reclaimable.
by Charybdis
Sat Jul 07, 2012 5:56 pm
Forum: Investing - Theory, News & General
Topic: Net total return vs. gross total return - a fallacy?
Replies: 26
Views: 59413

Re: Net total return vs. gross total return - a fallacy?

I think you shouldn't add new money each month and rebalance each month, you will pay too much spread and broker commission. Add money for example quarterly, and rebalance yearly. Don't invest in too many ETFs, 3-4 ETFs max. should do it. Also don't forget that you should pay for real time market data, because you should trade ETFs using limit orders. But for limit orders you should know the real time prices. And the market makers of certain EU domiciled ETFs increase the spread dramatically at random times and without notice. This is why you should carefully monitor the spread in real time, and buy only when the spread is tight. If you invest new money each month, then you must pay for the real time market data each month. If you invest qu...
by Charybdis
Sat Jul 07, 2012 12:50 pm
Forum: Investing - Theory, News & General
Topic: Net total return vs. gross total return - a fallacy?
Replies: 26
Views: 59413

Re: Net total return vs. gross total return - a fallacy?

I don't quite understand your tax situation regarding dividends, but when you buy a capitalizing EU ETF, you don't receive dividends, so no tax is payable. So you must carefully calculate which is better in your situation. Also when you receive dividend from a US domiciled ETF which invests in non-US equities, then you are double taxed: first, when the ETF itself pays the foreign dividend withholding tax, second when you pay the US dividend withholding tax. this can be avoided by buying an EU domiciled capitalizing ETF. So again, carefully calculate this in a spreadsheet. One time trading costs and bid/ask spreads aren't significant on the long haul. Your biggest costs will be the TER, the actual tracking error and dividend withholding taxe...
by Charybdis
Sat Jul 07, 2012 10:32 am
Forum: Investing - Theory, News & General
Topic: Net total return vs. gross total return - a fallacy?
Replies: 26
Views: 59413

Re: Net total return vs. gross total return - a fallacy?

Well, let's see. The US domiciled Vanguard Total Stock Market ETF has an expense ratio of just 0.06%. It distributes dividends quarterly. Question: are you able to invest new money each quarter? Because if you invest new money quarterly, then you could buy that Vanguard Total Stock Market ETF, because then you can reinvest the distributed dividends along with your new capital. So maybe it could be a good idea in your case to buy that Vanguard Total Stock Market ETF. However, I wouldn't buy the Vanguard Total International Stock ETF, because that ETF pays dividend withholding taxes to foreign (non-US) governments, then it distributes dividends to you, and you pay 15% dividend tax yet again. But an important question: when you receive dividen...
by Charybdis
Sat Jul 07, 2012 2:01 am
Forum: Investing - Theory, News & General
Topic: Net total return vs. gross total return - a fallacy?
Replies: 26
Views: 59413

Re: Net total return vs. gross total return - a fallacy?

Interesting topic, I had never thought about that. I understand your point and based on my knowledge about the subject I would say you are right. It would be much more clear and logical if the ETFs tracked the gross total return index. If an EU investor wanted to buy Ishares SP500, do you think he/she should buy the fund domiciled in US or EU? As I see it: 1 - If the investor bought the fund domiciled in US, then a witholding tax of 15% (double taxation treaty applied) will be applied on dividends. However the fund itself wouldn't pay any witholding taxes on dividends since the companies that constitute the SP500 are US based, like the domicile of the fund. 2 - If the investor bought the fund domiciled in EU, then he/she wouldn't pay any w...
by Charybdis
Wed Jul 04, 2012 9:06 am
Forum: Non-US Investing
Topic: Long term successful investing portfolio
Replies: 36
Views: 9535

Re: Long term successful investing portfolio

Dear colleagues , you in US use Vanguard for the Three fund portfolio : From Vanguard's list of "core funds," the funds that are best for a three-fund portfolio are: Vanguard Total Stock Market Index Fund (VTSMX) Vanguard Total International Stock Index Fund (VGTSX) Vanguard Total Bond Market Fund (VBMFX) I in EU will use: One could, of course, use ETFs rather than mutual funds. For example, one could use Total Stock Market ETF (VTI) [1], Vanguard FTSE All-World ex-US ETF (VEU) [2] for international, and Vanguard Total Bond Market ETF (BND). What are the differences? Commissions? Shall I open an Interactive Brokers account or I can use ETF's here in our european brokers? Thank you! :sharebeer No! Don't buy US domiciled funds! Tho...
by Charybdis
Mon Jul 02, 2012 2:01 pm
Forum: Non-US Investing
Topic: Dealing with foreign currency risk
Replies: 21
Views: 3749

Re: Dealing with foreign currency risk

As I further researched foreign currency risk, here is what I found: 1) From the Credit Suisse Global Investment Returns Yearbook 2012 : It follows that currency risk should not deter investors from diversifying internationally: the benefits outweigh the attendant currency risk. Furthermore, for global equity and bond investors, currency risk has less impact than might be expected. While currencies are volatile when looked at in isolation, currency risk is mitigated by its low, and slightly negative, correlation with asset returns. 2) Why International Diversification Is Important by Larry Swedroe: You shouldn't make the mistake of confusing familiarity with safety. An important component of a prudent investment strategy is having a signifi...
by Charybdis
Mon Jul 02, 2012 10:24 am
Forum: Investing - Theory, News & General
Topic: Buy ETFs with Market or Limit Order?
Replies: 50
Views: 19168

Re: Buy ETFs with Market or Limit Order?

I don't get your point. You don't buy the ETF when the US market is closed. However, you would buy the underlying stocks even if their market is closed?

When you buy the ETF, you buy the underlying stocks.
by Charybdis
Mon Jul 02, 2012 7:49 am
Forum: Investing - Theory, News & General
Topic: Buy ETFs with Market or Limit Order?
Replies: 50
Views: 19168

Re: Buy ETFs with Market or Limit Order?

And when buying an international fund, you should buy it when the underlying market or markets are open (note the time zones differences). So you should take European and/or Asian stock exchanges and their trading hours into account. That would be tricky with VT. I wouldn't worry about that too much. You should worry about it, because when the underlying market or markets are closed, market makers cannot accurately price the ETF and the spread is also higher. You're kidding, right? The market makers on international ETFs are probably the best people in the world at pricing stocks when their exchanges are closed. You shouldn't be buying anything on a US exchange outside regular market hours unless you really know what you're doing, and a de...
by Charybdis
Sun Jul 01, 2012 9:06 am
Forum: Investing - Theory, News & General
Topic: Aggressive Bogleheads Portfolio
Replies: 51
Views: 6373

Re: Aggressive Bogleheads Portfolio

I don't think it's a good idea to overweight small-cap value, or value so much. Why isn't 25% small-cap value enough? Instead of overweighting SCV, you could increase your stock allocation. What if SCV underperforms TSM in the next 15 years? Don't forget tracking error regret. I only have been investing for a few months, I don't know what it feels like to look at my portfolio, and realize that I could have been doing better with TSM, without the SCV tilt. But I imagine it would be a very bad feeling! :) I like Rick Ferri's Total Economy Portfolio, because it doesn't contain a huge tilt - 25% SCV and 10% REIT tilt. This is enough to improve your portfolio return and reduce risk at the same time at a high probability. But if SCV and REIT perf...
by Charybdis
Sun Jul 01, 2012 2:59 am
Forum: Investing - Theory, News & General
Topic: ETFs and the Uselessness of iNAV
Replies: 54
Views: 7747

Re: ETFs and the Uselessness of iNAV

But if market makers and the ETF itself knows the "true" iNAV during the day (which is not the published iNAV), then why don't they publish this information for free?

Because it is too valuable information to publish it for free?

But ETFa could help investora to publish the "true" iNAV anyway.

Or the best option would this NAV-based trading, similar to mutual funds. Because a lot of people are not interested in ETF trading during the day, they just want a fair price.
by Charybdis
Sat Jun 30, 2012 3:47 pm
Forum: Investing - Theory, News & General
Topic: Buy ETFs with Market or Limit Order?
Replies: 50
Views: 19168

Re: Buy ETFs with Market or Limit Order?

Cash wrote:
Charybdis wrote:And when buying an international fund, you should buy it when the underlying market or markets are open (note the time zones differences). So you should take European and/or Asian stock exchanges and their trading hours into account.
That would be tricky with VT. I wouldn't worry about that too much.
You should worry about it, because when the underlying market or markets are closed, market makers cannot accurately price the ETF, and the spread is also higher.

Buy VT when most of the underlying stocks are traded, i.e. when the European and US markets are open at the same time, but avoid trading near market open and market close.
by Charybdis
Sat Jun 30, 2012 2:43 pm
Forum: Investing - Theory, News & General
Topic: Aggressive Bogleheads Portfolio
Replies: 51
Views: 6373

Re: Aggressive Bogleheads Portfolio

And what happened to REIT? :)
by Charybdis
Sat Jun 30, 2012 1:06 pm
Forum: Investing - Theory, News & General
Topic: Buy ETFs with Market or Limit Order?
Replies: 50
Views: 19168

Re: Buy ETFs with Market or Limit Order?

And when buying an international fund, you should buy it when the underlying market or markets are open (note the time zones differences). So you should take European and/or Asian stock exchanges and their trading hours into account.
by Charybdis
Sat Jun 30, 2012 11:26 am
Forum: Investing - Theory, News & General
Topic: Buy ETFs with Market or Limit Order?
Replies: 50
Views: 19168

Re: Buy ETFs with Market or Limit Order?

Only use limit orders! And pay for real time data if you see only the 15 minutes delayed data by default. Note what happened during a flash crash a while ago: http://online.wsj.com/article/SB10001424052748703630304575270773406726084.html Even the procedure for buying or selling an ETF can trip up investors. A "market order" means the trade will be executed at whatever price the market gives you. But as the flash crash showed, those market prices can get unpredictable—quickly. Investors trading ETFs should use "limit" orders, says Morningstar's Mr. Justice. That means the trade will be executed only within a specified price range. "You're not guaranteed execution, but at least [you're] guaranteed a price," Mr. J...
by Charybdis
Sat Jun 30, 2012 10:22 am
Forum: Investing - Theory, News & General
Topic: Aggressive Bogleheads Portfolio
Replies: 51
Views: 6373

Re: Aggressive Bogleheads Portfolio

Don't ignore the psychological factor of investing.

If you are just starting out, you probably shouldn't allocate too much to equities. You can only measure your true risk tolerance, when you see your equity portfolio drop 20-30%.

Start small, get the hang of it, after that increase your equity exposure.
by Charybdis
Sat Jun 30, 2012 10:13 am
Forum: Investing - Theory, News & General
Topic: ETFs and the Uselessness of iNAV
Replies: 54
Views: 7747

Re: ETFs and the Uselessness of iNAV

Maybe I don't understand something, but if the end of the day NAV is accurate, and the intraday NAV isn't, then I guess there is a difference between the calculation method of the NAV and iNAV, right?

Then why don't stock exchanges/ETFs calculate the real time iNAV the same way as the NAV?
by Charybdis
Sat Jun 30, 2012 6:45 am
Forum: Investing - Theory, News & General
Topic: Average Tracking Error by ETF Provider- Vanguard is the Best
Replies: 6
Views: 943

Re: Average Tracking Error by ETF Provider- Vanguard is the

Here is a related article by Gary Gastineau at ETF Consultants LLC: The Lazy Portfolio Manager + Tracking Error ETFs do not have to hold cash balances to meet cash redemption requests. Sadly, many ETF portfolio managers have decided that holding cash makes them look better in bad years and does not hurt them too much in good years. Lazy Portfolio Managers are probably the greatest single reason for equity index fund tracking errors that are generally small and even favorable (positive) when the market is weak and nearly always unfavorable (negative) when the market is strong. But this doesn't make sense to me. If ETF can be fully invested, why do they hold cash? Only because of lazy portfolio managers? That would a surprising answer!
by Charybdis
Sat Jun 30, 2012 5:12 am
Forum: Investing - Theory, News & General
Topic: ETFs and the Uselessness of iNAV
Replies: 54
Views: 7747

Re: ETFs and the Uselessness of iNAV

Just a clarification: does it mean that I shouldn't even look at the iNAV at all? I mean iNAV is not even good for a rough estimate?

But how do market makers exactly calculate the "true" iNAV then? How could I do the same? Would it be cost-effective?
Or is it something which is only available to big players?
by Charybdis
Fri Jun 29, 2012 11:32 am
Forum: Investing - Theory, News & General
Topic: Aggressive Bogleheads Portfolio
Replies: 51
Views: 6373

Re: Aggressive Bogleheads Portfolio

I don't know what do you mean by "aggressive". There is a portfolio by Rick Ferri which has the potential to outperform the simple three-fund portfolio, at a lower risk level (higher Sharpe-ratio). Of course, the outperformance and lower risk level is not guaranteed, but you wanted an aggressive portfolio :) Here is it: http://www.portfoliosolutions.com/totaleconomyportfolio/ Basically you just add 25% small-cap value and 10%REIT to the three-fund portfolio. You could even add international REIT and international small-cap value to make it "more aggressive". You could also add a micro-cap fund (not too much) to make it über-aggressive :D I suggest not to go beyond that 25% and 10% thresholds. My equity portfolio looks li...
by Charybdis
Fri Jun 29, 2012 11:05 am
Forum: Investing - Theory, News & General
Topic: ETFs and the Uselessness of iNAV
Replies: 54
Views: 7747

Re: ETFs and the Uselessness of iNAV

So there is no way to know in advance whether I pay the fair price for an ETF, or not? You have to trust that the mid-point between the bid/ask spread represents close to NAV because the market makers have best estimate on what NAV is at any moment. That's the best you can do with ETFs. If you want guarrented NAV when you trade, buy traditional mutual funds. Rick Ferri Ok, thanks! SPDR ETFs Europe doesn't even publish the iNAV for free, only via Bloomberg/Reuters terminals, but that cost an arm and a leg. For the less liquid European ETFs (the majority of them are less liquid), the bid/ask spread is as much as 0.9-1%. If I pay that much money to market makers, then I hope they don't allow too large discount/premium to the NAV. I buy the ET...
by Charybdis
Fri Jun 29, 2012 6:16 am
Forum: Investing - Theory, News & General
Topic: ETFs and the Uselessness of iNAV
Replies: 54
Views: 7747

Re: ETFs and the Uselessness of iNAV

So there is no way to know in advance whether I pay the fair price for an ETF, or not?
by Charybdis
Thu Jun 28, 2012 12:13 pm
Forum: Investing - Theory, News & General
Topic: ETFs and the Uselessness of iNAV
Replies: 54
Views: 7747

Re: ETFs and the Uselessness of iNAV

I have a couple of questions.

Is there a difference between the calculation method of the iNAV, and the calculation method of the NAV? If they calculate the iNAV the same way as the NAV, then even the NAV is useless?

And what is the "true" value of an ETF anyway? The NAV?

If the iNAV is useless, then how do I know whether I pay the "fair" price for an ETF?
by Charybdis
Tue Jun 26, 2012 11:58 am
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

That's a good question. But if Deutsche Bank goes bankrupt, here in the EU we will have bigger things to worry about. Maybe it is also a good idea to diversify among ETF providers.
by Charybdis
Tue Jun 26, 2012 11:19 am
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

I also agree that the full physical replication is the best (and not the optimized physical, or synthetic replication).

But I couldn't find any full physical replication fund which is appropriate to me. So I won't avoid an ETF just because it uses optimized physical, or synthetic replication.

The db X-trackers ETF has a bunch of Japanese and US government bonds, and various stocks not related to the tracked index in the collateral basket.

So yes, it is a bit funny. Let's say the ETF tracks the global REIT index. The swap counterparty goes bankrupt, and you will end up with Japanese bonds and UK large-cap equities (for example), even though you bought a REIT ETF.

Ah, ETFs are complicated beasts!
by Charybdis
Tue Jun 26, 2012 11:06 am
Forum: Investing - Theory, News & General
Topic: so what if i wanted to learn day trading
Replies: 103
Views: 10632

Re: so what if i wanted to learn day trading

I heard that High-frequency trading is even more brutal than day trading.
by Charybdis
Tue Jun 26, 2012 11:02 am
Forum: Investing - Theory, News & General
Topic: Simba's backtesting spreadsheet [a Bogleheads community project]
Replies: 1367
Views: 821299

Re: Spreadsheet for backtesting (includes TrevH's data)

Where could I find the international or global REIT performance, from 1972 to 2011? Is there such a thing exist? I don't know where to download the global or international REIT returns.
by Charybdis
Tue Jun 26, 2012 10:38 am
Forum: Investing - Theory, News & General
Topic: AMA: Morgan & The Euro Crisis - Is this time different?
Replies: 73
Views: 8557

Re: AMA: Morgan & The Euro Crisis - Is this time different?

Passive Investing Wisdom from Taylor Larimore IU: In these trying times, do you think it's reasonable to make tactical allocation changes? Larimore: You are younger than I am or you might not call these "trying times." I have endured at least 10 bear markets when the S&P 500 declined 20% or more. I was eight-years-old when the Dow plunged 89%. My dad's restaurant failed for lack of customers, and we had to move into my grandparents Florida home. Later, there were: World War II, the cold war, the Cuban missile crisis, President Kennedy's assassination, the Vietnam War, the Korean War, 15% inflation, hostages in Iran, Y2K and dozens of other crisis situations. Each time, the financial pundits were forecasting gloom and doom. Bu...
by Charybdis
Tue Jun 26, 2012 10:31 am
Forum: Investing - Theory, News & General
Topic: so what if i wanted to learn day trading
Replies: 103
Views: 10632

Re: so what if i wanted to learn day trading

Instead of day trading, why not bet for a sector? For example, buy and hold a small cap value emerging markets index fund. You could earn as much as 20% per year if you are lucky. Only use 5% of your portfolio for this experiment. Put 95% of your money into a Lazy Portfolio.
by Charybdis
Tue Jun 26, 2012 10:23 am
Forum: Investing - Theory, News & General
Topic: International REITs/Real Estate Allocation
Replies: 59
Views: 10164

Re: International REITs/Real Estate Allocation

You defend yourself from crash via the bond portfolio, and the emergency fund. Not by omitting REIT. And no one can predict the future correlation, volatility and return of the REIT, so your comment about valuation doesn't make sense to me. And why limit yourself only to US REIT? US REIT is just 45% of the global REIT market. And it is common sense that "all real estate are local". I used Simba's spreadsheet to backtest the effect of the 10% REIT allocation. I examined all the 20-year periods between 1972 and 2011. Portfolio A had 50% Total US Stock Market and 50% Total International Market, Portfolio B had 45% Total US Stock Market, 45% Total International Market and 10% US REIT. In 1972-2011 there were twenty 20-year periods. Po...
by Charybdis
Tue Jun 26, 2012 9:58 am
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

That's right. Both the capitalizing and distributing share classes pay the same dividend withholding tax. The only extra tax you pay is the Italian dividend tax, if you choose the distributing share class. Ok seems like you aware of the fact that you pay unnecessary dividend tax in Italy, but you bear the tax burden because you like the distributing share class better. So if you understand this, then you do it right. By the way you could still reduce the Italian dividend tax. I don't know whether it's worth the hassle or not, but you could claim back the foreign dividend tax from the Italian taxman somehow. For example if the dividend tax in Italy is 20%, but the ETF already paid 15% dividend withholding tax, then you should pay only 5% div...
by Charybdis
Mon Jun 25, 2012 5:21 pm
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

The db X-trackers FTSE EPRA/NAREIT GLOBAL REAL ESTATE ETF is a capitalizing REIT ETF. the stock exchange doesn't matter, only the share classes matter. Also ETFs aren't subject to UK stamp duty reserve tax. It is a synthetic ETF, but full replication ETFs aren't riskless either. They use security lending, so they also have counterparty risk. Also if the synthetic ETF is over-collaterized, there is little counterparty risk. Also in the case of db X-trackers, the swap counterparty is Deutsche Bank. The ETF is also managed by Deutsche Bank. So what is the problem? You don't understand what I am talking about - not Ireland withholds dividend tax. The ETF itself pays the dividend withholding tax, but it is hidden from you. You can check their an...
by Charybdis
Mon Jun 25, 2012 4:53 pm
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

You sure pay double tax on ETFs. Unless you use the foreign tax credit. Do you use it? Let's say your Irish ETF holds a US stock. The ETF receives dividend from that stock. The ETF pays about 15% dividend withholding tax to the US government. Strike one. (note: the ETF can reduce the dividend withholding tax payable via security lending and synthetic tracking) You receive the same dividend from the ETF via distribution. You pay 20% dividend tax in Italy. Strike two. Now you should use the foreign tax credit: you should only pay 20%-15% = 5% dividend tax in Italy, not 20%. This is surely double taxation. It is your job to do someting against it: claim back the tax or buy a capitalizing ETF. Do you know that the ETFs track the net total retur...
by Charybdis
Mon Jun 25, 2012 3:02 pm
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

You pay unnecessary taxes? Why? Read the Bogleheads rules. 1st rule: minimize your costs, including taxes. Do you at least claim back the foreign tax credit? You pay taxes twice, this is a double taxation: First the ETF itself pays dividend withholding taxes to foreign governments, then you yet again pay dividend tax on the same dividend. In short, just don't do it! For example, if the dividend yield is 3%, you pay an unnecessary 0.6% / year tax. Most people on this board would kill for a 0.6% per year enhancement at the same risk level LOL. You pay the spread only once, but you keep paying the dividend tax over and over again. And why do you bring up liquidity? An ETF is always liquid thanks to the market makers. You should only care about...
by Charybdis
Mon Jun 25, 2012 2:39 pm
Forum: Investing - Theory, News & General
Topic: International REITs/Real Estate Allocation
Replies: 59
Views: 10164

Re: International REITs/Real Estate Allocation

But you talk about only US REIT, but US REIT is only about 45% of the REIT market.
by Charybdis
Mon Jun 25, 2012 2:28 pm
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

So exactly which ETFs do you intend to buy? And which share class (USD, EUR or EUR-hedged)?

I also prefer full physical replication ETFs, but if I can find only synthetic or optimized physical ETFs which are appropriate, then I buy them.

So you pay dividend tax after the ETF dividends??? Then why do you buy a distributing ETF? You could avoid the dividend tax if you would buy a capitalizing ETF! :confused
by Charybdis
Mon Jun 25, 2012 2:03 am
Forum: Investing - Theory, News & General
Topic: International REITs/Real Estate Allocation
Replies: 59
Views: 10164

Re: International REITs/Real Estate Allocation

@Valuethinker good points! The "lazy portfolios" recommend about 10% REIT allocation inside your equity portfolio. REIT is underrepresented in the total stock market index, that is why you should "tilt" towards REIT (because the economy contains more real estate than the total stock market). Here is an article about this: http://www.portfoliosolutions.com/totaleconomyportfolio/ And in fact terribly sloppy thinking. The stock prices of existing quoted companies (for example the large exposure to CRE of the banking and life insurance sectors) includes the market's estimate of the value of underlying property holdings. That would be obvious to anyone who believes in efficient markets. So, 10% in REIT of your equity portfol...
by Charybdis
Sun Jun 24, 2012 1:27 pm
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

But Vanguard has only 5 distributing ETFs. Why would you buy a distributing ETF? Also did you check the tax treaty for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income between Italy and Luxembourg, Ireland? Does Ireland or Luxembourg withheld any dividend taxes? Also check your broker fees: when you receive the dividends from the ETF, you must immediately reinvest them, because cash is a drag on equity returns. But if your broker charges high fees, youcannot immediately reinvest the dividends cost effectively. Also you must pay half of the bid-ask spread when you reinvest the dividends back into the ETF. And when you receive the dividend from the ETF, you may have to pay dividend tax in I...
by Charybdis
Sun Jun 24, 2012 12:35 pm
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

@billco "I agree with Valuethinker that the only 'European' advice one needs is that around the tax and transaction costs of being in a particular European country." No, check my post above. There is a lot more than that: -the different tax system -learn how to trade ETFs without losing money -learn about what the different shares of the same ETF mean: you can buy for example an ETF in EUR, in USD, or the EUR-hedged version. These three are entirely different; choosing between them is not obvious. They have different returns! -learn about what are the different replication methods (funded or unfunded synthetic, physical optimized, full physical) -learn about the impact of dividend withholding taxes on your return; learn the differ...
by Charybdis
Sun Jun 24, 2012 11:57 am
Forum: Non-US Investing
Topic: Any good European author for Bogleheads?
Replies: 32
Views: 24962

Re: Any good European author for Bogleheads?

@Valuethinker I think that my global equity portfolio in USD is a good protection against the default of my country. I considered opening a bank account in a safe foreign bank. But I get 8% interest rate in HUF, in my Hungarian bank, it is about 1.7% real interest rate after taxes (the government inflation linked bond yields 9.5% nominal, 4% real currently). @gorion83 I forgot to mention that trade ETFs using real time data. Pay for the real time data for your broker. The bid-ask spread of the European ETFs could be as high as 1%. And it widens during the trading hours unexpectedly and without a warning. So you can lose a lot of money if you don't see the real time bid and ask prices. If you want to buy a global equity ETF, then buy it only...