Author Topic: Germany: Index funds, general investment questions and hello!  (Read 3467 times)

eralec

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Germany: Index funds, general investment questions and hello!
« on: October 28, 2016, 11:21:56 PM »
Hello!

My first post on this great forum. After I found it I have been reading the last 10 days straight after work and it has been very educational. Thanks already to MMM for this board and his advise along with all the other helpful people. I hope I can give back once my knowledge is more advanced..

My situation is as follows:
  • I am 40 years old & single. Currently living and working (self employed) in Auckland (NZ) but from Germany originally
  • I do own an apartment in Germany that is rented out and about 65% paid off (80k € left to pay)
  • Right now (almost) my entire savings are uselessly lying around on the bank. Part in Germany in € with ~ 190k and part here in NZD with ~ 60k for a total of around 250k USD.
    A small portion of 10k USD I put into individual shares (medical, cannabis, tech) for the last 2 years with realising the gains once above 30% and partly reinvesting
  • No pension scheme set up due to me being self employed

So I was thinking about how to allocate my funds properly and after reading the information here was realising I need to reduce my cash amount drastically. I was thinking of putting 20% in the Vanguard Total Stock Market ETF and another 20% in the Vanguard Total International Stock ETF. Another 10-15% I wanted to invest in individual shares in areas I think could be interesting in the future.
20% I wanted to keep in cash and with the remaining 25% I am unsure..Apart from shares I don't see any investment opportunities. Real estate is extremely overpriced and gold was never on my radar.

My questions are:
What do you think of the allocation?

How do I buy the Vanguard ETFs in Germany or NZ? The closest I could find for Germany is this:
ishares MSCI World Monthly Euro Hedged and potentially ishares Core Dax to mimic the German stock market. The first one comes in cost wise at around 0.55% pa so not really cheap. Do any of the German or NZ board members have recommendations for better tracker funds?

Lastly seeing that the last years have presented an unprecedented rally at the stock markets is it wise to wait for a potential correction (2017? Potential interest rate change finally happening?) before going in or should I go ahead with my plan above now?

Seeing that I live in NZ and also have assets (the apartment) in Germany slightly adds to the complication tax wise for a novice such as myself but that is another topic I need to dive in later.

Any pointers & recommendations are greatly appreciated!
Thank you for taking the time to read this lengthy post

WerKater

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Re: Germany: Index funds, general investment questions and hello!
« Reply #1 on: October 29, 2016, 03:36:02 AM »
Welcome! And well done on collecting a pretty nice nest egg so far.


So I was thinking about how to allocate my funds properly and after reading the information here was realising I need to reduce my cash amount drastically. I was thinking of putting 20% in the Vanguard Total Stock Market ETF and another 20% in the Vanguard Total International Stock ETF. Another 10-15% I wanted to invest in individual shares in areas I think could be interesting in the future.
20% I wanted to keep in cash and with the remaining 25% I am unsure..Apart from shares I don't see any investment opportunities. Real estate is extremely overpriced and gold was never on my radar.
My questions are:
How do I buy the Vanguard ETFs in Germany or NZ? The closest I could find for Germany is this:
ishares MSCI World Monthly Euro Hedged and potentially ishares Core Dax to mimic the German stock market. The first one comes in cost wise at around 0.55% pa so not really cheap. Do any of the German or NZ board members have recommendations for better tracker funds?

You are right that you should massively reduce cash. Don't get too hung up on any particular fund right now. What is efficient is different in every country. Note that everything I am saying here is from a purely German perspective. I can't say anything about international complications.
Vanguard generally is not worth it in Germany as far as I have found. Unfortunately, you won't find find the awesome really low expense ratios in Germany that our American friends enjoy. But you can do much better than 0.55%. About NZ I have no clue.

Others will probably chime in with more fancy proposals (and there is a lot of info about them on the forum). I would always simply suggest to a total market approach. My asset allocation, for example, is this:

- 6 months of expenses in cash (savings account) -- since you are self employed it might make sense to use a higher number
- All the rest is in an 80/20 portfolio:
  -- 20% German government bonds
  -- 80% stock index funds:
      --- 40% Europe (iShares STOXX Europe 600 ; ISIN DE0002635307)
      --- 35% North America (dbx MSCI USA TRN 1C ; ISIN LU0274210672)
      --- 25% Emerging Markets (Comstage MSCI Emerging Markets ; ISIN LU0292107645)

There is nothing particularly magic about the percentages. One more or less percentage point here or there does not matter at all. I'm mentioning the specific funds as examples, but don't try to decide for a particular fund yet -- first figure out whether the AA is good for you generally.
Big question there: What will you do when the inevitable happens, both EU and US stocks lose 20% suddenly (this happens every 4 years or so IIRC), EM uses 30% at the same time? Will you stay the course? Or will you panic and sell everything?
Don't answer quickly -- it's easy to say "I will have nerves of steel", it's not so easy to actually have them when things seem to go to shit.

Once you know which AA you want, here is a good resource for finding funds.

I don't own any real estate.
Are you willing give more numbers on your real estate in Germany? What are the exact mortgage terms, for how much would it sell, what does it bring in in rent? I am asking because I have never yet seen any rental in Germany that seems really worth it compared to stock investments. If yours is, I would be interested in how you came by it ;)

And check out the German thread on this forum.

eralec

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Re: Germany: Index funds, general investment questions and hello!
« Reply #2 on: October 29, 2016, 03:52:33 PM »
Hi WerKater,

Thank you for your advise!

To first answer your question regarding the real estate:
The German property is financed with a mortgage at 4.25% as was the going rate at the time of purchase and does have the option to further reduce the total debt by a one off cash payment of max. 5% pa. So far I have been doing this as you can see that I was otherwise not doing almost any investment and considering the spread between a pretty much 0% interest rate I get for my savings at the bank vs. the mortgage rate it made sense for me to do so.

The puchase price vs current market value has an increase of about 40% conservatively estimated over the last 8 years due to a very good location (that was also boosted by a huge makeover of a nearby public park that I knew was coming), the region I purchased it in doing very well in general and also due to the craziness of todays real estate prices world wide "thanks" to the monetary policy of the central banks.

Ultimately it was also luck as at the time the developer wanted to get rid of the last apartment quickly and I was able to get it as I had already all mortgage arrangements made prior just in case something good comes along. It was all done in about 5 days. For once I was pro active in these matters.

The monthly mortgage is 1100€ and the rental income is 900€.

In regards to reducing the cash portion:
Not having the option of a Vanguard instrument available to us in Germany is really a shame for novice investors like myself. The costs are very moderate and it seems like a maintenance low investment too. I am looking into the possiblity of opening an account with a US broker but it seems to come with tax implications that surpass my knowledge in that area - though I will try and further investigate. I could find a Vanguard fund here but the costs are heftily increased (instead of .05% in the US to .3%) Pretty bad. However most other funds I looked at in Germany also seem to be ranging within roughly .3% so maybe Vanguard is an option after all? I need to find out if they offer the Total stock market fund here.

In case of the government bonds a silly question: Since they generate below 0% rate for the "10 jaehrige Bundesanleihe" what is the purpose of having them a part of the AA? Clearly a novice question - sorry!

The market distribution you mention for the portfolio looks good to me. I might consider a 30% Europe allocation coupled with a 45% North America portion since I have more faith in the North American markets due to the Eurozone being such a fragile political construct. Elections in 2017 in France and other political events like the Brexit this year make the outlook seem more negative than positive to me.

What are the fees for the funds you listed? Will google them after writing this.
Btw is there an online broker you recommend? (flatex, etc.?) Currently I only have an online brokerage account with my German bank with quite high fees as it is tricky to set a new one up while being away from Germany. The joys of living abroad :0

I think I will be able to sit it out. With individual shares I might be more tempted to panic but with total market funds I am more confident of them recovering over time. I do admit however that starting to put the money in now is a difficult proposition seeing that all the indexes trade near all time highs. I have read the linked post of "Bob the worst market timer of all times" but of course it is still a shame I am that late and I do worry the crash is imminent and coupled to a rate increase that has to happen at some point sooner than later.

I did look at the website you linked for picking ETFs and will go through the showcased portfolios. Personally with my admittedly restricted knowledge in these matters tend to prefer funds that are having a high stock component rather than bonds and pensions. Owning a small amount of a company via shares feels better but I will read through the suggestions on their website.

The German thread on the forum is new to me as well. Thanks for the link! Now I need to find one or (once I know more) make one for Germans abroad which brings many additional complications :)

 


frugledoc

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Re: Germany: Index funds, general investment questions and hello!
« Reply #3 on: October 30, 2016, 01:22:49 AM »
You could also ask on the bogleheads forum.  They are good at answering these questions.

Seppia

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Re: Germany: Index funds, general investment questions and hello!
« Reply #4 on: October 30, 2016, 02:01:43 AM »
Hello and welcome to the forum.

Because of European Union, it's very easy and tax efficient to buy Vanguard ETFs actually.
I am in Italy and I buy the Europe Market ETF and the emerging market ETF on the Dutch stock exchange.

Europe: https://www.vanguard.nl/portal/site/institutional/nl/en/detail/etf/overview?portId=9520&assetCode=EQUITY#%23overview

Emerging: https://www.vanguard.nl/portal/site/institutional/nl/en/detail/etf/overview?portId=9507&assetCode=EQUITY#%23overview

I use the ones denominated in euro to avoid currency transaction costs.

These ETFs are called "armonized", which means they make sure you don't pay taxes twice (say, first in Amsterdam and then in Germany)
Keep in mind I'm based in Italy, so there may be some differences.

So you would just have to find a broker/bank that lets you purchase ETFs quoted in Amsterdam.

Otherwise as already pointed out, Blackrock has the ishares series with some good products (slightly higher costs.

Concerning asset allocation, it's really up to you.
In my particular situation (in Italy, making money in euros), I own today very little US stocks, most of my stuff is in Europe.
I'm 15% USA, 70% Europe, 15% emerging.

My normal asset allocation would be more like 40% usa, 45% Europe and 15% emerging, but the high valuations of the USA market and the very strong dollar, coupled with the fact I earn in euros, made me slowly shift my allocation with a bigger home bias.

All of the research based on cape and PB ratios show a very high probability that Europe and emerging are going to outperform the USA in the next ten years.
Add to this the dollar at multi year highs and that's why I'm so underweight USA. 

eralec

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Re: Germany: Index funds, general investment questions and hello!
« Reply #5 on: October 30, 2016, 02:10:37 AM »
You could also ask on the bogleheads forum.  They are good at answering these questions.

Thanks frugledoc! I will have a look there as well

eralec

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Re: Germany: Index funds, general investment questions and hello!
« Reply #6 on: October 30, 2016, 02:57:09 AM »
Hello and welcome to the forum.

Because of European Union, it's very easy and tax efficient to buy Vanguard ETFs actually.
I am in Italy and I buy the Europe Market ETF and the emerging market ETF on the Dutch stock exchange.

Europe: https://www.vanguard.nl/portal/site/institutional/nl/en/detail/etf/overview?portId=9520&assetCode=EQUITY#%23overview

Emerging: https://www.vanguard.nl/portal/site/institutional/nl/en/detail/etf/overview?portId=9507&assetCode=EQUITY#%23overview


Thanks Seppia for your post! I assume it is equally easy then to buy the other instruments like the Vanguard Total Stock Market? What are the fees like pa? Probably higher than similar products in the US?
The funds mentioned by Werkater range between 0.2%-0.6%.
What are costs associated when buying in and selling the funds you mentioned?

I need to check what my bank in Germany offers in comparison to the products you mentioned / what advantages the stock market in Amsterdam has for these funds vs the ones offered in Germany.

All this is quite new to me so initially I was hoping that there is an easy way to replicate MMM advise in regards to Vanguard in Germany or NZ. I have already learned that the fees will not match the very low US ones due to market size I assume. And fees are of course a very big factor with a 10 year plus investment timeline.

In regards to the AA:
Personally with my very limited background feel that an equal or maximum 10% difference between North American & European investment allocation is going more in line with the idea of averaging out. I have a little less faith in Europa's future ability to counter the problems of the Euro and very different economic backgrounds of its member states. But I agree the USD is super high and that makes investing in Vanguard products in USD potentially problematic. I am not sure why the USD did so well over the last years seeing that interest rates there too are low plus of course the sub prime crisis back then etc.


Seppia

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Re: Germany: Index funds, general investment questions and hello!
« Reply #7 on: October 30, 2016, 03:25:18 AM »
Yes you have all the main ETFs that are available in the USA.
Fees are a tad higher, if you check the links I provided you can find the amount. Europe ETF is 0.12%

Grogounet

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Re: Germany: Index funds, general investment questions and hello!
« Reply #8 on: October 30, 2016, 04:08:50 AM »
Three things:

- Consider when/ if you want to go back. You have to consider taxes and tax treaties. They could play for or against you depending on your plans.
- Exchange rate: Same as above, this will also affect your returns
- Lastly, you are invested heavily already in Europe with real estate, why don't start spreading your investment portfolio elsewhere: Asia, NZ, Australia, etc...

It you have ALL your money in Germany / Europe, you take a geographic risk in my opinion.

As mentioned above:
- Keep 3 / 6 months of leaving expenses
- Invest in Europe/US/Asia, in different asset classes too when possible

I'm saying all this as I'm also European, living not far from you (Australia), and have asked my self the same questions :-)

WerKater

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Re: Germany: Index funds, general investment questions and hello!
« Reply #9 on: October 30, 2016, 05:10:22 AM »

Because of European Union, it's very easy and tax efficient to buy Vanguard ETFs actually.
I am in Italy and I buy the Europe Market ETF and the emerging market ETF on the Dutch stock exchange.

Europe: https://www.vanguard.nl/portal/site/institutional/nl/en/detail/etf/overview?portId=9520&assetCode=EQUITY#%23overview

Emerging: https://www.vanguard.nl/portal/site/institutional/nl/en/detail/etf/overview?portId=9507&assetCode=EQUITY#%23overview
It's possible that the situation with Vanguard in Europe improved since the last time I checked. However: I would not give the EU too much credit in making anything tax efficient. Note that both of these funds are "tax-ugly" in Germany (the EM one more so than the EU one): They are domiciled abroad (in Ireland) and they have dividend income that they do not fully distribute -- they retain it partially. If you hold these in Germany, you need to:
1.) pay taxes on the retained part via your tax return every year (OK, that's not so bad)
2.) keep proof that you did this. Forever. Because, once you sell, you will be taxed on the retained earnings as well as on capital gains. You can only avoid that if you can prove that you already paid those taxes in step 1. This might change next year . It might become worse or better. I haven't followed the most recent developments.
For this reason all the funds I hold are either domiciled in Germany or are Swappers (so formally they have no dividend income). But I will have to check again, especially Vanguard. My understanding of all this complicated tax stuff remains incomplete, unfortunately...

The German property is financed with a mortgage at 4.25% as was the going rate at the time of purchase and does have the option to further reduce the total debt by a one off cash payment of max. 5% pa. So far I have been doing this as you can see that I was otherwise not doing almost any investment and considering the spread between a pretty much 0% interest rate I get for my savings at the bank vs. the mortgage rate it made sense for me to do so.

The purchase price vs current market value has an increase of about 40% conservatively estimated over the last 8 years due to a very good location
[...]
The monthly mortgage is 1100€ and the rental income is 900€.
OK, looks like this property has worked out fairly we  for you so far.
Considering that you said you have 80k€ left to pay on the mortgage and it is now 65% paid off, the original mortgage must have been 230k€, so if we conservatively assume that you financed 100% of the property, the current value would be 230k€+40% = 336k€. Assuming my math (and my assumptions) is right, this would give you an income of about 13k€/year or 1100€/month if you sold the property and invested the money in index funds, too. In reality it will be a bit worse because you might have to pay tax on the appreciation. However, it might be worthwhile to look into the possibility of selling the property.

Quote
Not having the option of a Vanguard instrument available to us in Germany is really a shame for novice investors like myself. The costs are very moderate and it seems like a maintenance low investment too. I am looking into the possiblity of opening an account with a US broker but it seems to come with tax implications that surpass my knowledge in that area - though I will try and further investigate.
Considering Seppia's post, maybe Vanguard is a good alternative after all. I will also have to check again. Personally, I will do anything I can in order to stay away from US tax authorities.

Quote
In case of the government bonds a silly question: Since they generate below 0% rate for the "10 jaehrige Bundesanleihe" what is the purpose of having them a part of the AA? Clearly a novice question - sorry!
The question is not silly at all and the whole thing about bonds or no bonds is complicated enough that if fills many threads on Investor Alley. First, my bonds have longer terms (~30 years) and come with a huge yield of about 0.5-0.6% ;-)
The important non-intuitive point is this: In the end, we want a high Safe Withdrawal Rate (SWR). Government bonds certainly decrease the average return of my portfolio. But since they also decrease the volatility, the can actually increase the SWR. Nevertheless, there is also a good case for 100% stocks. But you need even more nerves of steel (see my first post).

Quote
The market distribution you mention for the portfolio looks good to me. I might consider a 30% Europe allocation coupled with a 45% North America portion since I have more faith in the North American markets due to the Eurozone being such a fragile political construct. Elections in 2017 in France and other political events like the Brexit this year make the outlook seem more negative than positive to me.
In my opinion, this is tea leaves reading ;)
Nevertheless, you will probably be fine with either AA.

Quote
What are the fees for the funds you listed? Will google them after writing this.
If my notes are correct, 0.2%, 0.3% and 0.25%. justETF probably has more up-to-date values.

Quote
Btw is there an online broker you recommend? (flatex, etc.?) Currently I only have an online brokerage account with my German bank with quite high fees as it is tricky to set a new one up while being away from Germany. The joys of living abroad :0
I currently use Consorsbank. Comdirect and ING-DiBa should be similarly priced. I recall flatex more geared towards traders (with serious discounts if you do lots of transactions) but maybe that has changed: I just checked their website and they seem a bit cheaper that Consorsbank. But I haven't checked the terms carefully.

Quote
I think I will be able to sit it out. With individual shares I might be more tempted to panic but with total market funds I am more confident of them recovering over time. I do admit however that starting to put the money in now is a difficult proposition seeing that all the indexes trade near all time highs. I have read the linked post of "Bob the worst market timer of all times" but of course it is still a shame I am that late [...]
You might be late, but by waiting, you will be later ;)
Nevertheless, don't rush it. Know what you are doing. And it is absolutely not a shame to start slowly. It is not be perfect from a purely mathematical point of view but psychology is important. My suggestion would be this (step by step):
- Figure out what your Asset Allocation will be. This is important. The plan is to stick with it forever! No tinkering based on feelings about this or that market.
- Then figure out which funds to use and how and where to buy them.
- The start buying slowly. Each month invest whatever you save and a part of your cash stash. While it is not ideal from a total return standpoint, it is better than not doing anything because you think a crash might be coming.
- Eventually, a correction or a crash will come. When? I have no clue. Neither do you. Neither does anyone else, whatever they say.
- Once the crash comes (and what comes now is the key) you: Keep doing exactly what you were doing. Each month invest whatever you save and a part of your cash stash (until the latter is gone).
- Keep doing this.
- Once the next crash comes you will have nerves of steel because you have been through this before and it worked out OK.
- Keep doing it more.



 



Seppia

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Re: Germany: Index funds, general investment questions and hello!
« Reply #10 on: October 30, 2016, 05:51:53 AM »
WerKater, thanks for the great post.
I am amazed that there's one area where Italians have a simpler regulation VS Germany.
In Italy, our bank automatically pays taxes on the dividends or capital gains that you get, a flat 26%.
While I think this is stupid in the sense that it doesn't differentiate between investing and speculating (like the USA does with the long/short term capital gain rule), it's at least very simple.

Concerning vanguard ETFs in Europe, what do you mean when you say that retain part of the dividends? I see the ETFs set up as "distributing", which should mean they distribute all dividends.
Also, at a very superficial glance (so take this with a kilo of salt) it seems that the dividend yield of the ETFs match the yield of the index.

WerKater

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Re: Germany: Index funds, general investment questions and hello!
« Reply #11 on: October 30, 2016, 08:04:07 AM »
WerKater, thanks for the great post.
I am amazed that there's one area where Italians have a simpler regulation VS Germany.
In Italy, our bank automatically pays taxes on the dividends or capital gains that you get, a flat 26%.
While I think this is stupid in the sense that it doesn't differentiate between investing and speculating (like the USA does with the long/short term capital gain rule), it's at least very simple.
You're welcome! I hope I got everything right; my understanding is really not perfect...
(and Germany is very good at having insane regulations, believe me...)

The idea is actually the same in Germany as in Italy, even the tax rate is almost identical (26.375%). And it works fine if you simply hold stocks (same as in Italy, I assume). It also works fine if you have truly distributing funds (which always distribute all dividends).

But if a fund retains earnings, then you must also pay taxes on those earnings in the current tax year (via your tax return).
Once you sell, you must take care not to pay taxes on them again: Let's say:
- you bought one share at a price of 100€ at the end of 2015
- it earns 1€ (and retains it) in 2016. Your tax bill for that is 0.26€ -- to be paid via the 2016 tax return.
-  and in the beginning of 2017 you want to sell it.
Let's assume there were no course gains eept for the 1€. The share is now worth 101€. Your tax bill for that should be zero. And it is, if you can prove that the gain is only due to retained gains that you already paid taxes on. That's probably fine in this simple case. It becomes interesting when I'm selling 30 years after buying. Do I still have all the documentation? Did the fund ever change its name? Fusioned with another one? What if I have died in the meantime or become mentally incapacitated and it's suddenly my heirs' job to make sense of this shit?

Quote
Concerning vanguard ETFs in Europe, what do you mean when you say that retain part of the dividends? I see the ETFs set up as "distributing", which should mean they distribute all dividends.
Also, at a very superficial glance (so take this with a kilo of salt) it seems that the dividend yield of the ETFs match the yield of the index.
You are right, they are supposed to be fully distributing. Sort of...
The attachment shows a part of the taxation metrics of this fund in Germany. I have it from the official source of the federal government for this sort of stuff (click the first link "Besteuerungsgrundlagen für das am 30.06.2015 endende Geschäftsjahr" and search for the ISIN IE00B3VVMM84. There are multiple hits because of multiple distributions and the end-of-business-year "Thesaurierung" -- which actually means "retainment of earnings").

The evil part is the line "Betrag der ausschüttungsgleichen Erträge (§ 5 Abs. 1 S. 1 Nr. 2 InvStG)" -- that is retained earnings.
When their business year ended on 2015-06-30, they "retained" earnings of 0.30USD per share. You are right, they do actually distribute these -- sometime in the next business year. It is my understanding that from the point of view of view of German tax authorities this is in fact a retained earning. Leading to all the problems I described above.
It is possible that I am wrong in this particular case and that the delayed nature of the distribution (earning in one business year, distribution in the next) is not actually a problem and will be handled reasonably automatically. But I am not willing to bet on it if the risk is either committing unwitting tax evasion or paying the tax twice. Not if I have the alternative of buying Comstage or db x-trackers funds that are Swappers and don't have this problem.

eralec, I apologize for hijacking your thread a bit (although this is maybe also relevant for you). I promise not to continue this particular discussion point unless you want it.

eralec

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Re: Germany: Index funds, general investment questions and hello!
« Reply #12 on: October 31, 2016, 12:45:41 AM »
eralec, I apologize for hijacking your thread a bit (although this is maybe also relevant for you). I promise not to continue this particular discussion point unless you want it.

Absolutely fine. Please continue. I am very happy to learn.

In regards to all the information already provided I will go through it tonight and tomorrow. Thank you to everyone helping out by sharing their knowledge! What an amazing forum! Will be writung again with a few more questions soon I am sure. As they say: The devil is in the detail :)

BobTheBuilder

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Re: Germany: Index funds, general investment questions and hello!
« Reply #13 on: October 31, 2016, 10:19:50 AM »
Hey eralec,

living in Germany myself, I recently started fooling around with some individual stocks and traded on comdirect.

I would not recommend FlatEx for serious investing. FlatEx did leave the German deposit protection fund and now only up to 100.000€ cash (EU standard) are insured in case the bank gets into trouble. Although stocks are not cash, the broker seems a bit fishy to me because of that in general. It also employs only around 20 people and has limited capital. Source: wikipedia and some trustworthy finance sites.

Comdirect offers some 80 "special" ETFs with only 1,5€ to 3,9€ per order (or some very small percentage for high volumes) depening on whether you invest periodically or one-time. It is not the cheapest offer in the market for individual trades, but has much higher deposit protection and quite a nice user interface.

Given the state of the (European) Union, I would also advise to diversify around the world.

Seeing the nice returns on your apartment, I wonder how much you realize the German housing market is going up like mad, especially for apartments in big cities. At some point during the next 1 or 2 years you might see the peak of it :-)

Hope I could add something to the discussion!


eralec

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Re: Germany: Index funds, general investment questions and hello!
« Reply #14 on: November 20, 2016, 12:04:54 AM »
Thanks for all the info! I just wanted to say I very much appreciate the advise and time everyone takes to reply! I am still going through all the infos provided. Every time I think I am half way done with a certain topic or specific investment example I realise I have 10 more tabs open in my browser with more questions or specific terms that I need to google :)

Also the earthquakes in NZ kept us busy this week as we realised that we need to get some emergency provisions ready in case the next one hits us in Auckland. Been pushing this out for way too long!

In regards to the real estate I own I am currently looking into scenarios if it would be better to sell now and use the money for passive investment(s). Not sure yet though as I like the idea of having the diversification of passive investment in something like the world index etf etc. plus some real estate. On the other hand the interest rates won't stay that low forever and at some point I wonder if the prices / interest in real estate will decrease. Will see. Might put it on the market and see what we could get. Also I almost had a great investment opportunity in Germany (land that was sold by some heirs) that took a lot of my free time to get into in terms of valuations which unfortunately in the end didn't happen as we were too slow.

Once I have more of a plan will post again in case somebody is interested (and probably with a few more questions)

Cheers!