ETF Exchange Traded Funds (ETFs) 2019

The essential purpose of a cash buffer is................so you don't go bankrupt.

The task for the rest of the month is to define "cash buffer" and stipulate what it should cover for how long.

And more than likely each individual household will have different definitions. So as our particular view is the right one they must all be correct.

 

Pfft, much to rational for my behaviour!

 

$82.08 for me Greedo, so you win . Back over $83 today hmmm maybe time to sell...

 

I bought that day for $82.34. But I'd put the order in the night before for $83.40 so I wasn't too disappointed.

 

Haha! Keep plugging away Taz

 

Hey guys

Apologies in advance if this is a silly/basic question.

I simply want to build a share portfolio over a 10 - 15 year timeframe with the eventual goal to generate some income from dividends. I put money into shares each month.

I'm trying to come up with a reason for not putting all my cash into VDHG.

I'm a fairly passive investor - I like to check selfwealth from time to time but I'm not overly interested in trading, etc.

VDHG seems to have a very broad exposure of AUS/US/Global markets given that there's 7 EFT's within it.

My investment timeframe isn't too short (I could stretch it out for longer if need be) - so the high growth fund should do ok (fingers crossed!).

There's just sooooo much info about what to buy, how to balance your portfolio, etc - but to me it seems that VDHG does all of that for me. I know the management fee is on the high side - but I can't think of any other reason to buy anything else.....unless I've missed something completely!

Cheers

Jamie

 

I do wonder about VDHG also. @Nodrog recommended VDHG before instead of VAS and VGS.

 

I think it’s a perfectly fine option all the reasons you’ve stated. A set and forget portfolio all in one

Doesn’t satisfy the urge to tinker for many of us... which is a nasty habit

 

If you guys know option you can buy ETF that has options over it and you write put and call all year round for extra income

 

It's risk as defined by academics, some people handle volatility better than others.

You will have money invested in every sector world wide at market weightings per AA of each underlying ETF (from memory). Can't really be less concentrated by sector or any other definition I can think of other than provider.

 

Mostly for behavioural reasons which is a big deal when it comes to staying the course.

Fees a little higher, and less tax effective compared to say VAS and VGS especially if outside Super.

 

Hi @Nodrog , could you please explain why it is less tax effective? Thanks.

 

Cheers Geoff - yep mostly property at the moment so looking to mix it up a bit

 

Fund rebalancing (capital gains), interest from bonds, currency hedging (interest, capital gains).

 

Cheers Nodrog.

 

I was (trying) pointing out that the definition of risk widely used isn't appropriate in all situations and for all investors IMO. A term deposit is regarded as low risk, yet current returns (especially after tax) trail inflation so a small loss is guaranteed in anything other than the short term I see this as high risk. The erosion of purchasing power over time is an under appreciated risk.
Of course one needs to consider one's own tolerances, it's just these one dimensional views of risk aren't overly helpful IMO.

The ASX accumulation (inclusive of dividends) recovered by 2013 - four years after the 2009 low, or six after the peak.

 

Speaking of risk I read, listen, aim to challenge my existing views continually by seeking out as many views to the contrary as I can find but I’m still of the view that if one can achieve it the dividend component of a well diversified portfolio is one of the least risky ways to create retirement income.

Investing in a Negative Interest Rate World - A Wealth of Common Sense

 

Apologies if this has been raised before (Sure it probably has searched and could not find it...)

Been reading Bill Bernstein's excellent book Four Pillars and seems like Jack he is not a huge fan on ETF's compared to traditional manged funds.
in his postscript he states the below the other 3 reasons are not as important but am curious on the fees/spread/brokerage issue.

I understand at some point would be like splitting hairs but given brokerage can be very cheap nowadays and the gap between the fees is not that much but would you lose that much overall on the spread I guess would also depend on how often you bought and parcel size..?



The criticism most frequently leveled at this book’s original
printing was the short shrift given ETFs. Indeed, since
the book was first published in 2002, the popularity of
these vehicles has grown to the point where they are
seriously challenging more traditional “open-end” mutual
funds. Nonetheless, I remain dubious; there is nothing
really wrong with ETFs, but I continue to believe that
most investors are better off with the older open-end fund
format. I do so for four reasons. First, the commissions
and spread costs incurred by trading ETFs quickly eat up
their minuscule expense advantage