Poland - 29y, long term ETF portfolio

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Topic Author
markubik
Posts: 12
Joined: Sun Jan 10, 2021 5:35 am

Poland - 29y, long term ETF portfolio

Post by markubik »

Hi, I'm a 29 years old programmer from Poland. I'll try my best to fit the template provided, but I will also add some personal info (mostly regarding my character as it's an important factor in my decisions :)). So let' s start:

Country of Residence: Poland. There is an option not to pay any taxes while using financial market assets (Retirement Account called IKE - I'll explain it later)

International Lifestyle: I prefer to stay in Poland, but if any interesting opportunity occurs, I will be interested in moving to a different country - I want to be agile in this area, being a programmer certainly helps. As for retirement - no idea.

Currency: Right now my account is in EURO, but I will provide my plan in Polish Zloty (PLN) - right now 1 EURO is roughly 4,51 PLN. But I'll try to use more absolute units so hopefully it want matter.

Emergency funds: 6*money I'm earning in a month.

Debt: 50,000 PLN that I own to my parents (they helped me buy a flat) - as it is within family, I can pay it off whenever I can.

Age: 29 years, single

Desired Asset allocation: Still to be decided, but as I am relatively young, at least for 5 years I probably want to put nothing in bonds (and also diversify using other classes of assets, like gold, crypto, real estate etc.) - it will probably change a couple of times in the closest future, I'm still learning :)

As I mentioned I am a programmer, so it means it gives relatively high income, but on the other hand there is a risk, that due to ageism (and new technologies coming every year) my later years in the field may not be as good as they are now. So I'm trying to mitigate that risk by putting as much as I can and let the money work for me. If it won't be the case and I will continue to have a good job in IT field till the retirement - even better :)

Polish Taxes works like this - for every income on the financial market (stocks, bonds, ETFs, dividends, gold, crypto etc.) there is 19% tax that has to be payed while cashing out the assets. There are some ways to mitigate this - the one I'm using and honestly the easiest one is the aforementioned IKE (Indywidualne Konto Emerytalne - Individual Retirement Account), that allows to skip the taxes completely. But of course the are rules to that - the money can be used only after I'll be 60 years old or older and there is a yearly limit of how much money can be put in that kind of account - it varies between years, in 2020 it was around 16,000 PLN, 2021 - 17,000 PLN (and probably it will grow in the future). Other assets,as mentioned will have 19% tax.

So coming to my portfolio - I know that one of the main things in good investment planning is knowing myself, so John Bogle's advice, transformed by my character, willingness to take risk and current situation looks like this (100% is all I want to use for investing):
- 70% - ETFs
- 10% - gold
- 10% - crypto
- 10% - stock-picking, "once in a lifetime opportunities", "become rich in 3 simple steps" and all this kind of things that probably won't help much long term, but it will help me satisfy the eager and impatient part of me. That's a sacrifice I'm planning to make in order to help myself dealing with the standard "my friend bought Tesla stocks and now he's rich while you're trying this boring ETFs". I'm aware it's not the optimal way to think about the assets, but as I've mentioned - I know myself, so I need to take it into account.

I started using ETF last November (2020) - I wasn't particularly sure that my decisions were the best ones but at least I understood that buying "just good ETFs" instead of "the best ETFs" is way better than doing nothing at all. So I created my IKE account (no tax, if used when 60 years old - really motivates to think long term :)) and I allocated my assets there like this (rough estimates):
- ISHARES CORE S&P 500 UCITS (CSPX) - 60%
- iShares Core MSCI Emerging Markets IMI UCITS ETF (EMIM) - 40%

I've chosen this two ETFs mainly because the fees for them are one of the lowest (0,07% for CSPX and 0,18% for EMIM). After some reading I've realized I'm overweighting US and emerging markets instead of goind for the world index - I will probably use iShares Core MSCI World UCITS (IWDA) - with 0,2% fee. So, yet again, I know that having just IWDA would be better than picking more region-oriented ETFs, but I want to have that kind of exposure (US because of current state and emerging markets because of the hopefully good future), so my idea is:
- 60% - IWDA
- 20% - CSPX
- 20% - EMIM
(all of them accumulates dividends)

But that's just the tax efficiency mechanism, where I can put only some amount of money every year - I will probably be able to do it in the first 3 months of every year. That leaves me with 9 months of income that I will use the 19% taxed ETFs. As mentioned in global overview of my portfolio, I still prefer to use ETFs heavily. So, finally, the doubts I have:
- Should I continue to use the same aforementioned ETFs outside of the IKE account or try to do something else? I was also thinking about REITs in this area, but honestly the more I learn, the less I know, so maybe the solution (from the programming world) "KISS - Keep It Simple Stupid" is the best one?
- Is this IWDA/CSPX/EMIM separation reasonable? I've read some threads that index tracked by IWDA has almost all of the stocks that are in CSPX (S&P500) so it may not be the best idea. But again, for me it's kind of "mental accounting" to have some more region-oriented assets.
- Does the fact that I'm earning quite a lot right now but it may not be always the case should make my investment decision any different? By saying "job-related problems in the future" I mean (hopefully) that I won't be able to add any money to my investments, not that I will have to spend the money.

Quite a long post, hopefully I fulfilled all the rules mentioned. Thanks for the opportunity to post my doubts here - it really is a great community and I only wish I found this forum earlier :)
krasnall
Posts: 52
Joined: Wed Sep 16, 2020 10:37 am

Re: Poland - 29y, long term ETF portfolio

Post by krasnall »

Cześć! First of all, you did you research and you already are on a good path :)

Figuring out how to be a tax efficient investor is important. In the Polish context that usually means maxing out on IKE contributions (have a spouse? max on 2 IKEs). There are only 2 possible traps: 1) the government will somehow alter the rules and IKE account will become less efficient or even inefficient (for example: IKE assets would mean a lower state pension) and 2) you will move to a different country (and retirement account wrappers are not recognized between countries - even in the EU). My solutions to avoid those possible traps are: using a cheap broker for IKE (but right now there is not much difference between BOŚ and mBank, but watch out for possible custody fees in the future), limiting my IKE holdings to 20% of my portfolio value (limiting the risk of the gov't seriously attacking our savings) and holding only accumulating funds (a move to a country that doesn't see through the accumulating fund would be tax neutral, and I can come back to Poland when I turn 60 to sell tax free). You are probably aware there are also IKZE accounts available in Poland, but depending on your income tax rate they might not be such a great deal (I pay <10% so they are not).

For the rest of the investments make sure you always buy accumulating funds as from a perspective of a long term buy and hold investor in most EU countries they are much more tax efficient.

You mention you'd like to get a higher exposure to the US and EM markets. Do you have good reasons why you want to do that? If yes, then the selection of ETFs you gave is not a bad choice (although a swap based ETF for S&P 500 would be better, since it doesn't suffer from dividend tax leakage, examples: IE00B3YCGJ38, IE00BMTX1Y45, in IKE even the GPW-listed Lyxor ETF would do, but only in IKE since it's distributing dividends). In my opinion, over weighting the US market doesn't make a lot of sense but would be acceptable, however over weighing EM is quite risky and there is not much evidence that EM risks (rule of law, environmental issues, treatment of foreign investors, corruption, state interventions) are compensated with greater returns. However, a slight over weight like 20% would be acceptable.

While IWDA (MSCI World) does not hold EM stocks, it's 60% US. A 60% World / 20% US / 20% EM portfolio means you are slightly under weighting Europe and Japan and slightly over weighting US and EM. Again, if you don't have strong reasons to do that I would go for simplicity and invest in a single ETF like VWCE (VWRA on LSE).

The question of how much to put in the "fun money" part of your portfolio (individual stocks, crypto) is very personal. I personally don't hold any speculative (non investment) assets like crypto or metals and don't hold individual stocks, but if I did, I would limit my stock picks to maybe 10% and speculative instruments to not more than 5%. But that's highly personal.

You also mentioned alternative asset classes like REITs - I'm not sure if you mean REITs as funds/ETFs or straight real estate investment. In my opinion REITs are not that great, due to their tax inefficiency and high costs. Straight real estate investment might be a good idea if you can get mortgage with a low down payment. Otherwise real returns from rent are close to 4-5% in most Polish cities, and the inflation-adjusted price index of apartments in Polish cities shows that asset appreciation is more a myth than reality (due to inflation).

I think your idea to save as much as possible now is great. I also work in an industry where my future saving potential might diminish, so I'm focusing on working and saving as much as I can now, while still living a good life. Current low overall income taxation in Poland (if you are self employed) helps a lot and who knows how long it will last.
mrekvy491
Posts: 58
Joined: Wed Jul 29, 2020 10:43 am

Re: Poland - 29y, long term ETF portfolio

Post by mrekvy491 »

Welcome to the forum, and thanks for sharing! It is always interesting to see how tax systems work in neighboring countries. Also interesting to see how people in other professions think about accumulation.
- Is this IWDA/CSPX/EMIM separation reasonable? I've read some threads that index tracked by IWDA has almost all of the stocks that are in CSPX (S&P500) so it may not be the best idea
I just have one questions regarding the weighting. Is there any specific reason you want to go underweight Europe? It could be better to go with the world-cap weighted ETFs.

I think we tend to be more pessimistic about the market we know well. In your case European market.

I have that issue with Asian, especially the Korean stock market. I read too much of the local news, which makes me feel like I never want to invest in Korean stocks. But thanks to having VWCE, I was able to get the gain from the recent boom.

I don't think it will be a big issue if you have a clear reason behind the allocation. But with such a tilt, you may end up tinkering with your portfolio as the market situation changes. So I would recommend the KISS approach.

But I think the most important thing is that you keep saving, and stay invested. I believe most of the hot debated topics related to AAs and tilts won't really affect the end results so much.
Topic Author
markubik
Posts: 12
Joined: Sun Jan 10, 2021 5:35 am

Re: Poland - 29y, long term ETF portfolio

Post by markubik »

krasnall wrote: Sun Jan 10, 2021 11:37 am Cześć! First of all, you did you research and you already are on a good path :)
Hi! Thanks for the encouragement - it means a lot to me as the 2020 was the year I was trying to learn and by the end of it I'm still unsure if I understand and know anything. So it really, really helps to get a feedback :)
krasnall wrote: Sun Jan 10, 2021 11:37 am Figuring out how to be a tax efficient investor is important. In the Polish context that usually means maxing out on IKE contributions (have a spouse? max on 2 IKEs). There are only 2 possible traps: 1) the government will somehow alter the rules and IKE account will become less efficient or even inefficient (for example: IKE assets would mean a lower state pension) and 2) you will move to a different country (and retirement account wrappers are not recognized between countries - even in the EU). My solutions to avoid those possible traps are: using a cheap broker for IKE (but right now there is not much difference between BOŚ and mBank, but watch out for possible custody fees in the future), limiting my IKE holdings to 20% of my portfolio value (limiting the risk of the gov't seriously attacking our savings) and holding only accumulating funds (a move to a country that doesn't see through the accumulating fund would be tax neutral, and I can come back to Poland when I turn 60 to sell tax free). You are probably aware there are also IKZE accounts available in Poland, but depending on your income tax rate they might not be such a great deal (I pay <10% so they are not).
Yup, I'm having and IKE in BOŚ Bank right now, I'm also thinking about IKZE - but I decided that until I don't know much, I won't mess with taxes too much and I wanted to have 2020 low-effort in terms of taxes - so I decided to leave IKZE for now. Right now I have 2020 IKE maxed out and a bit of cash in index funds (inPZU). This year (2021) I want to both learn and invest in more "complex" stuff (although I will still try to keep it as low effort as possible). Hence I will probably use IKZE as well.
It may be too optimistic, but even with the full usage of IKE I want it to be no more than 30% of my whole ETF portfolio - I'm planning to put as much as possible at the beginning of every year in IKE and then for the rest of the year I will try to balance investments between other ETFs/gold/stock etc. That's why it is so important to me to choose ETFs on IKE wisely :)

krasnall wrote: Sun Jan 10, 2021 11:37 am For the rest of the investments make sure you always buy accumulating funds as from a perspective of a long term buy and hold investor in most EU countries they are much more tax efficient.
I agree - having acccumulating ETFs is key for me as it allows better management of the assets. On the other hand I'm thinking about having some part of the portfolio in index funds so I can use them every year to pay the rent and stuff like that - I've read that it takes care of all the tax related things. But it's just an idea - nothing is decided yet.
krasnall wrote: Sun Jan 10, 2021 11:37 am You mention you'd like to get a higher exposure to the US and EM markets. Do you have good reasons why you want to do that? If yes, then the selection of ETFs you gave is not a bad choice (although a swap based ETF for S&P 500 would be better, since it doesn't suffer from dividend tax leakage, examples: IE00B3YCGJ38, IE00BMTX1Y45, in IKE even the GPW-listed Lyxor ETF would do, but only in IKE since it's distributing dividends). In my opinion, over weighting the US market doesn't make a lot of sense but would be acceptable, however over weighing EM is quite risky and there is not much evidence that EM risks (rule of law, environmental issues, treatment of foreign investors, corruption, state interventions) are compensated with greater returns. However, a slight over weight like 20% would be acceptable.
I will be humble here - there is very little reasoning why I want to have that kind of exposure. Probably it's just me trying to be smart, thinking like "well, US is great now and probably countries like China/India will be great in 20 years", so I want to overvalue them in my portfolio. But no other reasons apart from it. So if you think overvaluing emerging markets is too much of a risk, I will definitely reconsider my choices.

krasnall wrote: Sun Jan 10, 2021 11:37 am While IWDA (MSCI World) does not hold EM stocks, it's 60% US. A 60% World / 20% US / 20% EM portfolio means you are slightly under weighting Europe and Japan and slightly over weighting US and EM. Again, if you don't have strong reasons to do that I would go for simplicity and invest in a single ETF like VWCE (VWRA on LSE).
Whoah, I didn't know that - looks like I need to dive deep into indexes, just "whole world ETF" won't do. Thanks for the tip - if I'm already overweighting EM and US, having additional ETF that does the same probably will not be good. I'll read about this index a bit more but looks really promising (although it's quite young as I can see) - the fee is 0.22% and it is available for the IKE in BOŚ.

krasnall wrote: Sun Jan 10, 2021 11:37 am The question of how much to put in the "fun money" part of your portfolio (individual stocks, crypto) is very personal. I personally don't hold any speculative (non investment) assets like crypto or metals and don't hold individual stocks, but if I did, I would limit my stock picks to maybe 10% and speculative instruments to not more than 5%. But that's highly personal.
This will probably vary over time - having many geeks as friends it is really hard not to try with Bitcoin/Ethereum/other cryptos and tech-related stocks. I will have to check my character - but probably letting off steam with a bit of crypto/technology madness will be necessary :)
krasnall wrote: Sun Jan 10, 2021 11:37 am You also mentioned alternative asset classes like REITs - I'm not sure if you mean REITs as funds/ETFs or straight real estate investment. In my opinion REITs are not that great, due to their tax inefficiency and high costs. Straight real estate investment might be a good idea if you can get mortgage with a low down payment. Otherwise real returns from rent are close to 4-5% in most Polish cities, and the inflation-adjusted price index of apartments in Polish cities shows that asset appreciation is more a myth than reality (due to inflation).
My opinion on that changes basically every week - sometimes I think REITs as ETFs are better, sometimes I think buying a small apartment and renting it is great idea. I definitely need to read more. But on the other hand - probably right now it's a good time to buy, many people are selling their investment apartments, so there is a lot of opportunities. Meh, being emotional when it comes to that kind of topics is really not easy :)
krasnall wrote: Sun Jan 10, 2021 11:37 am I think your idea to save as much as possible now is great. I also work in an industry where my future saving potential might diminish, so I'm focusing on working and saving as much as I can now, while still living a good life. Current low overall income taxation in Poland (if you are self employed) helps a lot and who knows how long it will last.
I'm still not self-employed - although it makes my taxes really high, I struggle to make that step - probably generations of ancestors, for whom the full-time employment meant "you are succesful" left a mark on me :P But that's one of additional decisions I have to make, that will probably greatly improve my investment opportunities.

It's really refreshing to read that my ideas, although they can be obviously improved, are not a complete mess - not many people I know follow that path so having someone that "knows stuff" is great :)
Topic Author
markubik
Posts: 12
Joined: Sun Jan 10, 2021 5:35 am

Re: Poland - 29y, long term ETF portfolio

Post by markubik »

mrekvy491 wrote: Sun Jan 10, 2021 1:11 pm Welcome to the forum, and thanks for sharing! It is always interesting to see how tax systems work in neighboring countries. Also interesting to see how people in other professions think about accumulation.
Hi! Great to have something valuable to add - right now I'm satisfied with my income so I can use accumulating strategies. If in the future this will change (hopefully it won't :)) I will have to adjust my strategy.
mrekvy491 wrote: Sun Jan 10, 2021 1:11 pm
- Is this IWDA/CSPX/EMIM separation reasonable? I've read some threads that index tracked by IWDA has almost all of the stocks that are in CSPX (S&P500) so it may not be the best idea
I just have one questions regarding the weighting. Is there any specific reason you want to go underweight Europe? It could be better to go with the world-cap weighted ETFs.

I think we tend to be more pessimistic about the market we know well. In your case European market.

I have that issue with Asian, especially the Korean stock market. I read too much of the local news, which makes me feel like I never want to invest in Korean stocks. But thanks to having VWCE, I was able to get the gain from the recent boom.

I don't think it will be a big issue if you have a clear reason behind the allocation. But with such a tilt, you may end up tinkering with your portfolio as the market situation changes. So I would recommend the KISS approach.

Well I agree with basically everything you've mentioned - I am a bit pessimistic about Europe and really optimistic about Emerging Markets, especially when I'm planning to go long-term. But of course it may be just my bias. Apart from that - no specific reasons, just my inexperience and hard-to-shake belief I know better :P VWCE looks promising, I will read more, especially about cap- vs weighted ETFs - I have some gaps in knowledge in that matter.
mrekvy491 wrote: Sun Jan 10, 2021 1:11 pm But I think the most important thing is that you keep saving, and stay invested. I believe most of the hot debated topics related to AAs and tilts won't really affect the end results so much.
Exactly - that sums up all my doubts - having a good/average portfolio is worse than having a great portfolio but it's way way better than not having any portfolio at all and just keeping money in a bank account :) I know I will make some errors in the years to come but I'm trying to balance between "fake it till you make it approach" and knowing that "the sooner you start the better - compounding is your friend".

As they've said - investing is simple, but not easy. Now I understand it completely :)
krasnall
Posts: 52
Joined: Wed Sep 16, 2020 10:37 am

Re: Poland - 29y, long term ETF portfolio

Post by krasnall »

It looks like you just need a bit more time to process all the information and come up with an investment policy that you will be able to stick to.

One word about inPZU funds. If you are talking about inPZU Akcje Rynków Rozwiniętych, this fund attempts to track MSCI World Index (hedged to PLN) in 90% and short term bonds in 10%. The TER is 0.68%, which is high, but lower than anything else in Poland (and that fund is probably the only broad index mutual fund available). I have two issues with this fund:

1. It is hedged to PLN. It might make sense for someone investing in the short term (but who would go 90% equities in a short term?) but the common opinion here is that one shouldn't hedge equities. I agree with that, especially because PLN rate is somewhat correlated with major markets (when markets go down, PLN goes down). In my test, MSCI World index hedged to PLN had a 3 percentage points higher volatility in the last 11 year, compared to unhedged MSCI World index reported in PLN.

2. It suffers from a performance drag, perhaps due to currency swaps (used for hedging) or other reasons. In my analysis, inPZU Akcje Rynków Rozwiniętych underperformed 90% MSCI World hedged to PLN + 10% short bonds by around 1.6 percentage points per year on average, as measured between 06.2018 and 10.2020. When you look at the graph it shows the fund following the index closely, but suffering from a constant drag.

Image

Is that fund really bad? Well, for someone who is just starting, doesn't want to dig into ETFs, it's probably OK. But I wouldn't put any serious money in there.

On the other hand, a global bond fund (inPZU Obligacje Rynków Rozwiniętych) is actually quite decent. A bit more expensive than AGGH, but it's hedged to PLN, not EUR. It might be an advantage to some people, at least for a part of their bond allocation.
Topic Author
markubik
Posts: 12
Joined: Sun Jan 10, 2021 5:35 am

Re: Poland - 29y, long term ETF portfolio

Post by markubik »

Sorry for the late response, a lot is happening right now
krasnall wrote: Sun Jan 17, 2021 2:04 pm It looks like you just need a bit more time to process all the information and come up with an investment policy that you will be able to stick to.
You're right, I'm still struggling with finding the strategy that would allow me to both compound and sleep well at night :) Hopefully I want to fully decide everything by the end of this year. Now I'm trying multiple approaches and I'm verifying, what I can afford in terms of psychology :P
krasnall wrote: Sun Jan 17, 2021 2:04 pm On the other hand, a global bond fund (inPZU Obligacje Rynków Rozwiniętych) is actually quite decent. A bit more expensive than AGGH, but it's hedged to PLN, not EUR. It might be an advantage to some people, at least for a part of their bond allocation.
Right now I'm having both - Akcje Rynków Rozwiniętych and Obligacje Rynków Rozwiniętych, but for almost whole previous year I had only the former. It was basically the easiest for me to start with it, I invested March 2020 and I actually have some return, but of course I know this is just anomaly (due to COVID). But I will be doing some changes in there - the platform is quite simple so it is quite straightforward to me

And interesting thing is that, although I was obviously aware of the hedging concept, it was Your comment that made me read more and understand it in-depth(ish). And it looks like it is quite an important topic to consider while deciding, what to choose. So thanks for that, yet again it happens that when you ask, you learn a lot :)
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dziuniek
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Re: Poland - 29y, long term ETF portfolio

Post by dziuniek »

I mean I would continue putting money into the IKE account. The reason being:

- even if you retire early becasue you have a lot of assets outside of IKE(retirement account) you'll still need money for when oyu're 60+ years old.

Obviously it's hard to guesstimate the future, but some sort of a mix of a taxable account and IKE might make sense for you.

So Bucket 1 - taxable account for say early retirement(40, 50?) to 60yrs old.

Bucket 2 - IKE for 60+. Unless you're planning on leaving the country - as someone mentioned, the tax-advantaged wrapper disappears if you plan ot retire elsewhere. (Subject to check)
Get rich or die tryin'
Topic Author
markubik
Posts: 12
Joined: Sun Jan 10, 2021 5:35 am

Re: Poland - 29y, long term ETF portfolio

Post by markubik »

dziuniek wrote: Tue Feb 02, 2021 7:50 am I mean I would continue putting money into the IKE account. The reason being:

- even if you retire early becasue you have a lot of assets outside of IKE(retirement account) you'll still need money for when oyu're 60+ years old.

Obviously it's hard to guesstimate the future, but some sort of a mix of a taxable account and IKE might make sense for you.
Exactly, that's what I'm planning to do. I plan to max out IKE/IKZE every year as soon as possible and then the rest of my investments will go to other assets through other, cheaper, international broker. Right now I think I have a final idea for 60+ accounts, I'll explain them in next post. Other stuff (taxed ETF, stocks, bonds, gold, crypto etc.) will be decided in 2 or 3 months, when I have more knowledge :)
So Bucket 1 - taxable account for say early retirement(40, 50?) to 60yrs old.
dziuniek wrote: Tue Feb 02, 2021 7:50 am Bucket 2 - IKE for 60+. Unless you're planning on leaving the country - as someone mentioned, the tax-advantaged wrapper disappears if you plan ot retire elsewhere. (Subject to check)
Yup, I don't know how it works in terms of changing the country of residence - I can assume that the "only" requirement is paying taxes in Poland. I'll check that.
Topic Author
markubik
Posts: 12
Joined: Sun Jan 10, 2021 5:35 am

Re: Poland - 29y, long term ETF portfolio

Post by markubik »

Ok, after some brief consideration and verification of what is doable and hopefully smart, I came down to something, that I can call my own idea :) Right now it is only related to retirement accounts, I will be deciding, what to do with the rest of my money in the following months, so probably I will be posting here as well :)

Quick recap - in Poland there are 2 retirement accounts, IKE and IKZE. Limits per year:
IKE - 16k
IKZE - 5,2k
There are other rules, but these are the most important.
So, knowing what are available ETF at my broker (BOŚ Bank), knowing mysefl and being confident I will be able to persist with the approach I decided to split my investments as follows:
- IKE -
100% VWCE (TER 0,22%)
https://www.justetf.com/en/etf-profile. ... 00BK5BQT80
- IKZE -
70% IUSN (TER 0,35%)
https://www.justetf.com/en/etf-profile. ... 00BF4RFH31
30% VAGF (TER 0,1%)
https://www.justetf.com/en/etf-profile. ... 00BG47KH54

The only disadvantage that I can see right now is that VAGF is hedged to EUR, but I'm not sure if I can see this as a big risk (the concept of hedging is still a bit blurry to me - I understand how it works, but consequences are yet to be understood correctly).

I was thinking also about, instead of having VAGF, putting some money in some Tech Related ETF - I'm a software engineer, so a bit of a tilt towards that sector would satisfy my nerdy mind :) But I haven't found any interesting ETF in this area in BOŚ Bank. So I'll probably go with VAGF.

Any opinions regarding that way of splitting? Once again, this is only tax-free retirement account, I will be investing long-term outside of these accounts as well and I will probably choose different ETFs there. So even if a balance is a bit not optimal in here (possibly too much of a small-cap) I can mitigate this issue in other accounts. This portfolio allows me to be simple with this accounts, so if there are no obvious mistakes (or better opportunities) I will go with this approach.
Topic Author
markubik
Posts: 12
Joined: Sun Jan 10, 2021 5:35 am

Re: Poland - 29y, long term ETF portfolio

Post by markubik »

markubik wrote: Sat Feb 06, 2021 12:24 pm Quick recap - in Poland there are 2 retirement accounts, IKE and IKZE. Limits per year:
IKE - 16k
IKZE - 5,2k
- IKE -
100% VWCE (TER 0,22%)
https://www.justetf.com/en/etf-profile. ... 00BK5BQT80
- IKZE -
70% IUSN (TER 0,35%)
https://www.justetf.com/en/etf-profile. ... 00BF4RFH31
30% VAGF (TER 0,1%)
https://www.justetf.com/en/etf-profile. ... 00BG47KH54
Bump!

I also consider changing VWCE -> ACWI, as it recently lowered its TER (0,6% -> 0,2%, while VWCE has 0,22%), but after some reading I realized that the index that VWCE tracks covers more stocks than ACWI, so I'll go probably go with that anyway.

Any opinions on that?
Laurizas
Posts: 519
Joined: Mon Dec 31, 2018 3:44 am
Location: Lithuania

Re: Poland - 29y, long term ETF portfolio

Post by Laurizas »

It does not matter, their performance is virtually the same.
Topic Author
markubik
Posts: 12
Joined: Sun Jan 10, 2021 5:35 am

Re: Poland - 29y, long term ETF portfolio

Post by markubik »

Laurizas wrote: Sun Feb 21, 2021 11:30 pm It does not matter, their performance is virtually the same.
Yes, looking at the charts they have the same return over the last couple of years. So that's it I guess, I'll go with that approach. Thanks for feedback :)
ndr
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Re: Poland - 29y, long term ETF portfolio

Post by ndr »

I personally wouldn't bother with the small cap fund. Especially given that the two equity funds you chose follow different indexes - I think this would result in a slight overweight of some part of the market (a part that FTSE doesn't treat as Small Cap, but MSCI does). I might be mistaken about the last point though.
alwaysonit
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Re: Poland - 29y, long term ETF portfolio

Post by alwaysonit »

Hi guys, also interested in investing as a Polish resident - do you know any finance forums from Poland I can read?
Thanks :)
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OohLaLa
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Re: Poland - 29y, long term ETF portfolio

Post by OohLaLa »

markubik wrote: Sun Jan 10, 2021 9:25 am So coming to my portfolio - I know that one of the main things in good investment planning is knowing myself, so John Bogle's advice, transformed by my character, willingness to take risk and current situation looks like this (100% is all I want to use for investing):
- 70% - ETFs
- 10% - gold
- 10% - crypto
- 10% - stock-picking, "once in a lifetime opportunities", "become rich in 3 simple steps" and all this kind of things that probably won't help much long term, but it will help me satisfy the eager and impatient part of me. That's a sacrifice I'm planning to make in order to help myself dealing with the standard "my friend bought Tesla stocks and now he's rich while you're trying this boring ETFs". I'm aware it's not the optimal way to think about the assets, but as I've mentioned - I know myself, so I need to take it into account.
Czołem rodaku! :)

Please take everything I say with a grain of salt, as I invest in Canada and all the bureaucracy is different. I also have my own vision of acceptable risk and such. I'm hoping my opinion will give you some food for thought, at least.

You have a very big chunk (30%) in more speculative assets. I'm not judging this as a negative, as I have a generally high-risk approach at this point in time: a few stock picks (especially from my early years of investing, a few years back) and most new funds going into leveraged ETFs (see the HEDGEFUNDIE threads for an idea). They are pretty concentrated risks, in your case, though.

I don't know if you have done this type of questioning already, but I think it's always good to ask why you're adding a certain type of asset class or product. Basically, what is the goal? One basic step to always take is to verify historical correlations between products, to see how they might interact together: https://www.portfoliovisualizer.com/asset-correlations

More specifically, 10% in gold is a relatively very high allocation. Long-term, gold is relatively low-return and quite volatile on shorter timelines. It's correlation is low, approx 0 with major US index funds. Personally, I see gold as a good insurance in cases of catastrophe (think what happened just 80 years ago, especially in our homeland) but it has to be physical gold you can relatively easily access and in usable sizes. Things like Gold funds, especially commodity pools, will not offer you this type of benefit. In other, less dramatic scenarios, I don't see gold as very useful, in comparison to alternatives.

Likewise, 10% in crypto is high. I'm probably not telling you anything you haven't heard from other folks, but it's a very risky proposition, with no regulations, no proper controls. It's pretty Wild West right now. I imagine you see this as a lottery ticket, but if it is, then I would suggest a much smaller allocation.

You spoke of REITs; again, I would ask why you want to invest in those, when you already own (or are still paying for) a flat. From what I recall, a small flat is often in the range of 250-300k PLN (I am assuming a lot here, as I don't know your exact scenario). I wouldn't put more funds into real estate, at this point. Also, REITs are a whole subject in itself. You really have to check the composition of each fund (corporate? residential? small/ large scale?) Many people expect REITs to naturally act as a hedge in times of economy and stock crashes, but a context like that can actually drag RE funds down with it, as well. Just look at the correlation between equity funds and some of the top REIT funds, and you'll see they move closely together.

Overall, you seem like you want relatively stable, "safe" equities but still a big chunk of riskier, but possibly higher-return assets. I would suggest looking into leveraged ETFs that are still very diversified (ex: SSO, QLD). If you can invest in those, with your brokerages, then maybe adding some allocation to that would be an interesting middle-ground for you, versus going all-in with super concentrated bets.
markubik wrote: Sun Jan 10, 2021 9:25 am Should I continue to use the same aforementioned ETFs outside of the IKE account or try to do something else? I was also thinking about REITs in this area, but honestly the more I learn, the less I know, so maybe the solution (from the programming world) "KISS - Keep It Simple Stupid" is the best one?
This is a more general observation... I think people sometimes prioritize the wrong aspects when making investment choices. You still seem to be figuring out what exactly you want to invest in. For example, I wouldn't select asset A because it has lower taxation than B, if B ends up better suited to my expected risk + return. This is even more the case considering you say that the investment taxation in Poland is a flat 19% rate, no matter the type of investment income and regardless of your total reported income for the year.

IKE sounds a bit like a mix of Canada's TFSA and RRSP account types. In your case, it's really a nice harbor but you can't touch it until you are 60+. That is very limiting. Because of that, if you have enough income each year, I would suggest maxing it and putting at least an equivalent amount in a taxable account. Also, I would actually hold the same assets in both accounts, as this affords you the flexibility to draw from your taxable account if you need to before 60, then start tapping into the IKE funds past that point. If you start holding certain types of assets in one, and other types in the other account, you might have huge discrepancy in returns and ultimately total funds, which might cause problems.
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OohLaLa
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Re: Poland - 29y, long term ETF portfolio

Post by OohLaLa »

alwaysonit wrote: Mon Mar 01, 2021 2:58 am Hi guys, also interested in investing as a Polish resident - do you know any finance forums from Poland I can read?
Thanks :)
I'm curious, do you invest in US assets or mostly Polish/ Euro ones?

I say this as a Canadian resident: I learned the most about investing from US-based sources like Bogleheads, Investopedia and US books. There is an overwhelming amount of literature coming out from that country. Most of it applies, no matter where you are from.

I invest mostly in assets listed on US exchanges, as the choice in Canadian assets is simply poor. Even for ETFs tracking the same indices, you're better off investing in the US-listed ones. I have a feeling it might be the same for you guys. It's pretty ridiculous.

The only things I needed to learn from local sources is about tax implications, account types, brokerages available to me, and such. Basically, the bureaucratic aspects.
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Re: Poland - 29y, long term ETF portfolio

Post by TedSwippet »

OohLaLa wrote: Sat Mar 13, 2021 6:20 pm I invest mostly in assets listed on US exchanges, as the choice in Canadian assets is simply poor. Even for ETFs tracking the same indices, you're better off investing in the US-listed ones. I have a feeling it might be the same for you guys. ...
Not really. Unlike Canada, Poland has no estate tax treaty with the US.
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Re: Poland - 29y, long term ETF portfolio

Post by OohLaLa »

TedSwippet wrote: Sun Mar 14, 2021 4:14 am
OohLaLa wrote: Sat Mar 13, 2021 6:20 pm I invest mostly in assets listed on US exchanges, as the choice in Canadian assets is simply poor. Even for ETFs tracking the same indices, you're better off investing in the US-listed ones. I have a feeling it might be the same for you guys. ...
Not really. Unlike Canada, Poland has no estate tax treaty with the US.
You got me curious about this. Do you have any explicit statement about this, in the Polish case? Or any experience with it, yourself?

I ask because it's a bit nebulous. There is a Poland-USA tax treaty but it dates from the 70s, when Poland was communist (PRL), which makes me wonder how important that might or not might have been at the time. There is no mention of the estate tax in the official document, but "income tax" overall.

I haven't searched profusely in Polish, so there might be online sources dealing with this directly, but I have a feeling this would be worth getting legal commentary on.

Btw, I found a site that looks a bit all-over-the-place (https://tradingforaliving.pl/jak-zaczac ... a-granica/) and can't vouch for the quality, but it's in Polish and deals with investing on US exchanges, as a Pole. Alwaysonit, might be interesting for you. Oddly-enough, though, no mention of estate tax implications but mention of ongoing taxation, and how double-taxation is avoided.
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Re: Poland - 29y, long term ETF portfolio

Post by TedSwippet »

OohLaLa wrote: Sun Mar 14, 2021 4:47 pm
TedSwippet wrote: Sun Mar 14, 2021 4:14 am
OohLaLa wrote: Sat Mar 13, 2021 6:20 pm I invest mostly in assets listed on US exchanges, as the choice in Canadian assets is simply poor. Even for ETFs tracking the same indices, you're better off investing in the US-listed ones. I have a feeling it might be the same for you guys. ...
Not really. Unlike Canada, Poland has no estate tax treaty with the US.
You got me curious about this. Do you have any explicit statement about this, in the Polish case? Or any experience with it, yourself?
Apart from Canada, which is a special case, US income tax treaties and US estate tax treaties are entirely separate things. The IRS publishes a list of the countries that have US estate tax treaties. It is a short list, and Poland is not on it:

Estate & Gift Tax Treaties (International) | Internal Revenue Service
OohLaLa wrote: Sun Mar 14, 2021 4:47 pm I ask because it's a bit nebulous. There is a Poland-USA tax treaty but it dates from the 70s, when Poland was communist (PRL), which makes me wonder how important that might or not might have been at the time. There is no mention of the estate tax in the official document, but "income tax" overall.
Article 2 of the US/Poland income tax treaty shows clearly what taxes are covered. The US estate tax is not included.
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OohLaLa
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Re: Poland - 29y, long term ETF portfolio

Post by OohLaLa »

I was hoping the separation of those terminologies might have been a more recent phenomenon, affording some potential leeway. I took a quick look at Wiki and found that the US Estate Tax has existed in its current form since 1916. I believe that is quite some time before 1974. :)

Now the question is, once you become food for the worms, do you wish to keep that 40% or not. You might leave some displeased children behind you. haha
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markubik
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Re: Poland - 29y, long term ETF portfolio

Post by markubik »

OohLaLa wrote: Sat Mar 13, 2021 6:09 pm Czołem rodaku! :)
Hej, miło widzieć, że jest nas więcej :)
OohLaLa wrote: Sat Mar 13, 2021 6:09 pm Please take everything I say with a grain of salt, as I invest in Canada and all the bureaucracy is different. I also have my own vision of acceptable risk and such. I'm hoping my opinion will give you some food for thought, at least.
Sure thing, that's exactly why I'm here - probably there is nobody with the exact same situation as mine, but getting different opinions is crucial for me :)
OohLaLa wrote: Sat Mar 13, 2021 6:09 pm You have a very big chunk (30%) in more speculative assets. I'm not judging this as a negative, as I have a generally high-risk approach at this point in time: a few stock picks (especially from my early years of investing, a few years back) and most new funds going into leveraged ETFs (see the HEDGEFUNDIE threads for an idea). They are pretty concentrated risks, in your case, though.
That's true. First thing is that it has substantially changed since the time I wrote the first post :) What I probably should have mentioned, right now I'm concentrating only on IKE/IKZE - I realized I was trying to kill too many birds with one stone and I decided to simplify. So bitcoin, stocks et consortes will be within my area of interest, but only after I put some reasonable amount of income in ETFs :)
OohLaLa wrote: Sat Mar 13, 2021 6:09 pm I don't know if you have done this type of questioning already, but I think it's always good to ask why you're adding a certain type of asset class or product. Basically, what is the goal? One basic step to always take is to verify historical correlations between products, to see how they might interact together: https://www.portfoliovisualizer.com/asset-correlations
I'm yet to do that, but of course you're right. I'm still trying to grasp some understanding regarding past returns and how to map it to my own needs.
OohLaLa wrote: Sat Mar 13, 2021 6:09 pm More specifically, 10% in gold is a relatively very high allocation. Long-term, gold is relatively low-return and quite volatile on shorter timelines. It's correlation is low, approx 0 with major US index funds. Personally, I see gold as a good insurance in cases of catastrophe (think what happened just 80 years ago, especially in our homeland) but it has to be physical gold you can relatively easily access and in usable sizes. Things like Gold funds, especially commodity pools, will not offer you this type of benefit. In other, less dramatic scenarios, I don't see gold as very useful, in comparison to alternatives.
I'm thinking about gold as a way to keep money, without any substantial growth - "good insurance" is probably the best description of my reasoning. I plan to buy a bit of physical gold. I agree (at least that's what I've read :P), that it's not that useful when it comes to investing. I'm also considering gold as a counterweight for crazy stuff like crypto - I would feel a bit more secure knowing, that I can put some cash in crypto if I have the gold-related insurance. Whether that's a valid reasoning - yet to check, as right know I have neither gold nor substantial amount of crypto, but I think it align with my emotional side.
OohLaLa wrote: Sat Mar 13, 2021 6:09 pm Likewise, 10% in crypto is high. I'm probably not telling you anything you haven't heard from other folks, but it's a very risky proposition, with no regulations, no proper controls. It's pretty Wild West right now. I imagine you see this as a lottery ticket, but if it is, then I would suggest a much smaller allocation.
That's one of the things that have change since the time I wrote my first post. Now it seems quite obvious even to me, that 10% is way too high - so I'm even happier I joined this forum, I can only imagine, what kind of weird decisions it has stopped me from :) I will still be putting some of my income in crypto, I'm nerdy IT guy, I just have to do it - I'm also thinking about some personal side-project related to Ethereum (it sounds like a great platform to build on top of), so it's basically a must for me. But I guess no more than 2% every month (or a bit more, if the prices will go down).
OohLaLa wrote: Sat Mar 13, 2021 6:09 pm You spoke of REITs; again, I would ask why you want to invest in those, when you already own (or are still paying for) a flat. From what I recall, a small flat is often in the range of 250-300k PLN (I am assuming a lot here, as I don't know your exact scenario). I wouldn't put more funds into real estate, at this point. Also, REITs are a whole subject in itself. You really have to check the composition of each fund (corporate? residential? small/ large scale?) Many people expect REITs to naturally act as a hedge in times of economy and stock crashes, but a context like that can actually drag RE funds down with it, as well. Just look at the correlation between equity funds and some of the top REIT funds, and you'll see they move closely together.
Honestly - I don't know why I want to invest in them and I probably don't want anymore. I already have my own flat (I've borrowed small amount of money from my parents), it's close to the subway station (we don't have many of these in Warsaw :P), so I will probably treat that as an investment, and if there will be any possibility to move abroad, I will rent it. Until then, probably I won't be doing anything related to real estate.
OohLaLa wrote: Sat Mar 13, 2021 6:09 pm Overall, you seem like you want relatively stable, "safe" equities but still a big chunk of riskier, but possibly higher-return assets. I would suggest looking into leveraged ETFs that are still very diversified (ex: SSO, QLD). If you can invest in those, with your brokerages, then maybe adding some allocation to that would be an interesting middle-ground for you, versus going all-in with super concentrated bets.

Hmm, levereged ETFs are something I was just reading about, but I wasn't considering them as part of my portfolio so far. I'll give them a second chance then :)
OohLaLa wrote: Sat Mar 13, 2021 6:09 pm This is a more general observation... I think people sometimes prioritize the wrong aspects when making investment choices. You still seem to be figuring out what exactly you want to invest in. For example, I wouldn't select asset A because it has lower taxation than B, if B ends up better suited to my expected risk + return. This is even more the case considering you say that the investment taxation in Poland is a flat 19% rate, no matter the type of investment income and regardless of your total reported income for the year.

IKE sounds a bit like a mix of Canada's TFSA and RRSP account types. In your case, it's really a nice harbor but you can't touch it until you are 60+. That is very limiting. Because of that, if you have enough income each year, I would suggest maxing it and putting at least an equivalent amount in a taxable account. Also, I would actually hold the same assets in both accounts, as this affords you the flexibility to draw from your taxable account if you need to before 60, then start tapping into the IKE funds past that point. If you start holding certain types of assets in one, and other types in the other account, you might have huge discrepancy in returns and ultimately total funds, which might cause problems.
That's what I probably need to clarify - IKE/IKZE will be just a fraction of all my investments - my idea is to max them out every year as fast as possible and then use other places (I have account on Bitbay and Degiro so far, but that's a topic for another discussion). So for now, to simplify my reasoning and to deal with one thing at the time (well, two actually :)) I'm thinking only about IKE/IKZE, that have some interesting traits (can be used without tax after 60yo, limited possibilities when it comes to ETFs), but the main thing is that I need to split the amount of money that can be put in both accounts to:
- IKE - 16k
- IKZ - 6k

I've already decided, that for IKE I'll go with VWCE, I'm now thinking about what to do with IKZE - I was initially thinking about using IUSN (IShares Small Cap UCITS ETF), but I'm not sure about it - as others have mentioned, it can result in duplication of some parts of the world due to differences and similarities between those two ETFs. The situation with IKE/IKZE is a bit different than with standard investments - I'm pretty sure that I will not be touching that cash till when I'm 60yo, even though it may be possible to retire earlier (and of course assuming nothing really bad will happen, like a health issue or stuff like that), I will be putting at least the same amount of cash into other ETFs outside IKE/IKZE (so there's also a topic of how to split them, that you've already mentioned - putting the same amount of cash into the same ETFs inside and outside of IKE/IKZE sound reasonable), it's also a place that really enforces the idea of "put and forget" approach.

So, to sum up - IKE/IKZE is one thing, other investments are something different - and by this "something different" I mean ETFs (probably a lot of them), but also crypto, gold, individual stocks and other weird stuff, that I would need more to satisfy my nerdy, tech-savvy side than to reach financial independence :)

Thanks a lot for your comment - it helped me to understand, what are the flaws of my approach, right now this "10% into crypto" is plain stupid to me :P I will be coming back with some additional questions after I deal with IKE/IKZE, but right now I have this feeling, that at least I know something and I understand pros and cons of every approach a bit better :)
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Re: Poland - 29y, long term ETF portfolio

Post by OohLaLa »

markubik wrote: Fri Mar 26, 2021 4:36 pm Honestly - I don't know why I want to invest in them and I probably don't want anymore. I already have my own flat (I've borrowed small amount of money from my parents), it's close to the subway station (we don't have many of these in Warsaw :P), so I will probably treat that as an investment, and if there will be any possibility to move abroad, I will rent it. Until then, probably I won't be doing anything related to real estate.
Ah, prime real estate in PL :beer, so yeah, I would definitely not put more into RE for the foreseeable future.
markubik wrote: Fri Mar 26, 2021 4:36 pm I've already decided, that for IKE I'll go with VWCE, I'm now thinking about what to do with IKZE - I was initially thinking about using IUSN (IShares Small Cap UCITS ETF), but I'm not sure about it - as others have mentioned, it can result in duplication of some parts of the world due to differences and similarities between those two ETFs.
TedSwippet brought up a great point about the dangers (full Estate Tax) of investing in US-domiciled securities, as a Pole. You seem to be taking such implications to heart (Irish-domiciled ETFs).

Maybe I forgot something you already mentioned, but is there a reason why you wish to separate off different ETFs in different accounts? Is there an actual benefit of some sort, in your context? Also, with adding IUSN you would probably have some overlap, but if it's a conscious decision to tilt toward small cap then that shouldn't be a problem, no?
markubik wrote: Fri Mar 26, 2021 4:36 pm The situation with IKE/IKZE is a bit different than with standard investments - I'm pretty sure that I will not be touching that cash till when I'm 60yo, even though it may be possible to retire earlier (and of course assuming nothing really bad will happen, like a health issue or stuff like that), I will be putting at least the same amount of cash into other ETFs outside IKE/IKZE (so there's also a topic of how to split them, that you've already mentioned - putting the same amount of cash into the same ETFs inside and outside of IKE/IKZE sound reasonable), it's also a place that really enforces the idea of "put and forget" approach.
If you had asked me 5 years ago if I would like to retire soon, I would have told you I'm in no rush. Ask me now and I would gladly do so, in order to do other "valuable" things. That's why I stressed that point about being relatively even in the split between accounts. If you put only crypto in taxable and all safer assets in IKE/ IKZE, then crypto implodes, just as you were thinking you want to change careers or focus on less financially-rewarding pursuits, you will be stuck with withdrawing from the "retirement" accounts. That's a 19% you could have simply avoided by keep the 60+ accounts really for when you are 60+.
markubik wrote: Fri Mar 26, 2021 4:36 pm I will be coming back with some additional questions after I deal with IKE/IKZE, but right now I have this feeling, that at least I know something and I understand pros and cons of every approach a bit better :)
BH is a great forum if you're looking for smart answers. If you haven't visited the US section, you should check it out. With investing, there is a lot of overlap so sometimes you are actually better off posting there than here. You'll get a lot more traction.

Z tym, życzę dużo sukcesów! :D
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markubik
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Re: Poland - 29y, long term ETF portfolio

Post by markubik »

OohLaLa wrote: Sat Mar 27, 2021 9:42 pm Ah, prime real estate in PL :beer, so yeah, I would definitely not put more into RE for the foreseeable future.
Yup, I guess that's my decision, at least for now - RE is too complicated for me anyway :)
OohLaLa wrote: Sat Mar 27, 2021 9:42 pm Maybe I forgot something you already mentioned, but is there a reason why you wish to separate off different ETFs in different accounts? Is there an actual benefit of some sort, in your context? Also, with adding IUSN you would probably have some overlap, but if it's a conscious decision to tilt toward small cap then that shouldn't be a problem, no?
Nope, that's just my gut feeling - with IKZE there are additional benefits regarding PIT, but it boils down to money being put there, not the returns. So it's just my sense of diversification in this area - I'm just thinking that if I'm putting more money in IKE, I can be a bit more crazy with smaller amount of money on IKZE - hence the small cap, which, to my best knowledge, are more volatile short-term, but can provide higher returns long-term. But calling that "conscious decision" would probably be an overstatement :P I'm also struggling to grasp the idea behind value vs growth, especially when it comes to small cap - I'm giving myself a week more to get some knowledge in this particular area and then I will probably make a final (so to speak) decision. It will probably be small-cap, but which ETF exactly is yet to be decided. As you can see, I'm still struggling with basics, but I'm really trying my best :)
OohLaLa wrote: Sat Mar 27, 2021 9:42 pm If you had asked me 5 years ago if I would like to retire soon, I would have told you I'm in no rush. Ask me now and I would gladly do so, in order to do other "valuable" things. That's why I stressed that point about being relatively even in the split between accounts. If you put only crypto in taxable and all safer assets in IKE/ IKZE, then crypto implodes, just as you were thinking you want to change careers or focus on less financially-rewarding pursuits, you will be stuck with withdrawing from the "retirement" accounts. That's a 19% you could have simply avoided by keep the 60+ accounts really for when you are 60+.
That's so important for me to understand - every penny put to IKE/IKZE should be put in the same amount to taxable parts of my portfolio. Best case scenario is that IKE/IKZE is just a nice bonus to my standard investments - but of course I want to take no-so-good scenarios into consideration, where I would need that money earlier. So yeah, I will be putting (at least) the same amount of money to investments, that I can withdraw from any time.
But the question I have (probably a bit of theoretical one, but it's something that I'm not sure of) is - should it be exactly the same ETFs as for IKE/IKZE? To be honest, the offer from the bank, that I have my retirement accounts in is not that great - the are certain limitations, when it comes to possibilities - on sites like Degiro/IB there is waaay more options to deal with. Is the approach "same amount of money, some way of investing, but with the possibility of slightly different ETFs" plausible. It it reasonable to use a "diversification card" in this area - meaning, doing the same, but in a bit different way, with other ETFs, even if they are following the same index? Or should I just go with the simplest approach and use the same ETFs for both types of accounts?
OohLaLa wrote: Sat Mar 27, 2021 9:42 pm BH is a great forum if you're looking for smart answers. If you haven't visited the US section, you should check it out. With investing, there is a lot of overlap so sometimes you are actually better off posting there than here. You'll get a lot more traction.
I wasn't aware of that - probably apart from IKE/IKZE, the US section is better to read as certainly there is more people there. Having in mind, that we don't have as many possibilites in Europe as in US, but also knowing about domiciles of ETFs and how they are related to taxes, should be enough to go the forums, where the real money is being discussed :P
OohLaLa wrote: Sat Mar 27, 2021 9:42 pm Z tym, życzę dużo sukcesów! :D
Dzięki jeszcze raz, to naprawdę duża pomoc :)
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Re: Poland - 29y, long term ETF portfolio

Post by OohLaLa »

markubik wrote: Sun Mar 28, 2021 8:54 am Nope, that's just my gut feeling - with IKZE there are additional benefits regarding PIT, but it boils down to money being put there, not the returns. So it's just my sense of diversification in this area - I'm just thinking that if I'm putting more money in IKE, I can be a bit more crazy with smaller amount of money on IKZE - hence the small cap, which, to my best knowledge, are more volatile short-term, but can provide higher returns long-term.
In the case of US/ Canada investing, because of the possibility of declaring "capital losses" on sold investments, there are some that would suggest putting higher risk, more speculative assets in the taxable accounts. Are you allowed, in Polish law, to offset "capital gains" with "capital losses"? If not, then this type of concern doesn't apply and I would definitely go with relatively even splitting between accounts.

Just to confirm, I'm not saying to go completely insane with being evenly split, just to keep relatively similar levels of assets or at least similar levels of risk (not something always evident to ascertain). My example with crypto is best: going full-risk with pre-retirement account and minimal-risk in the retirement ones just seems like a bad approach, from what I understand about PL taxation so far.

markubik wrote: Sun Mar 28, 2021 8:54 am I'm also struggling to grasp the idea behind value vs growth, especially when it comes to small cap - I'm giving myself a week more to get some knowledge in this particular area and then I will probably make a final (so to speak) decision.
At a very high-level, I would say from my limited knowledge:
Value = companies at a later stage of the lifecycle, with most of their valuation being derived from existing assets and the revenue they allow. They normally have lower debt levels. = Less volatile investments, less potential upside

Growth = companies usually in earlier stages of the lifecycle, with most of their valuation being derived from expected future revenue, from new developments being pursued. These companies usually have much higher levels of debt and lower levels of existing assets. = More volatile investments, more potential upside

One of the simple metrics often used to help put companies in one box or the other is the P/E ration (Price-to-Earnings): https://www.investopedia.com/terms/p/pr ... sratio.asp


markubik wrote: Sun Mar 28, 2021 8:54 am But the question I have (probably a bit of theoretical one, but it's something that I'm not sure of) is - should it be exactly the same ETFs as for IKE/IKZE? To be honest, the offer from the bank, that I have my retirement accounts in is not that great - the are certain limitations, when it comes to possibilities - on sites like Degiro/IB there is waaay more options to deal with. Is the approach "same amount of money, some way of investing, but with the possibility of slightly different ETFs" plausible. It it reasonable to use a "diversification card" in this area - meaning, doing the same, but in a bit different way, with other ETFs, even if they are following the same index? Or should I just go with the simplest approach and use the same ETFs for both types of accounts?
Unless I had some legal or practical restrictions about holding certain ETFs in certain accounts, I would just stick with the same ETFs in the different accounts. In theory, there shouldn't be any issue with holding different ETFs tracking the same index, but I just don't see the benefit. Just choose the one with the lowest costs and that has sufficient liquidity/ assets under management (AUM) to allow for flexible and cost-effective trading.

In my case, I do avoid purchasing certain ETFs in one of the government-tracked (i.e. "registered") accounts as there is a history of people investing in non-vanilla assets and getting fully taxed on the proceeds when they hit it big, even though they shouldn't. This is a sneaky approach by our revenue agency and I want to fly under the radar with that account. No 2x or 3x leveraged ETFs in that account! :( Otherwise, I keep basically the same AA in both my other accounts, because I have less chances of major disparity between accounts and I have more flexibility in how I can withdraw and report income (different treatment by the government).
markubik wrote: Sun Mar 28, 2021 8:54 am I wasn't aware of that - probably apart from IKE/IKZE, the US section is better to read as certainly there is more people there. Having in mind, that we don't have as many possibilites in Europe as in US, but also knowing about domiciles of ETFs and how they are related to taxes, should be enough to go the forums, where the real money is being discussed :P
My approach, when I started reading about investment a good 7 years ago or so, was learning in mostly this order:
1-Account types available (registered (IKE/ IKZE in your case), non-registered (taxable)) and all the regulation around them. Understanding the benefits and potential obstacles.
2-General investment/ finance info: what's an ETF, brokerage order types (limit, market etc.), asset types, correlation etc.
3-Investment strategies: fixed AA, momentum, moving average...

When you are well-informed about #1 then reading about #2 and #3 from US sources is OK. You quickly understand what applies to you or not (ex: tax loss harvesting, offsetting gains with losses, short-term vs. long-term capital gains). I learned the most from US-based sources (books, websites, forums), even if I read some Canadian material as well (actually mostly to do with the account types!)
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markubik
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Re: Poland - 29y, long term ETF portfolio

Post by markubik »

OohLaLa wrote: Sun Mar 28, 2021 12:39 pm In the case of US/ Canada investing, because of the possibility of declaring "capital losses" on sold investments, there are some that would suggest putting higher risk, more speculative assets in the taxable accounts. Are you allowed, in Polish law, to offset "capital gains" with "capital losses"? If not, then this type of concern doesn't apply and I would definitely go with relatively even splitting between accounts.
As far as I know it is possible to use losses in order to make taxes on the gains smaller, but that's way too hardcore for me right now and goes beyond my idea of simplification :P The one sure thing is that with IKZE, if I'm putting that max amount of money, 6k, it is possible to lower the tax base by 2k (in PIT). As of today that's all I want to do when it comes to tax-related stuff. But of course I'll be learning about this, I just one to the one step at a time and hope, that lack of idea about future steps does not make current steps stupid :)
OohLaLa wrote: Sun Mar 28, 2021 12:39 pm Just to confirm, I'm not saying to go completely insane with being evenly split, just to keep relatively similar levels of assets or at least similar levels of risk (not something always evident to ascertain). My example with crypto is best: going full-risk with pre-retirement account and minimal-risk in the retirement ones just seems like a bad approach, from what I understand about PL taxation so far.
Well, it's not that bad with IKE/IKZE - even if I decide to withdraw the money before 60yo, I would "just" have to pay the capital gains tax (the same that I would have to pay without IKE/IKZE). Of course it's not that great, because, due to not many possibilites to use ETFs for IKE/IKZE (just 2 banks are "serious" about it, and they're having portfolio of ETFs, but not a big one), but, in case of any emergency, it's not THAT bad.

There is also another topic, PPK (it roughly translates to employee capital plans), when the situation is even harder, but "luckily" there isn't much you can do about, where your money is used - you can just have this account or not. Many people are afraid that it can be the same case as with OFE (quite smooth plan created 25 years ago to allow people get some additional cash for their retirement, unfortunately the idea has been competely destroyed and demonized by some of the governments using that money handle the national debt) - it quite hard to believe, that the government won't do the same. But that's a different topic :P
OohLaLa wrote: Sun Mar 28, 2021 12:39 pm At a very high-level, I would say from my limited knowledge:
Value = companies at a later stage of the lifecycle, with most of their valuation being derived from existing assets and the revenue they allow. They normally have lower debt levels. = Less volatile investments, less potential upside

Growth = companies usually in earlier stages of the lifecycle, with most of their valuation being derived from expected future revenue, from new developments being pursued. These companies usually have much higher levels of debt and lower levels of existing assets. = More volatile investments, more potential upside

One of the simple metrics often used to help put companies in one box or the other is the P/E ration (Price-to-Earnings): https://www.investopedia.com/terms/p/pr ... sratio.asp
Ok, I understand it a bit better know - sounds pretty simple if somebody explains it in layman's terms :P But does it have any correlation, when it comes to ETFs? That my biggest struggle - if I'm selecting an ETF or more precisely the index it is based on, does it mean that I'm selecting only growth or only value stocks, because the index traces either ones? Maybe it requires a bit more knowledge on my side, especially regarding indexes and how they are created, but as I've mentioned - I want to start as soon as possible (compounding'n'stuff) and I want to ensure I'm not doing anything really stupid. I will be improving my theoretical knowledge with time.

OohLaLa wrote: Sun Mar 28, 2021 12:39 pm Unless I had some legal or practical restrictions about holding certain ETFs in certain accounts, I would just stick with the same ETFs in the different accounts. In theory, there shouldn't be any issue with holding different ETFs tracking the same index, but I just don't see the benefit. Just choose the one with the lowest costs and that has sufficient liquidity/ assets under management (AUM) to allow for flexible and cost-effective trading.
The lowest cost argument is what convinces me - I'm planning to use Degiro and there is a lot more ETFs to choose from than is allowed by broker I'm keeping IKE/IKZE in. I guess it will still be VWCE, as far as I read it's still optimal solution for me, but when it comes to other ETFs, that I would write about later, there are probably cheaper options out there. So, to sum up "similar, but not necessarily exactly the same" :)
OohLaLa wrote: Sun Mar 28, 2021 12:39 pm In my case, I do avoid purchasing certain ETFs in one of the government-tracked (i.e. "registered") accounts as there is a history of people investing in non-vanilla assets and getting fully taxed on the proceeds when they hit it big, even though they shouldn't. This is a sneaky approach by our revenue agency and I want to fly under the radar with that account. No 2x or 3x leveraged ETFs in that account! :( Otherwise, I keep basically the same AA in both my other accounts, because I have less chances of major disparity between accounts and I have more flexibility in how I can withdraw and report income (different treatment by the government).

Ok, so basically yet again simplicity wins :) I'll go with that then. The other disadvantage of non-polish brokers is the fact, that they are not preparing any summarize of losses and gains and in order to deduct the tax, we have to do some calculations. But on the other hand, the calculations are not that complicated. Moreover - c'mon, I'm an IT guy, who can do it if not me :P
OohLaLa wrote: Sun Mar 28, 2021 12:39 pm My approach, when I started reading about investment a good 7 years ago or so, was learning in mostly this order:
1-Account types available (registered (IKE/ IKZE in your case), non-registered (taxable)) and all the regulation around them. Understanding the benefits and potential obstacles.
2-General investment/ finance info: what's an ETF, brokerage order types (limit, market etc.), asset types, correlation etc.
3-Investment strategies: fixed AA, momentum, moving average...

When you are well-informed about #1 then reading about #2 and #3 from US sources is OK. You quickly understand what applies to you or not (ex: tax loss harvesting, offsetting gains with losses, short-term vs. long-term capital gains). I learned the most from US-based sources (books, websites, forums), even if I read some Canadian material as well (actually mostly to do with the account types!)
I think I'm okayish about #1 and I guess it's time to go to expand my knowledge. It feels a bit strange that I'm simultaneously trying to learn and invest, but I just feel bad, that I'm not doing anything with my money, especially after reading about compounding, so as I've said - I'm just trying not to make any big mistake :)

I will not decide yet, but I think I feel quite confidence about splitting my IKZE account between two ETFs - aforementioned IUSN and CNDX (Nasdaq 100), roughly 50-50. I think it okay for me to use IKZE to make tilts towards any particular segments. I described the reasoning for IUSN and when it comes to CNDX - I would just feel bad without any tilt toward the big tech guys. Is it the optimal solution from the perspective of possible returns and risk? Probably not. But I'm pretty confident that I will be able to stick to that long term (of course I'm saying it after one day of thinking :P) and, as stupid as it sounds, I just feel calm and relaxed about this. That must be a good indicator, right? Anyway, if nothing has changed till the end of the week, that's the plan I will probably go with :)
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Re: Poland - 29y, long term ETF portfolio

Post by OohLaLa »

markubik wrote: Mon Mar 29, 2021 3:14 pm As far as I know it is possible to use losses in order to make taxes on the gains smaller, but that's way too hardcore for me right now and goes beyond my idea of simplification :P The one sure thing is that with IKZE, if I'm putting that max amount of money, 6k, it is possible to lower the tax base by 2k (in PIT). As of today that's all I want to do when it comes to tax-related stuff. But of course I'll be learning about this, I just one to the one step at a time and hope, that lack of idea about future steps does not make current steps stupid :)
Ah ok, so there are some similarities. I just mentioned it previously because it is a variable some take into account, but it's one that doesn't change how I personally separate assets. Someone that puts a riskier asset 100% in the taxable account and, let's say, sees an actual loss on their investment, can indeed report the complete loss and counter capital gains. What happens if that person sees an increase in the value, though? They also see taxation on the whole proceeds. In my mind, because of the unknown result of your investment, splitting it across the accounts is not a stupid idea. You're basically hedging your bet a bit.
markubik wrote: Mon Mar 29, 2021 3:14 pm There is also another topic, PPK (it roughly translates to employee capital plans), when the situation is even harder, but "luckily" there isn't much you can do about, where your money is used - you can just have this account or not. Many people are afraid that it can be the same case as with OFE (quite smooth plan created 25 years ago to allow people get some additional cash for their retirement, unfortunately the idea has been competely destroyed and demonized by some of the governments using that money handle the national debt) - it quite hard to believe, that the government won't do the same. But that's a different topic :P
Yeah, that is indeed another topic... If anybody asks, I always tell people to look at corporate or government pension/ retirement funds with a certain level of suspicion and uncertainty, as there were countless examples of corruption, collapses, lack of funds for payouts etc. :oops: It's a 'good-to-have' bonus but you should not strongly rely on them in retirement. You should have your own, personal assets (with more control over their management) as your strong foundation. I remember hearing about controversy surrounding ZUS, in recent years, but I never really read any reports. I guess you can add that one to your list of potentially problematic funds. :P
markubik wrote: Mon Mar 29, 2021 3:14 pm Ok, I understand it a bit better know - sounds pretty simple if somebody explains it in layman's terms :P But does it have any correlation, when it comes to ETFs? That my biggest struggle - if I'm selecting an ETF or more precisely the index it is based on, does it mean that I'm selecting only growth or only value stocks, because the index traces either ones? Maybe it requires a bit more knowledge on my side, especially regarding indexes and how they are created, but as I've mentioned - I want to start as soon as possible (compounding'n'stuff) and I want to ensure I'm not doing anything really stupid. I will be improving my theoretical knowledge with time.
"Growth" and "Value" are just two examples of so-called "factor investing". There are even ETFs specifically constructed with companies that fit these monikers. It's usually clearly mentioned in the basic description, or even the name, of the ETF. Even for major indices (and the ETFs that track them), people categorize the S&P 500 index as "Value" and NASDAQ-100 as "Growth". Like you said, it takes more digging into the details, and I would agree with you in that you should get your hands dirty before figuring every single aspect of investment. There are so many asset types, sectors, "factors" etc. that you can you use to categorize assets, that you can easily get lost in minute details and never start investing.

markubik wrote: Mon Mar 29, 2021 3:14 pm Ok, so basically yet again simplicity wins :) I'll go with that then. The other disadvantage of non-polish brokers is the fact, that they are not preparing any summarize of losses and gains and in order to deduct the tax, we have to do some calculations. But on the other hand, the calculations are not that complicated. Moreover - c'mon, I'm an IT guy, who can do it if not me :P
Oh, I definitely get you with the tax calculations! I work in IT, as well :beer, but that still didn't prevent me from approaching opening a taxable account with A LOT of precaution. I initially focused on the simpler government-tracked accounts because I didn't need to track transactions like that. I had the time to focus on other things at the beginning. Afterwards, I made sure I understood how to properly calculate "adjusted cost basis", before opening such an account. Each time I calculate things related to any transaction, I double and triple-check to make sure I don't report nonsense to the government. :shock:
markubik wrote: Mon Mar 29, 2021 3:14 pm I think I'm okayish about #1 and I guess it's time to go to expand my knowledge. It feels a bit strange that I'm simultaneously trying to learn and invest, but I just feel bad, that I'm not doing anything with my money, especially after reading about compounding, so as I've said - I'm just trying not to make any big mistake :)
I think what you are doing is the best way to approach it. Many young folks, in our generation, either do not care (not seeing the importance) or are simply afraid of investing, seeing it as an extremely complex and dangerous activity. This leads to paralysis and resulting loss of compounding throughout many years.

The moment you understand all the legal/ tax implications of what you are doing, and have a fundamental understanding, you should start investing in simple products (ex: index/ bond ETFs). Nothing stops you from continuing your study all while steadily contributing to your investments.
markubik wrote: Mon Mar 29, 2021 3:14 pm I will not decide yet, but I think I feel quite confidence about splitting my IKZE account between two ETFs - aforementioned IUSN and CNDX (Nasdaq 100), roughly 50-50. I think it okay for me to use IKZE to make tilts towards any particular segments. I described the reasoning for IUSN and when it comes to CNDX - I would just feel bad without any tilt toward the big tech guys. Is it the optimal solution from the perspective of possible returns and risk? Probably not. But I'm pretty confident that I will be able to stick to that long term (of course I'm saying it after one day of thinking :P) and, as stupid as it sounds, I just feel calm and relaxed about this. That must be a good indicator, right? Anyway, if nothing has changed till the end of the week, that's the plan I will probably go with :)
All-World Small Cap and NASDAQ-100 is riskier than Total Stock, or even S&P, and it's a pretty specific combo of tilts, but I don't think it's something crazy.

I would be a hypocrite if I said your selection is crazy... I am in a 3x leveraged NASDAQ-100 fund. lol I will actually accelerate diversification to the S&P this year, because I recognize my old (bad) habit of concentrating funds too much in one thing in particular. :twisted: I shouldn't be completely reliant on NASDAQ, even though I am still convinced it will lead the pack middle-long-term.
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markubik
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Re: Poland - 29y, long term ETF portfolio

Post by markubik »

Hi, sorry for the late response, I was trying to verify my options properly before the title of this thread becomes obsolete (it's tomorrow :))
OohLaLa wrote: Mon Mar 29, 2021 9:40 pm Ah ok, so there are some similarities. I just mentioned it previously because it is a variable some take into account, but it's one that doesn't change how I personally separate assets. Someone that puts a riskier asset 100% in the taxable account and, let's say, sees an actual loss on their investment, can indeed report the complete loss and counter capital gains. What happens if that person sees an increase in the value, though? They also see taxation on the whole proceeds. In my mind, because of the unknown result of your investment, splitting it across the accounts is not a stupid idea. You're basically hedging your bet a bit.
Yes, the topic of reporting losses and using them not to pay taxes for gains is something I'm still not sure of - I know it works in Poland, but that's the kind of optimization I'll be using later in time - definitely not this year.

OohLaLa wrote: Mon Mar 29, 2021 9:40 pm Yeah, that is indeed another topic... If anybody asks, I always tell people to look at corporate or government pension/ retirement funds with a certain level of suspicion and uncertainty, as there were countless examples of corruption, collapses, lack of funds for payouts etc. :oops: It's a 'good-to-have' bonus but you should not strongly rely on them in retirement. You should have your own, personal assets (with more control over their management) as your strong foundation. I remember hearing about controversy surrounding ZUS, in recent years, but I never really read any reports. I guess you can add that one to your list of potentially problematic funds. :P
In my portfolio I'm not thinking about ZUS at all - even though I have employment contract (and yes, I'm paying this high taxes, I like to think about it as "paying my grandparents' retirement pension" :P) and, at least theoretically I will be eligible for state pension, I'm a realist - if I receive anything from that source, it would my just nice adjustment, not something that I can rely on. I'm not one of these guys that say, that this system will collapse completely, it will in my opinion undergo severe changes in the future but I don't want to count on it. So yeah, problematic fund :)
OohLaLa wrote: Mon Mar 29, 2021 9:40 pm "Growth" and "Value" are just two examples of so-called "factor investing". There are even ETFs specifically constructed with companies that fit these monikers. It's usually clearly mentioned in the basic description, or even the name, of the ETF. Even for major indices (and the ETFs that track them), people categorize the S&P 500 index as "Value" and NASDAQ-100 as "Growth". Like you said, it takes more digging into the details, and I would agree with you in that you should get your hands dirty before figuring every single aspect of investment. There are so many asset types, sectors, "factors" etc. that you can you use to categorize assets, that you can easily get lost in minute details and never start investing.
You're right, I'll go into all that topics, but I probably should not overwhelm myself with too much data - I've read somewhere, that the best decisions are suboptimal, because they can be made faster. And that's what, I guess, is the key - small error right now won't hurt much long-term - all I need is this "long-term" :)
OohLaLa wrote: Mon Mar 29, 2021 9:40 pm Oh, I definitely get you with the tax calculations! I work in IT, as well :beer, but that still didn't prevent me from approaching opening a taxable account with A LOT of precaution. I initially focused on the simpler government-tracked accounts because I didn't need to track transactions like that. I had the time to focus on other things at the beginning. Afterwards, I made sure I understood how to properly calculate "adjusted cost basis", before opening such an account. Each time I calculate things related to any transaction, I double and triple-check to make sure I don't report nonsense to the government. :shock:
Yup, my order of investments is:
- IKE/IKZE (no taxes for the foreseeable future, Polish broker)
- Degiro/IB - ETFs accumulating (no taxes now, a lot of time to learn how to calculate them and they still should be easy) <-- Most of my money will go here
- Gold/Crypto - planning to hold crypto for considerable amount of time, so still some time to learn, how to calculate taxes
- Degiro/IB - Single stocks - dividends'n'stuff - will require some time to learn.

Probably I will go with that cycle every year - it sounds right to me, it will stop me from overspending on more volatile assets. But, of course, to quote one of the most famous interview in Polish football history "we will say what time will tell" :)
OohLaLa wrote: Mon Mar 29, 2021 9:40 pm I think what you are doing is the best way to approach it. Many young folks, in our generation, either do not care (not seeing the importance) or are simply afraid of investing, seeing it as an extremely complex and dangerous activity. This leads to paralysis and resulting loss of compounding throughout many years.
As a previously mentioned somewhere above, it's almost scary, how little people in Poland know about investing - I've started to read about it one year ago, and even though I'm not spending much on it and I don't know much (as you can see :P) I can clearly see that we don't have the culture of investing at all. My parents have really considerable amount of cash on their account, and inflation is slowly making it less and less valuable, but they are unable to try to put even just a fraction into something that is even slightly volatile. And they are both really intelligent, well educated and live in big city, so I can only imagine how it looks outside big cities :/ It probably has something to do with the possibility to do the wrong thing - having money that slowly loses value in the account is bad, but understandable and predictable. And even though smart investing is way better than just keeping money in the bank, stupid investing is waaay worse. So most of the people decide no to do anything at all. So yeah, I'm spreading my limited knowledge everywhere I can - I'm doing my part :)
OohLaLa wrote: Mon Mar 29, 2021 9:40 pm All-World Small Cap and NASDAQ-100 is riskier than Total Stock, or even S&P, and it's a pretty specific combo of tilts, but I don't think it's something crazy.

I would be a hypocrite if I said your selection is crazy... I am in a 3x leveraged NASDAQ-100 fund. lol I will actually accelerate diversification to the S&P this year, because I recognize my old (bad) habit of concentrating funds too much in one thing in particular. :twisted: I shouldn't be completely reliant on NASDAQ, even though I am still convinced it will lead the pack middle-long-term.
:) I see, so I guess my idea is not that bad. I know this Small Cap may be a bit strange - I've listened to Paul Merriman a lot at the beginning of my investing journey and it stuck to me - especially if my main ETF (VWCE) does not have much of small cap stocks. Nasdaq is purely my geek nature, but also I strongly believe that's where future lies - reading about bio-tech, phew :)


So I've decided to go as I've already written - IKE -> VWCE, IKZE -> 50% IUSN, 50% CNDX. I will check it after 2-3 years and in case of any obvious problems I will adjust. But any other case - from now on I will concentrate on taxable accounts.

Once again, thank you a lot for your valuable input - it was not only about the knowledge and experience, but also (and maybe that's even more important) I got some confidence in what I'm doing - of course I understand that potentially I'm making some mistakes, but at least I'm on somewhat right track :)
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Re: Poland - 29y, long term ETF portfolio

Post by OohLaLa »

markubik wrote: Mon Apr 05, 2021 9:32 am As a previously mentioned somewhere above, it's almost scary, how little people in Poland know about investing - I've started to read about it one year ago, and even though I'm not spending much on it and I don't know much (as you can see :P) I can clearly see that we don't have the culture of investing at all. My parents have really considerable amount of cash on their account, and inflation is slowly making it less and less valuable, but they are unable to try to put even just a fraction into something that is even slightly volatile. And they are both really intelligent, well educated and live in big city, so I can only imagine how it looks outside big cities :/ It probably has something to do with the possibility to do the wrong thing - having money that slowly loses value in the account is bad, but understandable and predictable. And even though smart investing is way better than just keeping money in the bank, stupid investing is waaay worse. So most of the people decide no to do anything at all. So yeah, I'm spreading my limited knowledge everywhere I can - I'm doing my part :)
Don't worry about it being a uniquely Polish thing; it's not! Same thing here: most Canadians have little to no savings and there is an absolutely huge reliance on the bloated real estate to act as retirement funds. Most people don't know anything about investing, overall.

As for the parents, it's the same thing for me. Really intelligent and educated but don't have trust in the stock market/ financial world, so if anything, they stick to things they think are very low risk. It's probably a common "old-school" mindset from the PRL days. As long as they are independent and able to support themselves, it should be OK. :)
markubik wrote: Mon Apr 05, 2021 9:32 am Once again, thank you a lot for your valuable input - it was not only about the knowledge and experience, but also (and maybe that's even more important) I got some confidence in what I'm doing - of course I understand that potentially I'm making some mistakes, but at least I'm on somewhat right track :)
Nie ma za co! Cieszę się że wymiany były takie pożyteczne!
markubik wrote: Mon Apr 05, 2021 9:32 am Hi, sorry for the late response, I was trying to verify my options properly before the title of this thread becomes obsolete (it's tomorrow :))
Sto lat (jak dobrze zrozumiałem komentarz o tytule haha)! :beer
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