Hey there! I'm looking to invest more than half of my income every month for the next 10-20 years and I'll start by saying that I have no intention to try and beat the market in general but I do have a high risk tolerance when it makes sense. ETFs seem like the obvious choice for my situation but I live in Denmark and ETFs are taxed at a higher rate than individual stocks here and can't be tax harvested so I've been looking at alternatives. I want my investments to be passive in the sense that I won't have to listen to market news and react to them, but I don't mind having to do rebalancing and the like. My ideas are: - mirror small indexes myself such as DOW30 abs OMXC20, but these seem to have a lower return than broader indexes and I'm not looking to reduce my risk for lower return. - Invest a significant portion in berkshire hathaway and possibly other similar holding companies but I'm not entirely sure if I would be paying too high a premium and sacrificing diversity - Pick random stocks from indexes of my choice. This would allow me to adjust my risk by choosing e.g. US. small cap indices for higher risk return. I'd be brave enough to do this but I suspect I wouldn't be able to resist ignoring some occasional random picks that are in Industries that I don't believe in, and I'm not sure if that would ruin the concept of not but trying to beat the market. - Bite down and try to become a decent value investor even though I don't currently have the spirit for it So do you guys have any thoughts on my ideas or any suggestions of your own? What would you do in my situation?
It tough when you have to make decisions around tax rules. How are mutual funds treated? What I like about them is that it is easy to dollar cost average with your paycheck monthly. What I hate is the year end tax bill when I have not sold anything. I financed my daughter's College that way. It was very annoying every year end, but it made paying fro college less stressful. As an alternative, if taxes are that bad on ETFs and mutual funds, berkshire hathaway sounds like a good choice.
Have you considered buying index futures (putting aside 100% margin) and just rolling them. It will create a tax event yearly but in an increasing market you will have cash transferred to you to pay the tax, in a falling market the tax event might even be "positive". In the futures contract there will be an implied financing cost but that is currently not an issue and when it becomes one you can but the excess margin in bonds. Just an idea.