Author Topic: Comparing online trading fees, could somebody check my math/reasoning  (Read 7665 times)

chestwood96

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I am trying to chose a trading platform to invest in ETFs (I have not quite chosen the ETFs themselves jet but that is probably going to be another post).
People around here seem to be recommending Suissquote and Postfinance and I have been looking around for alternatives and found Strateo (with very low fees and a low yearly rate) and Saxo-Money-Bank (no yearly fee and slightly lower fees than Postfinance).
I made a spreadsheet to compare those platforms and where possible created demo accounts and played around a bit.
Strateo had a usable interface but turned out to be liyng to me about the fees wich were 24CHF instead of the advertised 9CHF so that one is out of the game.

Then I tried to reduce the amount of transactions and came up with a trick that might work (I am probably not the one to invent it so maybe somebody can say if it works):
If I am investing in 4 ETFs, I buy them like this:

January:ETF1
February:ETF2
March:ETF3
April:ETF4
May:ETF1
...
     
They ar probably not going to be perfectly balanced but that should work right?

My spreadsheet calculates just the cost of the platform so transaction-fees and platform-fees. (If can be configured for other platforms or investment habits)
The way it looks to me is that Suissquote is the cheapest option until the account contains about 130k (wich is going to take at least a couple years) after that Saxo-Money-Bank is cheaper.
If I invest more than once a month (or multiple ETFs at once) Suissquote is the cheapest the whole time.
That of course assuming they actually have fees that are 9.85 as advertised (they do not seem to have a demo account, just some forex and I do not want to trade currencies)
Postfinance is actually always more expensive than the other 2 (except you trade less than once every month and even then just with a lot of capital).

Is my math and my reasoning correct or did I make some mistake or forget something?

If not it would be logical to go with Suissquote, I could allways transfer the account Saxo after 4 or 5 years (not that Suissquote would make that easy or cheap but it could probably be done) right?

What are you guys using for investing in Switzerland?

[I hope the xlsx as attachment works]

chestwood96

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Re: Comparing online trading fees, could somebody check my math/reasoning
« Reply #1 on: April 23, 2016, 07:20:35 AM »
On second thought I think Saxo is the better idea since I was very conservative in my calculation of how quick I would reach the point where it becomes cheaper, it is problably more 2-3 Years and not >5 wich is what I calculated with.

Also Instead of the montly investment thing I am going to Invest / Rebalance them Quarterly (So I can Invest the dividends and stuff)

Also the moving of assets to a different provider turns out to be more expensive than expected And I still only have 2 Funds that actually interrest me and not 4 wich i calculated with.

zz_marcello

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Re: Comparing online trading fees, could somebody check my math/reasoning
« Reply #2 on: April 24, 2016, 09:24:47 AM »
Hi.

Did you look into Interactive Brokers?
They should be by far cheaper than this.
(Especially if you invest more than $100k; then the monthly $10 fee is waived)

Have a nice weekend


chestwood96

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Re: Comparing online trading fees, could somebody check my math/reasoning
« Reply #3 on: April 27, 2016, 02:27:47 AM »
Hi.

Did you look into Interactive Brokers?
They should be by far cheaper than this.
(Especially if you invest more than $100k; then the monthly $10 fee is waived)

Have a nice weekend

It does look interresting but sadly (or fortunately, yay no capital gain taxes) I live in switzerland where this service does not seem to be available. On the other hand I would propably just throw everything into betterment if I were int the USA.

*points optimism-gun at self*
Well at least this way I learn more about the whole investment thing and I like knowing stuff

Kilbim

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Re: Comparing online trading fees, could somebody check my math/reasoning
« Reply #4 on: April 27, 2016, 12:01:38 PM »
Hi man

I can't help you since i am in your same position.
Can I ask you how much is the sum you would invest each month? So I can see if your math could be good for my case as well.
To keep the maths simple, I want to invest 150 CHF 12 times a year (it's investing 150 CHF, 4 times a year in 3 different ETF)

Thanks and cheers

chestwood96

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Re: Comparing online trading fees, could somebody check my math/reasoning
« Reply #5 on: April 27, 2016, 12:17:58 PM »
Hi man

I can't help you since i am in your same position.
Can I ask you how much is the sum you would invest each month? So I can see if your math could be good for my case as well.
To keep the maths simple, I want to invest 150 CHF 12 times a year (it's investing 150 CHF, 4 times a year in 3 different ETF)

Thanks and cheers

I was just about to answer your question on the other thread.

The interresting part about my spreadsheet is that the ammount is not really relevant (but if you are still interrested I was going with about 1-5k per month depending on how I get my shit together).
Take a look at the other graphs (the x axis is the total value so if you invest less it is just going to move slower on that axis the rest is the same) you can download an play arround with the parameters of the spreadsheet.

Your problem is just that in any case the fees will eat int your money pretty drastically so your UBS fund might not even be that bad of an Idea since the fees are going te eat about 7-16% of your investment upfront wich will even take a 1% difference in expense ratio years to break even.

But I am just starting to figure this out so you might want to wait for the answer of somebody who actually knows what they are doing.

(Also Just out of curiousity why exactly 150 per month?)

Kilbim

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Re: Comparing online trading fees, could somebody check my math/reasoning
« Reply #6 on: April 27, 2016, 01:50:00 PM »
Hi

Yes, it might be that UBS is better, but it still feels sub-optimal...

As for the 150 CHF, I just budgeted all my expenses and savings for retirement and for holidays etc. and that's what I can afford to invest every month. Simple as that

chestwood96

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Re: Comparing online trading fees, could somebody check my math/reasoning
« Reply #7 on: April 27, 2016, 02:13:54 PM »
Hi

Yes, it might be that UBS is better, but it still feels sub-optimal...

As for the 150 CHF, I just budgeted all my expenses and savings for retirement and for holidays etc. and that's what I can afford to invest every month. Simple as that

I will have see how long I can get away without a budget.

Well you are i kind of a wired posittion, I can grudgingly thake the 0.2-0.8% of my investment but 7+% is insane.
Maybe if you just invest/rebalance once a year and/or switch to just one fund. Also you will rarely find the optimal solution you will usually just find the least shit one (Maybe i spend too much time programming).

Also have you looked at TrueWealth? If you can get the 8.5k starting capital this might be a pretty good solution for you (it has a 0.5% management fee aditionally to the TERs of the Products but there are not ransaction fees wich is going to be cheaper than just bying once a year for at leas the first 8 years). I you invest a lot the 0.5% are going to hurt but in your case It might actually be one of the best solutions also it is really foolproof (automatic rebalancing and stuff) and you can just have to send the money to the account and it does the rest.

Kilbim

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Re: Comparing online trading fees, could somebody check my math/reasoning
« Reply #8 on: April 27, 2016, 02:17:18 PM »
Hei, I will look into it, it sounds promising!
THanks!