Ing. Peter Pašek - active investor's path to passive
Mr. Pašek is executive director and partner at Accace, one of the largest accounting and consulting companies in Slovakia. The world of finance is not only his job, but also his lifelong passion. In the past, he has been intensively engaged in active financial market trading, but like many active investors, he eventually understood the benefits of passive investment and joined the group of Finax's satisfied clients.
Team Finax | Our results | 23. October 2018
“Over the past 15 years, I have tried active trading on stock markets, forex and derivatives trading. However, when investing in an ETF, I feel that I have found a balanced ratio between revenue and risk. I basically moved from speculative trading to real investment.”
However, the main reason for Mr. Pašek's diversion from active investment were not the achieved results, but the time it consumed. Active investment comes at the expense of the time he wants to devote to his family and work.
“As far as intraday trading is concerned, especially in forex, I think I have achieved relatively decent results. But the problem was and still is the time. This type of business really requires hourly and focused market tracing.”
Although he did not completely abandon active trading, today it is just a marginal entertainment that he does for joy, not because of money. Mr. Pašek is already investing most of the money passively through index ETF funds.
“I believe that as a small investor, I will achieve greater returns on the market by copying it rather than trying to beat it. I just don't have time for that. However, I see passive investment as a long-term investment in the horizon of 15 to 20 years, in which I would like to profit with a perspective of a relatively low level of risk. In my opinion, Finax has brought a product to the Slovak market that allows us to invest in the long term, even with low amounts.”
He got interested in Finax also due to the way we select index funds. Accumulating ETFs that we buy does not pay out the dividend, but reinvest it in the fund - it will result in an ETF price increase. As a result, our clients do not have to pay dividend tax which is preferable for Slovak tax residents.
“There is a difference whether you invest in a distributing ETF and you pay a tax on the dividends paid in the source country, in our case in the Slovak Republic, or in ETFs, where dividends are reinvested, thereby increasing their value. With such accumulating ETF after one year of their acquisition, you are exempted from your capital gains tax as a Slovakia tax resident. Thus, the tax itself has a large impact on the overall return of the investment. I admit that the strategy of investing in accumulating ETFs has played a major role in my decision to invest through Finax.
In addition, I appreciate the rebalancing and, in particular, the fact that Finax is doing it with regard to the possible tax implications of each investor. Last but not least, they have low fees and have completely digitalized the contractual relationship, which further enhances the overall good impression of the company. I like online solutions and mobile apps, but I have found them mostly abroad.”
We thank Mr. Pašek for his trust. What is your story? Write us and we will be happy to advise you on how to invest easily, cheaply and with higher profits.