Swissquote vs. Saxo for keeping money

[celizo]

I know lots of experts who say that stocks are not overvalued and just another example here: Market Fair Value | Morningstar
… that the yield curve inversion doesn't mean forcibly a future recession... P/E Schiller ratio is not.... bla bla bla...
Honestly, I do not take any consideration of the predictions, because nobody knows.
"market timing" is one of the main reason why people lose money in investment.

The problem with being 100% cash is that the investors will be sure to lose (with inflation, in comparison to be invested) if a crash do not happen let say in the next 2-3 coming years.
Stock markets went down to -20% in the end of 2018, so it was a very good entry point.

Some diversified portofolio, such as the "all weather" of Ray Dalio has a very good balance between the return and risk: for instance, the drawdown was uniquely -12% in 2008-2009.

Ray Dalio All Weather Portfolio: ETF allocation and returns

Build the Ray Dalio All Weather Portfolio with 5 ETFs. Follow its asset allocation and find out the historical returns of the portfolio.

www.lazyportfolioetf.com

A portfolio repartition must be applied in regards the psychology of the investor (do you accept a low/medium/high drawdown, if you are retired, will you need liquidity shortly?).
If a person is able to accept a big drawdown and is 100% stocks, he will surely win largely more in the mid/long run than me with my very conservative portfolio.

Another example: in my country of origin, most of people hate stocks because it's risky and it's why they invest in real estate uniquely.
They do not see that their real estates has most of the time even lost lots of value in the last 10-12 years because they don't make estimations of the value (but they see the valuation of a stock portfolio).
An investment 100% in stocks (world index) with a very bad timing (2007 for instance) is multiplied by 2 to this day (largely not the case of real estate in my region/country).

"Here's how the richest people in the world are investing their money":

Here's how the richest people in the world are investing their money

markets.businessinsider.com

"Family offices are allocating 28% of their average portfolio to the equities market, followed by 22% in private equity, real estate (17%) and bonds (16%)."

By the way, I see lots people waiting a crash since 2014-2015, they have lost more money than with a big crash with 100% stocks. LOL

 

[Martin Everson]

I know lots of experts who say that stocks are not overvalued and just another example here: Market Fair Value | Morningstar

Where's the stock names please? Pretty graphs are nice but I need some names....lol.

The problem with being 100% cash is that the investors will be sure to lose (with inflation, in comparison to be invested) if a crash do not happen let say in the next 2-3 coming years.

Ever heard of deflation? I guess this has never happened before and the risk of deflation can never happen again .

I bank with UBS as I mentioned in another thread and I had the conversation about inflation with them. That's the usual lie, FOMO etc they give over why I should put my 8 figure inheritance into equity ETF and some bond ETF's. They told me over time the same nonsense that I am sure to lose money to inflation etc and equities out performs bonds and cash long term and I would be worse off etc etc. So I asked them if I invest 16m all in AAA 30y bonds at 4% yield then in over the next 30 years I would not be able to live on 640k a year in my 1 bed flat is that right? My portfolio manager and banker went silent and the next morning the orders were put in for the bonds I wanted and I never looked back. I will reassess my strategy when interest rates increase. As ECB has just cut interest rates further I still have some wait....lol.

"Here's how the richest people in the world are investing their money":

Here's how the richest people in the world are investing their money

markets.businessinsider.com

Never trust a UBS report. This is a bank that has been fined for misconduct and rigging the markets. This was a bank that had a buy recommendation on HCL Technologies one time. They never revealed to me they had just signed a major contract with them at the time...but hey no conflict of interest in anything they say.

Portfolio theory is nice and you can make some great money on stocks but I am not out to make money but preserve what I have in the lowest risk way. When Eurozone inflation rate is at 4% (from current 1%....lol) then I will look at exiting bonds but I will have plenty of time to see rates rising and roll into higher yielding long term bonds .

P.S I want only risk free investments not stock speculation. "A bird in the hand is worth two in the bush".

 

[celizo]

Morningstar indicates "All Rated Stocks" this is a very large world index I presume.
Deflation, recession, inflation, ... who knows the future indeed

The problem for european investors is that even if the current inflation is low, there is actually absolutely no placement covering inflation with A+ sovereign bonds available in Euros.
It's not the best time to change euros/usd aswell and buying USD bonds or certificates.
It's why currently I do not see any other possibility to have a conservative balanced portfolio in order to cover at least 1.5%-2% of inflation in eurozone.
Maybe i'm wrong...

 

[celizo]

discussed last year how Warren Buffett stock piles cash ($90bn) in Berkshire Hathaway in the form of US treasuries.

yes, but in the other hand Warren Buffet's advice is to be invested 90% in stocks

 

[KJK]

yes, but in the other hand Warren Buffet's advice is to be invested 90% in stocks

What a nice advice from him, thank you that must be perfect allocation for the follo..... oh wait...
BRK now holds $122B in cash out of their $524B market cap. That sounds more like almost a quarter in cash.

The real problem isn't that X is overvalued (replace "x" by what you wish - S&P500, Nasdaq, Stoxx600, FAANG), the problem is that there aren't many good alternatives. And it will only get worse and worse.

Yes, you can find value in some specific segment or region - but it won't be by buying an ETF or listening to advice from your banker (even if that banker is from UBS, or actually moreso if your banker is from UBS).

If you're from a specific country, look into that country's market and you will probably be able to understand it better than the average investor. Michael Burry - who predicted the 2008 crash - is now looking into Japan out of all places which is a bit funny because what has been happening in Japan for the last 30 years (stagnating markets and aging population) may soon come into Europe and US. They are just one generation ahead.

 

[Martin Everson]

It's why currently I do not see any other possibility to have a conservative balanced portfolio in order to cover at least 1.5%-2% of inflation in eurozone.
Maybe i'm wrong...

Your not wrong. Right now if I had not bought my bonds when I did I would be screwed. However I wouldn't be looking to get into a bubble market to fight of loosing money to the current low 1% inflation rate in Eurozone.

yes, but in the other hand Warren Buffet's advice is to be invested 90% in stocks

Forget what comes out of his mouth and look what he actually does on paper. He is a hypocrite if he said that considering Berkshire Hathaway holds huge cash. He has increased his cash holdings from $90bn to $122bn. He is really interested in the stock markets isn't he?

Here's why Warren Buffett's record $122 billion cash pile could be a worrying sign for stock markets

markets.businessinsider.com

The markets are completely overvalued. Everything is in a bubble right now. So hold cash period!!!!!

 

[Artemis Eleutheria]

Cash is also overvalued right now ... which makes for an interesting situation.

 

[celizo]

He has increased his cash holdings from $90bn to $122bn. He is really interested in the stock markets isn't he?

But he is not 100% cash! So he is not 100% really sure that a krach will happen very shortly.

Amongst the main portfolios examples of "experts" (Brown, Dalio, Faber, Buffet, …),
nobody recommend to be invested 100% in an asset class for a balanced portfolio (I mean capable to be efficient in every situations: inflation, recession...)

A portfolio with 20% of stocks is a "low risk" portfolio.
If the investor is not Lucky and start to invest just before a krach (i.e. 2007), the drawdown is low and it will be recovered very quickly if he has some cash to invest when stocks are very undervalued.

For bonds (I like this asset too for the stability and for the fiscality in my country aswell), unfortunately the 30 years US treasury has not reached 4% last year, and it was my goal to buy a good portion.
Unfortunately, maybe it will take a long time/years to see again the US30Y >= 4%

 

[KJK]

It's why currently I do not see any other possibility to have a conservative balanced portfolio in order to cover at least 1.5%-2% of inflation in eurozone.

Current inflation of the eurozone isn't the real problem. The real problem is all what's behind it... A single currency means united monetary policy but not united fiscal policy. You have Germany/Netherlands vs Italy/Spain/France, it's like attaching horse to a cat with a rope and expecting they will walk happily together. Plus aging population and politicians caring only about the next 5 years (their election period).

It will be very difficult to find some way out of it... One way is a galloping inflation (see the "modern monetary theory" aka helicopter money and everyone will be happy), another way is a deflation (see "deep negative interest rates" which is how economists want to prevent it). Both ways are pretty scary, deflation maybe more scarier of the two.

I'm not sure what the central banks will do but they may be surprised when people start fleeing to gold and Bitcoin... Unfortunately not enough people will do it so I'm afraid central banks/politicians will be able to do whatever they want without facing any consequences themselves.

For bonds (I like this asset too for the stability and for the fiscality in my country aswell), unfortunately the 30 years US treasury has not reached 4% last year, and it was my goal to buy a good portion.
Unfortunately, maybe it will take a long time/years to see again the US30Y >= 4%

It's nice that you like bonds but of which country? USA? I see you're using a "krach" typo instead of "crash" so I assume you're European/Eastern European. Now imagine your country is an export-based economy and because of that is using some undervalued currency.

Now you buy US bonds with 4% yield. In the meanwhile your currency appreciates against the dollar (because after all that is what Trump wants, a weaker dollar) let's say 10%. You end up with approx. minus 6%. What a great deal.

It seems to me like an illusion that bonds - especially negative euro bonds - have some amazing value. Maybe sell it to a greater fool for a bit more in a year or so?

Junk corporate bonds are another crazy thing which I do not understand, first of all there are heavily indebted companies who just issue more bonds... And there are even many small companies and online investment platforms, all you need to do is form a company for €1000, create a shitty business plan and announce you need €200k or more, promise 10-20% and people will just send money to a company with absolutely no history, no background and no business.

Cash is also overvalued right now ... which makes for an interesting situation.

What does that mean?

 

[Martin Everson]

But he is not 100% cash! So he is not 100% really sure that a krach will happen very shortly.

Lol....we are talking about a bubble not a crash. When everything is overvalued return to cash. I don't also think investors are going to pay Berkshire Hathaway to simply manage 100% cash also...lol.

Unfortunately, maybe it will take a long time/years to see again the US30Y >= 4%

Yes but the US Fed is mulling over a 50 year bond and possibly even a 100 year bond.

P.S I hold zero US assets and will not hold any US assets I don't even have a USD account.

 

[Artemis Eleutheria]

What does that mean?

Printing presses overheating.

 

[celizo]

Now you buy US bonds with 4% yield. In the meanwhile your currency appreciates against the dollar (because after all that is what Trump wants, a weaker dollar) let's say 10%. You end up with approx. minus 6%. What a great deal.

No, I've already lived outside the UE (USD Currency), and I will live in a few months outside the UE again, and probably for many years.

 

[BlueMist]

I use Internaxx, they were bought by SwissQuote last year. From what I know Internaxx is going to merge the platform with SQ early next year. This should improve the security by introducing 2FA, which Internaxx currently lacks. Something to keep in mind is that Internaxx doesn't allow 3rd party transfers IN and OUT, but from what I have read here apparently SQ does allow this.

Also both SQ & Internaxx have maximum quarterly annual fees of EUR 45, so maximum EUR 180, this is provided we won't trade at all. If we trade once per quarter this fee goes down to EUR 25 in case of Internaxx. Saxo has 0.12% annual custody on total investments. It is not hard to figure out that if someone is going to invest long term more than EUR 150,000 , it is better to to use Internaxx. Just keep in mind a bit higher trading fees than Saxo, so it is better to invest lump sums less often.

Also if you google andrew hallam (he wrote some nice book about investment and this blog is generally very informative) and sign up via his referral to Internaxx, there are usually some special offers going on, e.g. 20 free trades etc.

 

[TopTacTic]

Hello,
I have exactly the same need to park money <100k and my investigations also led me to a short list with Swissquote and Saxo bank. I may use them for trading but principally I would use them for keeping a balance in Eur and transfer to other accounts...
So, I am ready to use Swissquote but before opening, I would like to be sure that I have correctly understood your conclusions.
Thank you to confirm the relevance of my choice !

 

[Flatworld]

Hello,
I have exactly the same need to park money <100k and my investigations also led me to a short list with Swissquote and Saxo bank. I may use them for trading but principally I would use them for keeping a balance in Eur and transfer to other accounts...
So, I am ready to use Swissquote but before opening, I would like to be sure that I have correctly understood your conclusions.
Thank you to confirm the relevance of my choice !

yes, for parking money~swissquote is better than Saxo

 

[Martin Everson]

Saxo has 0.12% annual custody on total investments.

Saxo has a tiered model. You only get custdoy at 0.12% (+ VAT if your in EU) on VIP account and that's 1m+. Otherwise custody fee is more than double that if you have less than $200k.

yes, for parking money~swissquote is better than Saxo

To be honest I have used both internaxx (swiss quote family) and Saxo because each has products the other doesn't. However for using it to park circa 150k cash there is not much in it either SwissQuote, Internaxx or Saxo would do fine. Me personally I would choose a broker Luxembourg before Switzerland and Denmark.

P.S Don't bring any broker decision down to saving 200 bucks a year in fees...lol.

 

[BlueMist]

Saxo has a tiered model. You only get custdoy at 0.12% (+ VAT if your in EU) on VIP account and that's 1m+. Otherwise custody fee is more than double that if you have less than $200k.

I think it depends on the market? In UAE Saxo has 0.12% min. EUR 5 monthly regardless of the status.... wait they have just changed it:
Classic 0.15 % p.a. min. EUR 5 per month
Platinum 0.12% p.a. min. EUR 5 per month
VIP 0.05% p.a. min. EUR 5 per month

P.S Don't bring any broker decision down to saving 200 bucks a year in fees...lol.

Yes, it doesn't make sense. But with €1m+ invested if someone is charging you 0.12% (Saxo was charing that until very recently), the annual fees are €1200, compared to maximum €180 at Internaxx. For long term investors, who are intending to keep their positions for 20 years, that's €20,000.

The problem I noticed with the brokers that it is sometimes a cat and mouse game. They changed the conditions quite often it seems. Saxo did not have % custody fees as I remember, they were quite fixed. Then they changed it to 0.12% and now this VIP 0.05%... Internaxx/SQ can do the same to switch to % fee, we can just calculate the unpredictable custody fees "as of today".

 

[Martin Everson]

The problem I noticed with the brokers that it is sometimes a cat and mouse game. They changed the conditions quite often it seems

That's true. I read Saxo last financial report where they made a huge loss and said they will be reducing pricing. In a race to the bottom it could turn ugly for these discount brokers. We already seen consolidation in industry with Saxo buying BinckBank and TD Ameritrade and Schwab in merger .

I think it depends on the market? In UAE Saxo has 0.12% min. EUR 5 monthly regardless of the status.... wait they have just changed it:
Classic 0.15 % p.a. min. EUR 5 per month
Platinum 0.12% p.a. min. EUR 5 per month
VIP 0.05% p.a. min. EUR 5 per month

I think your 100% right. I see Saxo pricing here you describe for MENA site:

Commissions, Charges And Margin Schedule

"A fee of 0.15% p.a. is charged on classic accounts, platinum accounts are charged a fee of 0.12% p.a. and VIP accounts a fee of 0.05% p.a."

Then I see on Saxo pricing on International site

Commissions, Charges and Margin Schedule

Classic 0.25%
Platinum 0.20%
VIP 0.12%

Then I see Saxo pricing on UK site.

Stocks Commissions

"A fee of 0.12% p.a. (classic/platinum accounts) or 0.08% (VIP accounts) "

All different pricing...dirty tricksters...lol. Why should I pay 0.12% rather than 0.05% MENA clients pay. That more than 100% markup for same platform .

 

[iloveyouguys]

Good brokers are safe as a bank maybe more. For example, if you use Interactive Brokers you will get SIPC insurance for your assets. You will get $250K insurance for your money and another $250K for your other assets. If you have more money you can use their "Insured Bank Deposit Sweep Program" for cash assets up to $2.5 million. Your money will be insured by FDIC.

Hey, just a warning to you and other readers.

The insurance brokers offer isn't reliable enough.

In an email to Barron’s the head of the SIPC cast doubt on the idea that it would insure checking or savings accounts.
“SIPC protects cash that is deposited with a brokerage firm for one limited purpose...the purpose of purchasing securities,” wrote Stephen P. Harbeck, the president and CEO of SIPC. “Cash deposited for other reasons would not be protected.”

FDIC guarantees your money thanks to backing from the federal government. SIPC will only "work to retrieve" it, and is not a government agency.
SIPC you could lose your money. FDIC you would never lose your money. We're talking under $250k in both scenarios.

Correct me if I'm wrong but it's not a good idea to park your money in IB or other brokers, if you need it to be safe. Especially, considering we've been expecting a crisis.

 

[rowena]

@iloveyouguys
Thanks for the information.

In an email to Barron’s the head of the SIPC cast doubt on the idea that it would insure checking or savings accounts.
“SIPC protects cash that is deposited with a brokerage firm for one limited purpose...the purpose of purchasing securities,” wrote Stephen P. Harbeck, the president and CEO of SIPC. “Cash deposited for other reasons would not be protected.”

I think this is related to specifically Robinhood’s new checking and savings accounts. IB only offers standard broker accounts which are insured by SIPC as far as I know.

Robinhoodâs new checking accounts may not be insured after all

The Securities Investor Protection Corp. says Robinhood never contacted them about offering checking and savings accounts.

www.marketwatch.com