ETFs don’t save (and indeed increase) costs in long term

Apologists of the passive investment claim: stock ETFs save the costs. Indeed they saved costs as broker fees were high. But now they don't, in fact they increase them! Of course sometimes there is no alternative to an ETF/ETC/ETN, e.g. if you want to invest in commodity market. But if you can buy stocks with low broker fees, you should do it directly.
ETF Apologeten behapten: die Aktien-ETF sparen Kosten. Tatsache ist: die sparten die Kosten, als Brokergebühren noch hoch waren. Aktuell ist es nicht mehr der Fall, langfristig sind die Kosten bei den Aktien-ETF sogar höher als beim Direktkauf. Continue reading "ETFs don’t save (and indeed increase) costs in long term"

HBecker – another star Trader on Wikifolio

Earlier we analyzed the performance of Einstein, a star trader on Wikifolio who has beaten (and continues to beat) the market. There is one more luminary on Wikifolio - and it is HBecker. Formally, Einstein is Number One in terms of absolute returns (by comparable historical drawdown). However, HBecker has even smoother equity curve and much better hit rate. If you still ask, who is better, the right answer is both are better! We summarize the trading history of HBecker and remind you that Wikifolio is an excellent place to learn from experienced traders but a bad place to invest your money unless you can deeply analyze the risks.HBecker Boersenbriefempfehlungen nutzen - equity Curve

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If you got an offer from a Forex Fund Manager

If you got an offer (via a social media) to provide money for an FX managed account and share the profit then you most likely encounter a scammer. However, not always. Recently, we got two offers and by these examples we explain how to distinguish a typical scammer from a trader, who likely does make money. Continue reading "If you got an offer from a Forex Fund Manager"

Screening DeGiro free ETFs

Yesterday we celebrated our first anniversary and mentioned that we are going to make the asset screening as automatic as possible. But it is a long (or at least mid) term project but time and tide wait for no man. Thus we made for you a manual pre-screening of about 600 ETFs that can be traded on NYSE or NASDAQ via DeGiro without broker fees (except the so-called modality payments, which are though negligible).
Continue reading "Screening DeGiro free ETFs"

letYourMoneyGrow.com is one year (and one day) old!

One year ago we launched letYourMoneyGrow.com and we already can report some achievements!
1.  We have created and keep developing our Quantitative Toolbox.  In particular, you will not find suchlike Option Calculator with scenario simulation or mortgage calculator with estimation of the interest rate risk anywhere else.
2. Thanks to Einstein, we disproved the stupid mantra that allegedly "nobody can be better than the market". On the other hand we have shown that many "solid" institutional asset managers and [self-proclaimed] stock market "gurus" cannot beat the market. Thus, only track record matters!
3. We have demonstrated, first of all by the example of IREX, how a quantitative performance analysis can help by investment decisions. At least in case of IREX it was clear that the guy will fail and he recently did!

Our next big goal is to automatize the asset screening as much as possible. Continue reading "letYourMoneyGrow.com is one year (and one day) old!"

Lukas Spang (Junolyst) – neuer Warren Buffett oder nur Glückspilz?

Wir analysieren die Performance eines der populärsten Wikifolios "Chancen suchen und finden" von Junolyst (Lukas Spang, 25 Jahre alt).
Ein gewisses Stockpicking-Talent ist beim Herrn Spang vermutbar, jedoch ist die Performance seines Wikifolios im Wesentlichen durch den allgemeinen starken Bullentrend bestimmt. Hingegen ist seine Trading-Fähigkeit sehr mäßig, seine 2420 Tranksaktionen sind meistens Noise.
Wikifolio "Chancen suchen und finden" (aktuell ca. €9 Mio AUM) stoßt schon jetzt auf die Grenze der Skalierbarkeit. Viele Aktien in Portfolio sind schon überbewertet und bei allen davon ist die Streubesitz-Quote ziemlich niedrig. Das bedeutet: bei fallendem Markt wird dieses Wikifolio (mindestens) ebenso stark fallen, wie es jetzt (bei steigendem Markt) wächst!

Continue reading "Lukas Spang (Junolyst) – neuer Warren Buffett oder nur Glückspilz?"

Numeracy for Traders – Lesson 3 – Ode to Deferred Withholding Tax

Many investment funds and financial services that want your money argue with a deferred capital yield tax. For instance, in Germany if you trade by yourself, you immediately pay the capital returns tax [Kapitalertragsteuer]  (unless the net result of your previous trades is negative). But if you invest in a fund, you don't pay the tax on returns until you sell your share (you still pay a tax on dividends).
We show that though, in general, an investor profits from tax deferral, one should not exaggerate its effect. Moreover, due to annual tax-exempt amounts [Jahresfreibetrag], an immediate taxation can be better than a deferred one. 

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Contango and Cash: the rollover costs are not always prohibitive

As we published our recommendation to invest in commodities, we got a remark that we should not neglect the contango effect and rollover costs. So we analyzed them and came to a conclusion that although the costs of futures rolling (and ETF fees) are not negligible, they are also not so important, compared to the recent movements of commodity prices.

There were ten futures for the nearest months
Roll over, roll over.
And the January futures was to expire
Nine!

Continue reading "Contango and Cash: the rollover costs are not always prohibitive"

Market Spotlight: Pick up Commodities but be picky

Currently the stocks are expensive and the commodities are cheap (though not all of them). We conduct a lite analysis of investment opportunities and construct a mid-term commodity portfolio for a retail investor with €10000+ capital. Continue reading "Market Spotlight: Pick up Commodities but be picky"

R-script for Fixer.io – get FX rates in R for 31 currencies

Even if you are not a Forex trader, it is often necessarily to get currency exchange rates, e.g. if you trade [the options on] foreign stocks.  Fixer.io provides daily FX-rates from European Central Bank for 31 currencies via JSON API. We present a script to get data in R.
Continue reading "R-script for Fixer.io – get FX rates in R for 31 currencies"