Active Investors, what is your "routine"?

[ertyu]

Do you have a schedule on which you do the work required for your particular active investment approach? What is it, and why? Anything from "I rebalance on the 30th of every quarter" to "I spend 1.5 hours every morning doing XYZ and 3 hours on Sunday" applies.

[frommi]

weekly rebalance of my automatic portfolio 5 minutes per week and than 3-4 hours of reading every day. But i doubt its necessary, i do it because i like and am curious about it. Most of the money is made in the sitting and waiting.

[Seppia]

weekly rebalance of my automatic portfolio

Weekly? Your friction costs have to be huge, are you sure you’re actually benefitting from this?

[Dave]

I don't have a set routine, but rather my activity ebbs and flows with interest and what the current opportunity set looks like. For example, I spent some time looking at banks a few weeks ago as that was a very salient issue that presented some potential situations to act upon. When that happens, my "hours worked" might go way up and include Sunday nights to prepare for action at open Monday morning.

My overall process is to maintain a watchlist of companies that I understand well and have a set valuation on. I have price alerts setup for stocks that are within striking distance of action, but more broadly I import price data into my watchlist sheet once a week and sort by the price to value ratio to see what could be a future buy and what things I own are approaching a future sell. I don't update the valuation for each company once a quarter, but I try to follow all of the companies on my watchlist to keep the data set fresh and reasonably accurate.

I am also always looking at new companies, but this doesn't follow a systematic approach.

In general, the work occurs in spurts of activity. If there is a lot of market volatility, I'm looking more into things. If it's earnings season, I'm looking more into things. But sometimes I'm not doing a whole lot if there isn't much of interest on my watchlist or new ideas.

[frommi]

Weekly? Your friction costs have to be huge, are you sure you’re actually benefitting from this?

Yes. But that doesn't mean the whole portfolio is turned upside down every week. Last year my transaction costs in that part of my portfolio was 2% and annual returns run north of 25%. I did a lot of backtesting before starting this several years ago. This rebalancing frequency captures a lot of the ups and downs of my stocks which are very volatile and the rebalancing buys more of the cheap stocks and sells stocks close to their fair value. Less rebalancing didn't work nearly as well.
Edit: I think part of why this works is because of Shannon's Demon, just google it

[xmj]

Depending on which broker you use to implement Shannon's Demon, e.g. one with low/no-fees, this is also called a "self-financing strategy" where the rebalancing premium you harvest from continual volatility pumping leads to eventual outperformance net after fees.

See e.g. https://papers.ssrn.com/sol3/papers.cfm ... id=1479444 or my topical Twitter account https://twitter.com/shannonsdemon

I do weekly rebalancing on my Swiss retirement portfolio (pillar 3a, not entirely unlike a 401k) in that I add funds to one portfolio and it auto-rebalances to the target allocation. With two others I trigger that rebalancing by adding 1.00 CHF monthly -- which most papers seem to find as most optimal rebalancing schedule. Over the last six months the premium was in the neighborhood of 2-3%. Of course this should be a tad easier as my 3a provider doesn't charge trading fees [!]. And of course this is triggered by standing orders so the time required, once set up, is next to nil. Have written about this in more depth on LinkedIn and on the MustachianPost forum, a Swiss FIRE board.

Given how low the transaction fees on IBKR seem to be for US ETFs, you should be fine doing that there and if the assets are sufficiently uncorrelated (e.g. via Permanent Portfolio like structures), harvest plenty of gains.

[Henry]

Invest. Cry.

[chenda]

Invest. Cry.

I thought you had bought up a load of property Henry ?

[Henry]

We bought a new home that has appreciated 20% in two years which has helped somewhat.

[loutfard]

Depending on which broker you use to implement Shannon's Demon, e.g. one with low/no-fees, this is also called a "self-financing strategy" where the rebalancing premium you harvest from continual volatility pumping leads to eventual outperformance net after fees.

See e.g. https://papers.ssrn.com/sol3/papers.cfm ... id=1479444 or my topical Twitter account https://twitter.com/shannonsdemon

I do weekly rebalancing on my Swiss retirement portfolio (pillar 3a, not entirely unlike a 401k) in that I add funds to one portfolio and it auto-rebalances to the target allocation. With two others I trigger that rebalancing by adding 1.00 CHF monthly -- which most papers seem to find as most optimal rebalancing schedule. Over the last six months the premium was in the neighborhood of 2-3%. Of course this should be a tad easier as my 3a provider doesn't charge trading fees [!]. And of course this is triggered by standing orders so the time required, once set up, is next to nil. Have written about this in more depth on LinkedIn and on the MustachianPost forum, a Swiss FIRE board.

Given how low the transaction fees on IBKR seem to be for US ETFs, you should be fine doing that there and if the assets are sufficiently uncorrelated (e.g. via Permanent Portfolio like structures), harvest plenty of gains.

Yet another strategy not accessible to Belgian residents. There's a .35% transaction tax on shares here on both buying and selling shares..

I'll wisely refrain from discussing Belgian pension schemes here.

[WFJ]

No routine, haphazard. Spend more time when market has fat pitches (2020-2022) do nothing otherwise. Check balances once a week at most, sometimes once a month. Set email alerts in all accounts, % up or down YTD, don't bother otherwise.

[xmj]

How does that tax apply if you buy stock through a broker that's not domiciled in Belgium?

I'm asking because CH brokers also have to charge a stamp duty, but you bypass that by picking non-CH brokers...

[Seppia]

You would usually need proof of residence in whatever country you’re opening if though.

When I used Interactive Brokers they requested proof of address

[xmj]

Euro IBKR has domiciles in Ireland, Hungary (for EU clients) and UK (for non-EU clients, where PRIIPs regulation need not be followed).

They'd ask proof of address to verify and assign you, but I don't see how they'd have to follow transaction/withholding taxes from other jurisdictions.

[loutfard]

How does that tax apply if you buy stock through a broker that's not domiciled in Belgium?

I'm asking because CH brokers also have to charge a stamp duty, but you bypass that by picking non-CH brokers...

Belgian residents pay that tax when using foreign brokers too. The Belgian fiscal administration knows where you have foreign accounts. You have to declare them. There are active data exchange and steep fines to back that up. Either the broker collects the transaction tax, or you pay it yourself.

See https://financien.belgium.be/en/experts ... ansactions .

The space for tax efficient ERE saving and investing is somewhat narrow in general:
- 53.5% personal income tax from 42.370€/year (does not include 13.07% personal social security contributions)
- of almost all intellectually interesting side gigs, ~63% of gross goes to the state as a contractor, more as an employee
- stock transaction tax
- most Belgian dividends and interest taxed at 30%
- most non-Belgian dividends and interest taxed at 40.5% or more
- very low non-state pension savings schemes maximum (<1000€/year)
- only high TER pension savings available (from 1.3% TER/year)

The main thing Belgium has going for it is zero capital gains tax on most share or etf transactions. From an ERE perspective, that works quite well for:
- hereditary wealth
- wealthy immigrants
- residents willing to emigrate, earn and return
- extremely frugal low income residents willing to very carefully follow the state's fiscal carrots and sticks into very specific professional activities in terms of form and content

[white belt]

It mostly depends how active I want to be with my trading. I'd call myself a macro trader mostly so sometimes I trade short term trends, while other times I am just re-balancing my portfolio in accordance with where the economy is heading. The shorter the duration of my trades, the more actively I have to follow markets. At the moment, I have almost no short-term trades on.

Because I need to be on top of macro trends and global events, I will usually listen to a few macro-oriented podcasts each week. I think I've recommended various ones before. These will usually give a market wrap of recent events, as well as interviews and analysis from different traders. This is a good way to track new trends, however isn't sufficient to actually make active trading decisions. For that I have to follow markets daily and really be on top of things. I also pay for some data-driven macro research, which also allows me to stay on top of things from a data perspective. I don't trade only based on data, but it can be useful to factor it in with trading decisions. With stock and bond markets chopping around, I've mostly been doing a lot of waiting.

I'm still making a salaryman income, so it's relatively easy for me to re-balance by just dumping money into assets that I want to have a higher percentage representation in my portfolio. I try to limit taxable events when re-balancing, but with trading of course a lot of times it is unavoidable.

[zbigi]

- 53.5% personal income tax from 42.370€/year (does not include 13.07% personal social security contributions)

I once had a recruiter contact me for a non-remote contract in Belgium that paid particularly well, so I looked up taxation in Belgium, and the above shocked me. Holy cow. Is Belgium a welfare state paradise? Where does all that tax money go to?

[chenda]

I once had a recruiter contact me for a non-remote contract in Belgium that paid particularly well, so I looked up taxation in Belgium, and the above shocked me. Holy cow. Is Belgium a welfare state paradise? Where does all that tax money go to?

It's not particularly high compared with other Northern European countries. The UK has 40% tax above £50000 plus 13% mandatory social security contributions. I suspect Belgium pays for its zero capital gains by somewhat higher income tax.

[zbigi]

It's not particularly high compared with other Northern European countries. The UK has 40% tax above £50000 plus 13% mandatory social security contributions. I suspect Belgium pays for its zero capital gains by somewhat higher income tax.

40% above 57k EUR (50k GBP) is still much better than 53.5% above 42k EUR. Belgium has 13% national security as well. I wonder why do people bother to work well paid jobs there, if two thirds (53.5% + 13%) of what they make above 42k eur is confiscated by government.

[Bankai]

It's not particularly high compared with other Northern European countries. The UK has 40% tax above £50000 plus 13% mandatory social security contributions. I suspect Belgium pays for its zero capital gains by somewhat higher income tax.

The UK is a tax haven. A contractor on $150k a year can 'employ' their partner and pay them half the money, so £75k each, but both stash away £60k each into pensions tax-free and the rest is a minimum wage so tax-free. An employee on £100k can also stash away £60k into a pension and only pays £8,8k tax + national insurance on the remaining £40k. That's an 8.8% tax rate on the whole £100k. Feels like cheating, not to mention only benefits people in the top 1-2% income-wise.