To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.I wish I had found this group when I was 23. It would have saved me a lot of money...
I 've not been a Greece tax resident for some time now, but I think I can help.
1. I will suggest first to have a look at these guys: https://www.ourwallet.gr/pos-forologountai-ependyseis/ . They seem to be the closest thing to a Greece bogleheads chapter. You will see that taxation is not a major issue for UCITS funds. After that have a look at the wiki and particularly here: https://www.bogleheads.org/wiki/EU_investing
Depends why you have it there in the first place. If it is cash as an emergency fund, it is not a bad place, although fees are crazy. Depends on the amount also. I have bank accounts in several countries; I would never keep an account in a country that charges custody fees.I 've not been a Greece tax resident for some time now, but I think I can help.
What is "an account in Switzerland by willfare"? Is this a bank or something?
The money are in a Swiss bank and as you understand the fees are very high (custody etc). I am considering transfering them somewhere else. Do you have any suggestion?
You would pay the contribution above a certain amount (εισφορα αλλυλεγγυης). This is assuming that the tax law remains the same - as we both know, tax law in Greece changes twice per year1. I will suggest first to have a look at these guys: https://www.ourwallet.gr/pos-forologountai-ependyseis/ . They seem to be the closest thing to a Greece bogleheads chapter. You will see that taxation is not a major issue for UCITS funds. After that have a look at the wiki and particularly here: https://www.bogleheads.org/wiki/EU_investing
Very usefull article. So as far i Understand if i buy a UCITIS etf (example S&P500) today at 100.000 and sell it after 10 years at 160.000 i will not have to pay anything in taxes?
The IB platform is complicated but you get used to it. Assuming you go the bogleheads way, it does not matter. You will not be using it every day anyway.2. Arrange an account with one of the low cost, online, international brokers. In your case, that would be either Degiro or Interactive Brokers. Degiro will be cheaper. Whichever you select: do not use a Greek bank or any Greek broker (ΑΕΠΕΥ) - it's a waste of money and unreliable.
I am in the process of opening an IB account, but it seems to me that the platform is quite complicated. Would you suggest that I work with someone special to guide me in setting up my account and to avoid any "childish mistakes"?
Also as far as i read the best practice is to Invest directly to Vanguard but this is applicable only to US and UK residents. If i transfer the money in a UK bank is there any way to overcome that issue and invest directly with VN?
20% bonds and 80% stocks.3. Establish an asset allocation. How much in bonds - how much in stocks. At 23 y.o. it is reasonable to go for something like 20%-80%. More info in the wiki.
20% Stocks and 80% Bonds? Could you kindly argue why do you believe that i must have such an allocation?
It is possible to go for an SP500 etf. I do not recommend it. You see it being recommended for many reasons; mainly because this is a US forum. Go global. If you prefer a fully accummulating portfolio, see the proposal from DJN. You can search for ETFs here: https://www.justetf.com/de-en/4. Select the ETFs you want to buy. You have to go for ETFs insteaf of Mutual Funds; unfortunately access to index MFs is expensive, if at all possible.
The wiki has some portfolio suggestions, the forum threads have plenty more, I suggest as follows:
- Buy the Vanguard FTSE All-World UCITS ETF for your stock portion. Buy it in euros, either in Euronext Amsterdam (ticker: VWRL) or XETRA (ticker: VGWL)
- Continue buying only this, until you reach to a substantial amount in the account that it makes sense to add the bond ETF.
- Buy the iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) for your bond portion. Again, buy it in euros, either in London (ticker: AGGH) or XETRA (ticker: EUNA) or Six-swiss (ticker: AGGH)
Do you believe is safer to buy in Euro's than in Dollars? Also in the forum i see that almost everybody is suggesting the Vanguard SP500 etf. Do you reccomend? Is it possible to buy it through a UCITIS etf?
A couple of years ago, they were sending their money to Montenegro and Ukraine to get some extra interest and protect against the failure of Greek banks -> most of them lost their money when the banks in Montenegro failed...5. Continue doing that, and that only. Say no to all the marvellous investment opportunities that will come along in your life offering above average returns - most are simply scams and it is not easy to distinguish the ones that are not. Example: now in Greece, people are selling the real estate concept again for high returns with low risk -> that's a scam.
I couldn't agree more. Everybody is buying small houses in Athens the last year. I believe it is a "bubble"
You need to see this Switzerland story as part of an overall strategy. If you move all the money to IB and close the Swiss account, you will lose the easy, immediate access to cash. And from what you're saying, you will also not have any cash available in home country. There is something wrong in this reasoning if I understand correctly. Always have cash available to cover at least 3-6 months of expenses. Whether the cash is in a Greek bank, under the mattress or Switzerland, is for you to decide...6. I assume you are aware about the capital controls. There is no way out of it so you have to comply. I trust the limit of money you can trasfer out of the country is high enough for a 23-y.o. person not to be affected by it.
Yes i am aware regarding the limitations but this is not an issue for me. I do not have savings in Greece and my salary almost cover's my monthly expenses. So i will have to invest from the money that they are already in Switzerland.
ICH i have sent you a PM!ICH wrote: ↑Mon Feb 11, 2019 8:46 amDepends why you have it there in the first place. If it is cash as an emergency fund, it is not a bad place, although fees are crazy. Depends on the amount also. I have bank accounts in several countries; I would never keep an account in a country that charges custody fees.I 've not been a Greece tax resident for some time now, but I think I can help.
What is "an account in Switzerland by willfare"? Is this a bank or something?
The money are in a Swiss bank and as you understand the fees are very high (custody etc). I am considering transfering them somewhere else. Do you have any suggestion?
You would pay the contribution above a certain amount (εισφορα αλλυλεγγυης). This is assuming that the tax law remains the same - as we both know, tax law in Greece changes twice per year1. I will suggest first to have a look at these guys: https://www.ourwallet.gr/pos-forologountai-ependyseis/ . They seem to be the closest thing to a Greece bogleheads chapter. You will see that taxation is not a major issue for UCITS funds. After that have a look at the wiki and particularly here: https://www.bogleheads.org/wiki/EU_investing
Very usefull article. So as far i Understand if i buy a UCITIS etf (example S&P500) today at 100.000 and sell it after 10 years at 160.000 i will not have to pay anything in taxes?
The IB platform is complicated but you get used to it. Assuming you go the bogleheads way, it does not matter. You will not be using it every day anyway.2. Arrange an account with one of the low cost, online, international brokers. In your case, that would be either Degiro or Interactive Brokers. Degiro will be cheaper. Whichever you select: do not use a Greek bank or any Greek broker (ΑΕΠΕΥ) - it's a waste of money and unreliable.
I am in the process of opening an IB account, but it seems to me that the platform is quite complicated. Would you suggest that I work with someone special to guide me in setting up my account and to avoid any "childish mistakes"?
Also as far as i read the best practice is to Invest directly to Vanguard but this is applicable only to US and UK residents. If i transfer the money in a UK bank is there any way to overcome that issue and invest directly with VN?
If you need help -> ask here.
If you are really uncomfortable with it and need help / support, I suggest using Mark Zoril from Plan Vision for the first year (96USD per year fixed fee). I have not used him but plenty of people I know have and all are happy with the support / price.
Going to Vanguard directly will not work. You have to be a resident there.
20% bonds and 80% stocks.3. Establish an asset allocation. How much in bonds - how much in stocks. At 23 y.o. it is reasonable to go for something like 20%-80%. More info in the wiki.
20% Stocks and 80% Bonds? Could you kindly argue why do you believe that i must have such an allocation?
You don't have to have this allocation. It simply follows the "your age in bonds" mandra.
It is possible to go for an SP500 etf. I do not recommend it. You see it being recommended for many reasons; mainly because this is a US forum. Go global. If you prefer a fully accummulating portfolio, see the proposal from DJN. You can search for ETFs here: https://www.justetf.com/de-en/4. Select the ETFs you want to buy. You have to go for ETFs insteaf of Mutual Funds; unfortunately access to index MFs is expensive, if at all possible.
The wiki has some portfolio suggestions, the forum threads have plenty more, I suggest as follows:
- Buy the Vanguard FTSE All-World UCITS ETF for your stock portion. Buy it in euros, either in Euronext Amsterdam (ticker: VWRL) or XETRA (ticker: VGWL)
- Continue buying only this, until you reach to a substantial amount in the account that it makes sense to add the bond ETF.
- Buy the iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) for your bond portion. Again, buy it in euros, either in London (ticker: AGGH) or XETRA (ticker: EUNA) or Six-swiss (ticker: AGGH)
Do you believe is safer to buy in Euro's than in Dollars? Also in the forum i see that almost everybody is suggesting the Vanguard SP500 etf. Do you reccomend? Is it possible to buy it through a UCITIS etf?
If you have and use euros only, buy in euros.
A couple of years ago, they were sending their money to Montenegro and Ukraine to get some extra interest and protect against the failure of Greek banks -> most of them lost their money when the banks in Montenegro failed...5. Continue doing that, and that only. Say no to all the marvellous investment opportunities that will come along in your life offering above average returns - most are simply scams and it is not easy to distinguish the ones that are not. Example: now in Greece, people are selling the real estate concept again for high returns with low risk -> that's a scam.
I couldn't agree more. Everybody is buying small houses in Athens the last year. I believe it is a "bubble"
You need to see this Switzerland story as part of an overall strategy. If you move all the money to IB and close the Swiss account, you will lose the easy, immediate access to cash. And from what you're saying, you will also not have any cash available in home country. There is something wrong in this reasoning if I understand correctly. Always have cash available to cover at least 3-6 months of expenses. Whether the cash is in a Greek bank, under the mattress or Switzerland, is for you to decide...6. I assume you are aware about the capital controls. There is no way out of it so you have to comply. I trust the limit of money you can trasfer out of the country is high enough for a 23-y.o. person not to be affected by it.
Yes i am aware regarding the limitations but this is not an issue for me. I do not have savings in Greece and my salary almost cover's my monthly expenses. So i will have to invest from the money that they are already in Switzerland.
I agree with the remarks.
Attica bank indeed, as it is shown here: https://www.tsig.gr/lang-el/prothesmiakesICH wrote: ↑Sun Mar 17, 2019 12:00 pmI agree with the remarks.
Best yielding CD at the moment seems to be with Attica bank.
Careful with the deposit compensation in Greece: if you have accounts in 2 banks, you are covered for 100+100 k euros. If the banks merge (common in Greece), you are covered for 100k total. Assuming that the government can cover anything
Mors,
Have you found a Greek Bogleheads chapter?
Hedge your fixed income into Euros. That's simple and easy to implement.jokerr wrote: ↑Mon Mar 18, 2019 3:56 pmHello Mors,
In my case, I don't think that the CD's of the Greek banks would be the best solution because I already have the money in another country. Bringing them to Greece means that I can't move them out if need (because of cc). And as you said, I would never risk having money in a Greek bank while is not impossible to return to the drachma.
So for the bond part, you suggest something different than iShares Global Aggregate Bd ETF HAcc that is suggested in wiki? What else then?
As for the online brokers, what you would do in terms of diversification somebody has more than 100k? Let's say 500k, would you suggest diversification among several brokers or you are ok having them all in IB?
Regarding the hedged and non-hedged part I must confess that is a little bit complicated for me. If we assume that I have all my money in euro should i convert some of them in dollars as many suggest? What is the risk and is there any way not to have currency risk?
Hello, fellow Greek here. Just started reading about investing and would need some help with all that info. Could i pm you for some help?jokerr wrote: ↑Fri Feb 08, 2019 7:47 amHi to all,
I'm glad I found you!
I am a 23-year-old tax resident in Greece and I have an account in Switzerland by willfare.
I would like your guidance on how to make a low-risk passive long-term investment. Reducing contributions as much as possible to tax authorities and management fees.
Thank you very much
Since we 're becoming a crowd around here, why not post in public?
Since i'd prefer to buy the ETF's in Euro in order to avoid the currency risk what would be the equivalent proposal of the above mentioned iShares ETF's that are in USD?Mors wrote: ↑Sat Mar 16, 2019 7:05 pm
-While I generally agree that the Vanguard FTSE All-World UCITS ETF is the best all-round etf for your equity exposure, if you go with a Degiro custody account, which is the cheapest solution, you should prefer accumulating etfs. In this case, go with 80-90% iShares MSCI World UCITS ETF + 10-20% iShares MSCI Emerging Markets UCITS ETF. Add a Small cap world etf as you grow your balance, as per the EU investing boglheads wiki.
You need to grasp the concept of the different types of ETF currencies and mainly the difference between "trading currency" and the currencies of the assets that the ETF holds. There is a nice summary here: https://www.bogleheads.org/wiki/Non-US_ ... currencies.dkyr wrote: ↑Tue Apr 09, 2019 12:37 pmGreek here also.
Since i'd prefer to buy the ETF's in Euro in order to avoid the currency risk what would be the equivalent proposal of the above mentioned iShares ETF's that are in USD?Mors wrote: ↑Sat Mar 16, 2019 7:05 pm
-While I generally agree that the Vanguard FTSE All-World UCITS ETF is the best all-round etf for your equity exposure, if you go with a Degiro custody account, which is the cheapest solution, you should prefer accumulating etfs. In this case, go with 80-90% iShares MSCI World UCITS ETF + 10-20% iShares MSCI Emerging Markets UCITS ETF. Add a Small cap world etf as you grow your balance, as per the EU investing boglheads wiki.
I am a beginner myself but I believe these instruments (e.g. funds that track a US index but are traded in EUR) do so via the use of swaps. This is a derivative. I haven't read any prospectus in its entirty, though. Isn't default of the swapping partner a major risk factor? At least relative to what index investors might think: "I have a claim to the physical shares in these US companies." Anyways, you are never to avoid the currency risk -- you're buying a thing that's supposedly sitting in the US, after all. Am I mistaken?ICH wrote: ↑Tue Apr 09, 2019 1:42 pmYou need to grasp the concept of the different types of ETF currencies and mainly the difference between "trading currency" and the currencies of the assets that the ETF holds. There is a nice summary here: https://www.bogleheads.org/wiki/Non-US_ ... currencies.
Basically, you choose the trading currency based on convenience: if you have euros -> buy in euros. If you have usd -> buy in usd.
But whether you buy it in euros or usd, the performance will be the same.
Check the benchmark in the fund description. If it says "currency hedged" then the fund hedge back into its currency of reporting/ denomination/ accounting. So if it is a US bond fund but Euro-hedged, your risk exposure is in Euros not US dollars.PraefectusDelegatus wrote: ↑Wed Apr 17, 2019 1:14 pmI am a beginner myself but I believe these instruments (e.g. funds that track a US index but are traded in EUR) do so via the use of swaps. This is a derivative. I haven't read any prospectus in its entirty, though. Isn't default of the swapping partner a major risk factor? At least relative to what index investors might think: "I have a claim to the physical shares in these US companies." Anyways, you are never to avoid the currency risk -- you're buying a thing that's supposedly sitting in the US, after all. Am I mistaken?ICH wrote: ↑Tue Apr 09, 2019 1:42 pmYou need to grasp the concept of the different types of ETF currencies and mainly the difference between "trading currency" and the currencies of the assets that the ETF holds. There is a nice summary here: https://www.bogleheads.org/wiki/Non-US_ ... currencies.
Basically, you choose the trading currency based on convenience: if you have euros -> buy in euros. If you have usd -> buy in usd.
But whether you buy it in euros or usd, the performance will be the same.
http://www.morningstar.nl/nl/etf/snapsh ... Format=PDF
The next one mentions derivatives:
http://www.morningstar.nl/nl/etf/snapsh ... Format=PDF
Are these also swaps, or does this fund actually first trade euros for dollars to then buy S&p 500 shares?
Just a note, if one clicks through those links they are in Dutch. Is there an equivalent description in English?PraefectusDelegatus wrote: ↑Wed Apr 17, 2019 1:14 pmI am a beginner myself but I believe these instruments (e.g. funds that track a US index but are traded in EUR) do so via the use of swaps. This is a derivative. I haven't read any prospectus in its entirty, though. Isn't default of the swapping partner a major risk factor? At least relative to what index investors might think: "I have a claim to the physical shares in these US companies." Anyways, you are never to avoid the currency risk -- you're buying a thing that's supposedly sitting in the US, after all. Am I mistaken?ICH wrote: ↑Tue Apr 09, 2019 1:42 pmYou need to grasp the concept of the different types of ETF currencies and mainly the difference between "trading currency" and the currencies of the assets that the ETF holds. There is a nice summary here: https://www.bogleheads.org/wiki/Non-US_ ... currencies.
Basically, you choose the trading currency based on convenience: if you have euros -> buy in euros. If you have usd -> buy in usd.
But whether you buy it in euros or usd, the performance will be the same.
http://www.morningstar.nl/nl/etf/snapsh ... Format=PDF
The next one mentions derivatives:
http://www.morningstar.nl/nl/etf/snapsh ... Format=PDF
Are these also swaps, or does this fund actually first trade euros for dollars to then buy S&p 500 shares?
I don't know the tickers or what funds they mean. Generally, here, that's a problem with posters - for whatever reason, they just post fund tickers.PraefectusDelegatus wrote: ↑Thu Apr 18, 2019 8:14 amCSPX has tripled since January 2011, while the S&P 500 has increased by less than 150%. Does that mean CSPX is not hedged against currency volatility? I assume the difference in performance is because EUR is so cheap compared to USD?
PraefectusDelegatus,PraefectusDelegatus wrote: ↑Wed Apr 17, 2019 1:14 pmI am a beginner myself but I believe these instruments (e.g. funds that track a US index but are traded in EUR) do so via the use of swaps. This is a derivative. I haven't read any prospectus in its entirty, though. Isn't default of the swapping partner a major risk factor? At least relative to what index investors might think: "I have a claim to the physical shares in these US companies." Anyways, you are never to avoid the currency risk -- you're buying a thing that's supposedly sitting in the US, after all. Am I mistaken?ICH wrote: ↑Tue Apr 09, 2019 1:42 pmYou need to grasp the concept of the different types of ETF currencies and mainly the difference between "trading currency" and the currencies of the assets that the ETF holds. There is a nice summary here: https://www.bogleheads.org/wiki/Non-US_ ... currencies.
Basically, you choose the trading currency based on convenience: if you have euros -> buy in euros. If you have usd -> buy in usd.
But whether you buy it in euros or usd, the performance will be the same.
http://www.morningstar.nl/nl/etf/snapsh ... Format=PDF
The next one mentions derivatives:
http://www.morningstar.nl/nl/etf/snapsh ... Format=PDF
Are these also swaps, or does this fund actually first trade euros for dollars to then buy S&p 500 shares?
Note: CSPX is accumulating; i.e. the dividends are not distributed to the shareholders, but are increasing the value of the fund. The S&P 500 index "distributes" the dividends. Maybe that's why you see a big difference.PraefectusDelegatus wrote: ↑Thu Apr 18, 2019 8:14 amCSPX has tripled since January 2011, while the S&P 500 has increased by less than 150%. Does that mean CSPX is not hedged against currency volatility? I assume the difference in performance is because EUR is so cheap compared to USD?
Sorry I may have highjacked your post but I was indeed using different examples (funds I know) to discuss the segue about currencies.ICH wrote: ↑Thu Apr 18, 2019 9:45 amJust to understand each other, my post above was for:
1. iShares Core MSCI World UCITS ETF
2. iShares Core MSCI EM IMI UCITS ETF
The first is having stocks of developed markets, the second stocks of emerging markets. With these 2 ETFs, you basically own the global stock market. They are having any derivatives. They are simply traded in many currencies.
The 2 ETFs that you mention are:
a. Invesco S&P 500 UCITS ETF (EUR) | SPXS, which tracks the S&P 500 index with swaps. https://etf.invesco.com/gb/private/en/p ... nformation
b. iShares Core S&P 500 UCITS ETF, CSPX, which tracks the S&P 500 index physically, without swaps. https://www.ishares.com/uk/individual/e ... rough=true
I am not a US person, so if you ask me which S&P 500 index ETF to choose, I would go for neither. I prefer global, all in one ETFs.
Tickers are short and easy. Full fund names sometimes differ in a single word; easy to read over it. Just search for the ticker in e.g. morningstar?Valuethinker wrote: ↑Thu Apr 18, 2019 8:18 amI don't know the tickers or what funds they mean. Generally, here, that's a problem with posters - for whatever reason, they just post fund tickers.
Sorry, I forgot to mention. I used this tool which says +165% dividends reinvested.ICH wrote: ↑Thu Apr 18, 2019 9:48 amNote: CSPX is accumulating; i.e. the dividends are not distributed to the shareholders, but are increasing the value of the fund. The S&P 500 index "distributes" the dividends. Maybe that's why you see a big difference.PraefectusDelegatus wrote: ↑Thu Apr 18, 2019 8:14 amCSPX has tripled since January 2011, while the S&P 500 has increased by less than 150%. Does that mean CSPX is not hedged against currency volatility? I assume the difference in performance is because EUR is so cheap compared to USD?
PraefectusDelegatus:PraefectusDelegatus wrote: ↑Thu Apr 18, 2019 10:33 amSorry, I forgot to mention. I used this tool which says +165% dividends reinvested.
That's an answer to my questionICH wrote: ↑Thu Apr 18, 2019 10:49 amPraefectusDelegatus:PraefectusDelegatus wrote: ↑Thu Apr 18, 2019 10:33 amSorry, I forgot to mention. I used this tool which says +165% dividends reinvested.
Try justetf: https://www.justetf.com/de-en/etf-profi ... &tab=chart
you can see the effect of different currencies and if you choose distributing funds, you can choose to run the calcs with dividends reinvested or not.
From 19-05-2010 to date, I see CSPX in EUR gaining 230%. In USD 200%. In GBP 230%. In CHF 165%. That is one of the effects of currency variations.
Using the tool you posted, I see that from May 2010 to April 2019, the S&P 500 has risen 157% and with dividends reinvested 205%. I assume this does not include the costs of a fund. Dates are slightly different but you would expect the fund costs to reduce the return of the index.
I am not certain what is your question about currencies.
