Suggestions for investment in US stock/funds market

32 posts in this topic

Hi Everyone, Hope you are all enjoying the summer.

 

Wanted to know if any of you (in Germany/Europe) invest in the US stock markets or mutual funds. I do not intend to do day trading - just some long term investments. To clarify, I am not a US citizen so those options (if any) are not relevant to me. However, since I did live in the USA i have a US bank account and a SSN.

 

I did some googling and found that Interactive Brokers, Charles Schwab and other international brokers allow this. However, these seem to be tools geared for day trading and the costs (withdrawal charges and steep starting investment) may be justified if one is a day trader. Not so sure if its justified for my need. And then there are some threads suggesting eToro, Degiro and other names which I have not really heard a lot (though I admit I am a beginner and havent kept myself knowledgable on Fintech) 

 

Wanted to know if Toytowners have any suggestions for me.

 

Thanks in advance. Cheers!!

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Interactive brokers doesn´t have maintenance fees. So unless you trade, there will be no fees (except for e.g. fees for processing dividends from ADRs or certain corporate actions). If you want to invest into the US market passively, you might want to look at an ETF like DGRO or RDVY.

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28 minutes ago, jeba said:

Interactive brokers doesn´t have maintenance fees. So unless you trade, there will be no fees (except for e.g. fees for processing dividends from ADRs or certain corporate actions). If you want to invest into the US market passively, you might want to look at an ETF like DGRO or RDVY.

 

Thanks @jeba, is it straight forward to open an Interactive Brokers account to transact on US markets? Or can one transact on all world markets (including USA) using an IB account? I got a bit jittery seeing https://international.schwab.com/open-account-intro/open-account?country=GM&branchCode=EO which shows that Charles Schwab needs a minimum investment of USD 25000 for an account; maybe its different for IB.

 

Thanks for suggesting DGRO and RDVY; will keep these in mind once I figure out what account I need.

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The easiest way is probably opening an account with lynxbroker.de. They're an introducing broker for Interactive. Minimum I think is €5000.-.

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18 minutes ago, jeba said:

The easiest way is probably opening an account with lynxbroker.de. They're an introducing broker for Interactive. Minimum I think is €5000.-.

 

Thanks. Do you know a similar company which has operations, website, tools and support in English?

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Sorry, being German that was never a criterion for me, so I can´t help with that. However, you can switch the Lynxbroker client area website to English, and I´m pretty sure their support team does speak English.

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4 hours ago, catjones said:

What is the problem with Fidelity, Vanguard, Etrade?


I don’t know if there is any problem. I am just seeking suggestions.
 

I reached out to Fidelity in the USA over the chat option on their website and they told me that to open an account from outside USA I need to go to a branch in the USA (when I next visit USA next). I found that weird.

 

could you open an account in any of these while living in Germany?

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4 hours ago, yesterday said:

My German Bank  (DIBA), allows me to invest in US stocks and I think funds as well, maybe you should ask them


Aha, maybe I should ask mine as well - Deutsche Bank. However I Heard that banks charge very high transaction fees compared to the online broker platforms. Is that true?

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2 hours ago, GoldenLizard said:

could you open an account in any of these while living in Germany?

 

what's the harm in trying?  maybe your IP address will be a problem, but if you're opening an account online, you could ask a family member/friend in the US to open one for you.

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10 hours ago, catjones said:

 

what's the harm in trying?  maybe your IP address will be a problem, but if you're opening an account online, you could ask a family member/friend in the US to open one for you.

 

I meant is it illegal to operate a US account from here in Germany.

 

Regarding IP address, thats not a problem using VPN, but usually the financial institutions send mail with a code to your physical US address with a US ID for that address. I no longer have any physical address there.

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They will probably refer you to their European subsidiaries. E.g. my Lynx account (which is actually an Independent  Brokers account) is with the Irish branch of IB (I´m residing in Cyprus though, not Germany, which I doubt will make a difference). Which I don´t like because it offers less insurance protection in case of bankruptcy than the US mother would be providing (€ 20,000 vs. $500,000). US domiciled IB, Schab etc. declined my request to open an account.

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5 hours ago, GoldenLizard said:

 

I meant is it illegal to operate a US account from here in Germany.

 

Regarding IP address, thats not a problem using VPN, but usually the financial institutions send mail with a code to your physical US address with a US ID for that address. I no longer have any physical address there.

 

If you have a US account, you can access it from anywhere...internet doesn't care.

"Code"?  Never heard of that and I have four US accounts, but you will need a mailing address.  Ask friend/family.  Since almost all correspondence is electronic, it should be not big deal.

Instead of speculating, why haven't you tried to open an account?

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23 hours ago, jeba said:

They will probably refer you to their European subsidiaries. E.g. my Lynx account (which is actually an Independent  Brokers account) is with the Irish branch of IB (I´m residing in Cyprus though, not Germany, which I doubt will make a difference). Which I don´t like because it offers less insurance protection in case of bankruptcy than the US mother would be providing (€ 20,000 vs. $500,000). US domiciled IB, Schab etc. declined my request to open an account.

 

Well, I only communicated with Fidelity so far and they washed their hands off as soon as they heard that I do not live in the US. They said that irrespective of where I actually live, they could open an account as long as I could use a US mailing address backed up by an ID (like a DL). They also said that Fidelity International is an entirely different entity from Fidelity US.

 

I like the idea of Lynx or an equivalent as long as the interface is in English. Maybe I need to ask some Irish or British investors what they use. Am a bit confused of the ramifications if a brokerage firm goes bankrupt. Aren't they just relevant for buying/selling the shares/ETFs/mutual funds? Even if they go bankrupt, one's money is still in the shares/ETF/Fund company, correct? Or am I missing something here? 

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20 hours ago, catjones said:

Instead of speculating, why haven't you tried to open an account?

 

I have tried; I started the post after being turned down by Fidelity. Then I thought of tapping into crowd wisdom.

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2 hours ago, GoldenLizard said:

Or am I missing something here? 

Firstly, you may have cash even in a broker account and secondly it might be a huge mess getting stocks back from a broker during bankruptcy and meanwhile not being able to trade.

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4 hours ago, GoldenLizard said:

as soon as they heard that I do not live in the US. T

 

Why are you talking with them when the process can be done online?

I give up.  Good luck (you'll need it) investing.

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I don’t really follow. Do you think that you need to have an US broker account in order to invest in US companies? Is that what’s motivating you? Because you don’t. Any German (online, but only because they’re cheaper than the classic banks) broker (Onvista, Flatex, Diba,

Comdirect, Traderepublic to name just a few) obviously enable you to do this. So:

1) open a German broker account

2) buy a vanguard ETF, or fidelity, or Apple shares, or whatever

3) relax for a few years

4) Hopefully profit

 

PS: yeah, normally the interface of the online brokers operating in Germany is in German. That said, you really don’t need to know more than a few words in order to use them: learning the basics requires just a modicum of well spent energy. It’s not like internet providers, or water, or electricity go out of their way to accommodate their non-German speaking costumers anyway. 

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7 minutes ago, mtbiking said:

I don’t really follow. Do you think that you need to have an US broker account in order to invest in US companies? Is that what’s motivating you? Because you don’t. Any German (online, but only because they’re cheaper than the classic banks) broker (Onvista, Flatex, Diba,

Comdirect, Traderepublic to name just a few) obviously enable you to do this. So:

1) open a German broker account

2) buy a vanguard ETF, or fidelity, or Apple shares, or whatever

3) relax for a few years

4) Hopefully profit

 

PS: yeah, normally the interface of the online brokers operating in Germany is in German. That said, you really don’t need to know more than a few words in order to use them: learning the basics requires just a modicum of well spent energy.

You have to fill a separate form, otherwise the US tax authorities will charge 30% when ready to sell.

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