I am basically a complete rookie when it comes to the stock market, but I have began to realise just how much I should begin to diversify. Few of my assets generate income, and any cash in the bank is losing value over time. I have read a lot about index tracker funds (eg Vanguard in Australia) - they sound great in theory as you effectively buy the indexed 500 (or however many the index includes) companies at one time, ensuring diversification throughout the market. I imagine if you had a bit of a cash nest egg, you could drop $5k in Australia, $5k in US, Europe, Brazil?, etc and be at least somewhat insulated. Of course reading articles in newspapers and blog posts always leave me somewhat sceptical, so I thought I'd see what the SS community has to say about it all. EDIT: Apologies, this was meant to end up in Stocks & Derivatives section.
Petey just make sure you stay out of Mortgage backed securities, people still have large sums frozen from the GFC http://www.afr.com/p/personal_finan..._frozen_fund_investors_3lKdZ6kbAIJfLyvAommpAJ
Ive been looking into this http://betashares.com.au/ for my SMSF. Thinking about the Ag and Oil ETF mostly. Might be what your looking for.
Hmm, nah - the point of these funds is that you are highly diversified - over a country rather than one company. http://barefootinvestor.com/how-to-invest-guide/index-funds/
Big fan of passive share funds. ASX VAS is one of the best ones (ASX300) IMO. Low rates and top 300 companies by capitalisation. Looking for a good international (fund or ETF) with a broad structure. Vanguard International Shares Fund (Unhedged) is my favourite at the moment, but would like a non-Vanguard one also. Anyone know of any?
If I had to pick one, it would be the listed investment fund ASX:WAM by Wilson Assest Management. I have met Geoff Wilson, and he knows his 5h1t. Take a look at the returns: http://wamfunds.com.au/WAM-Capital/Tabs/WAM-Tab-Overview.aspx
What happened to the share price in 2006? Seemingly instantly doubled in price, was there a share merger or something? https://www.google.com/finance?q=ASX:WAM In fact that was the third time it had happened, once in 2001 and once in 2003 also.
Yeah, fees seem a bit steep, until you look at the share price performance and dividend payments. IMHO, these investor returns after fees may well justify the fees. stock split/merger? looks like.
But doesn't that defeat the purpose? The whole reason the ITF is meant to be worthwhile considering is super low fees - essentially no "management" - you just buy the index.
It seems the standard Citigroup M1 Global ex-Australia Index. Macquarie offer it but minimum investment is $500k, I think maybe AMP offer it but they don't like advertising it so it seems.
This is the SPDR fund tracking the ASX 200: http://www.spdr.com.au/etf/fund/fund_detail_STW.html ASX code is STW.
If you just want to buy the index, then the cheapest way is to buy an Index CFD. If you want to try for a bit of out performance, then this will not come for free.
http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/ Probably been talked about but this was a good read for a chump like me.
As soon as someone makes a passive [World 2000] ETF or similar (2,000 biggest companies) or 10,000 or 1,000 WITH a dividend reinvestment option it will have a good flow of money into I'd say. Gaping hole in the current Aus investment market.
Management costs are more than the Vanguard equivalent if I am understanding it correctly: https://static.vgcontent.info/crp/intl/auw/docs/funds/factsheets/ret/vihisf.pdf?20130515|002600 Although the Vanguard fund seems to have a much better 3 month return - I would have thought their returns would have been basically identical given they use the same index.
Beware of survivorship bias when looking at past performance of index funds. Surprised a discussion of index funds and other forms of 'buying the index' has gotten this far without survivorship bias being bought up.
One has limited options at this point in time (IMO). PMs = speculation. They are a solid backup plan, but with the can being continually kicked into the future and smackdown after smackdown, it's hard to say "go all in". Real Estate = income, yes, but we know it is a largely overvalued asset. So what does one do? We know that assets that will produce income is a solid option, but they typically require work too (eg, buy a bobcat - you either need to then rent it or do the excavations yourself. Either option takes time (bookings, servicing, etc). I don't have enough knowledge to go in and buy shares in seemingly "bargain basement" companies, nor do I have a great deal of cash to invest. What I do want however, is to preserve the savings I do have.