Ing. Peter Pašek - Active Investor's Path Towards a Passive Approach
Mr. Pašek is the CEO 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 a lifelong passion. In the past, he had been intensely engaged in active trading, but like many active investors, he eventually understood the benefits of a passive approach and joined the group of Finax's satisfied clients.
“Over the past 15 years, I have tried active trading of stocks, currencies, and derivatives. However, when investing in an ETF, I feel that I have found a healthy ratio between risk and return. I basically moved from speculative trading to real investing.”
However, the main reason for Mr. Pašek's diversion from active investing were not the achieved results, but the time it consumed. Active approach prevented him from devoting as much time to his family and work as he wanted to.
“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 it consumes. This type of business really requires regular and focused market tracing.”
Although he did not completely abandon active trading, it is now a source of entertainment rather than the primary wealth-building tool. Mr. Pašek is already investing most of the money passively through index ETFs.
“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 investing as a long-term investment in the horizon of 15 to 20 years, in which I would like to profit with a relatively low level of risk. In my opinion, Finax has created a product that allows us to invest in such a way, even with low amounts.”
He got interested in Finax also due to the way we select index funds. Accumulating ETFs that we buy reinvest dividends instead of paying them out (which causes the ETF's price to increase). As a result, our clients do not have to pay dividend taxes.
“There is a difference between investing in a distributing ETF and paying a dividend tax in the source country (in my case in the Slovak Republic) or in an ETF that reinvests dividends, thereby increasing their value. For Slovak tax residents, such accumulating ETFs are exempted from capital gains tax if you hold them for at least one year. Thus, the tax setup has a large impact on the investment's final return. 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 charge low fees and have completely digitized the contractual relationship, which further enhances the company's overall good impression. I like online solutions and mobile apps due to their convenience.”
We thank Mr. Pašek for his trust. What is your story? Contact us and we will be happy to advise you on how to invest comfortably and profitably at lower fees.