The single biggest mistake I see investors make is needlessly complicating their portfolio. I see that happen whenever somebody picks more than 3 funds. I see that happen whenever somebody decides to buy an European index fund along with a Global index fund because “US has too much weight in the Global Fund”. I see […]
Most of the personal finance literature is written from a US perspective and as a result suggests holding US domiciled funds like the SPY, VOO, VTI/VTSAX, VXUS/VTIAX and BND among many others. Due to PRIIPs many European investors can’t access US domiciled funds. Moreover, there are a few US tax traps which make investing in […]
ETF shares are sold and bought through a stock exchange. When you are buying or sell shares of an ETF you are effectively transacting with another investor and not with the Fund Provider (e.g. iShares, Vanguard) through a stock exchange. A stock exchange is a marketplace where multiple investors indicate their desire to buy/sell securities […]
I live in Portugal and I am using DeGiro to buy the iShares Core S&P 500 (distributing), which is domiciled in Ireland. I am buying that ETF in XETRA, a German Exchange. Portugal has tax treaties with Germany, Ireland, the Netherlands and the US. Where do I pay taxes and how much I should pay? […]
Editor’s Note: that this blog post is in relation to the current macro economic outlook of the Eurozone (in February 2019). When that macro economic outlook changes this post may not be relevant. The problem with Eurozone government bonds is that yields are abnormally low. Yield can be understood as the annualized expected income (i.e. […]
Not infrequently I see ETF portfolios which include the following funds: iShares MSCI World iShares STOXX Europe 600 iShares S&P 500 The problem of this portfolio is that it contains different ETFs which hold the same assets. These funds have the following investment strategy: iShares MSCI World – invests in companies of 23 developed countries […]
Life is unpredictable. You may be laid off and be unemployed for a while. You may have an unexpected large medical expense. How do you intend to fund these unforeseen costs when they occur? Which sources of capital do you have readily available to pay for these expenses? This is where an Emergency Fund comes […]
An investment fund is a legal entity that collects money from multiple investors and uses it to follow an investment strategy. There are countless investment strategies that can be used by a fund – from investing in specific asset classes (e.g. bonds, gold, companies) to investing in specific geographies (e.g. China, Europe). An investment fund […]
Investing involves accumulating financial assets which may require you to pay additional taxes. You need to comprehend your taxes so you can be aware of your (tax) obligations and avoid paying unnecessary fines. Additionally, an understanding of taxes allows you to reduce them and as a result increase your returns. The tax laws are different […]
I have read a book on personal finance and I keep seeing mentions to 401(k), IRA and taxable accounts. What are these things? Are these US specific issues? Are there equivalent things in Europe? One important thing to understand in this article is the difference between an investment and an investment wrapper. An investment would […]