Here, you can find an online version of our weekly Best Ideas Newsletter that is completely FREE, distributed on 18.07.2023. Get it sent directly to your email inbox every Tuesday.

Perhaps you recall my frustration at the end of May when I discovered that my bank was insufficiently compensating me for my deposits, despite the substantial rise in the interest rates.

What I want to share this week is how I managed to elevate my interest earnings by at least 4.5 times, and how you, too, can achieve this.

I shifted from earning negligible interest on one account and a mere 0.75% annually on another, to an average of 3.5% annually. While these sums might not lead to my early retirement, they certainly amount to over 4.5 times more interest.

The Root of My Email Initiative

Before I delve into the specifics of my actions, I want to address the motivation behind my regular communication with you:

“Primarily, the Quant Value newsletter has furnished me with numerous lucrative investment opportunities like: DELFI LTD. +76% in 8 months, JUMBO S.A. +51% in 7 months, and NIPPON PILLAR +59% in 9 months. All you need to do is follow the newsletter's guidance. It's simple.

Secondarily, if you seek to enhance your investment acumen, the newsletter consistently provides you with financial acuity (an aspect that is vital to me).”

Thomas, Germany

I am grateful for Thomas’ commendation!

This glowing testimonial makes all my dedicated research and writing immensely worthwhile.

As you are aware, my sole objective with Quant Investing is to share my investment experiences and assist you in augmenting your returnswhilst advancing mine. I employ all the tools and strategies that I discuss with you.

The Genesis of the Screening Service

This is why I initiated the Screener.

Upon departing from my banking tenure after 16 years, I sought a screener for my personal investment ventures, failing to find one that fulfilled my prerequisites, I embarked on creating one. The newsletter was added subsequently due to the influx of queries from subscribers about investment concepts.

As you are aware, the newsletter is the framework that I rely on in my own portfolio. If you are new to the newsletter, you can peruse additional details about it here: Obtain Investment Concepts from ONLY the Most Effective Strategies.

We even introduced a secondary newsletter to guide subscribers in investing in their tax-free accounts, advocating prominent companies that are readily accessible to purchase in most nations globally. For more information about the secondary newsletter, visit: The optimal large cap investment strategy ever

Terminating My Association with the Bank and Initiating Interest Earnings

About how I terminated my engagement with the bank and recommenced acquiring interest.

As I required a venue to retain cash in advance of investment, it was imperative for it to be a solution that fulfilled the following criteria:

• Low buying and selling expenses
• Ease of entry and exit
• Minimal fund management fees, 0.1% in the following funds

Narrowing It Down to Two Options

My search led me to two alternatives.

Option #1 was an ultra-short ETF bond fund.

This represents a fund that purchases bonds shortly before they mature (even long-term bonds), but due to the fund’s purchase within six months to a year before repayment, it does not carry interest rate risk. Consequently, when interest rates fluctuate, the bond's value may fluctuate significantly.

Option #2 was an ETF that mirrors the interest rate at which banks lend to each other overnight.

Both offer roughly the same interest rate.

The primary contrast lies in the fact that the ultra-short bond fund harbors price risk. For instance, during the financial crisis and the COVID crisis, the fund's value plummeted as a consequence of the underlying bonds' devaluation.

This does not transpire in an ETF that replicates interbank interest rates.

Payments or Accumulation

One more consideration. Should you procure a bond where the interest is compounded into the bond, i.e., capitalized? Alternatively, invest in a fund in which the interest is periodically disbursed.

The taxation framework here in Germany renders these alternatives equivalent.

If interest is compounded, I am taxed on it despite not receiving anything. If the interest is disbursed, it is taxed as interest income.

I elected to procure the bonds that disburse interest to facilitate my subsequent decisions regarding the funds.

Furthermore, if the interest is disbursed, the taxation scenario is clear-cut, unlike in the event of capitalized interest, compounded into the ETF without it being reported, necessitating the calculation and declaration of received interest in my tax return.

I believed it would be simpler if I received the interest directly, leaving no room for ambiguity concerning the quantum and tax implications.

Here are the Two Instances – This is NOT Guidance

Below are the two instances that I procured.

Kindly note that this does not qualify as personal financial advice. PLEASE conduct your own research to ascertain their suitability for you. It merely serves as an illustration of my steps to aid you in your decision-making.

The ultra-short bond ETF I procured was: iShares € Ultrashort Bond UCITS ETF

The European short term interbank swap rate fund I procured was: EUR Overnight Rate Swap UCITS ETF

I hope this offers you insight into managing your cash.

These are two instances of European funds in Euro, and I am confident that you can identify similar funds in your local currency.

Quant Value newsletter update

The six propositions in the North America portfolio have appreciated by an average of +15.7%, with Celestica recording a 42.4% rise.

The 12 propositions in the European portfolio have seen an average gain of +13%, with Carlo Gavazzi leading at 51.9%.

The 22 propositions in the Asia portfolio have experienced an average gain of +20.2%, with SAN Holdings soaring by 96.2% over nearly three years.

Shareholder Yield Letter update

All the suggestions are recent, as the initial ideas were introduced in May of this year. Thus far, all 12 ideas show an average increase of +2%, with HP Inc. the top performer at 14.4%.

Your Financial Gains Facilitator

PS To identify outstanding companies that precisely fit your investment approach, be sure to pursue extensive research.