ETF Exchange Traded Funds (ETFs) 2020

https://www.firstlinks.com.au/uploa...ail&utm_term=0_953154ac75-3af2de19d7-83792769

 

You're hit bid/ask spread costs (which are usually minimal), but I don't think an ETF holder incurs costs due to creation/redemption by market makers?

I might be wrong.

 

During turbulent times (like now) the market maker can step aside due to volatility and bids/spreads cost will widen, letting investors take the hit. You may also have noticed bond ETF's during this crisis have heightened bid/spread costs due to underlying bonds being fairly illiquid - this has been discussed widely recently on the bogleheads forum.

 

This is true. The wider spreads though are nothing like you get with LICs. Relatively speaking it’s a non issue imho

 

In a volatile market, the bid and ask spread will be larger but price is marked to market and tracked by computers so it fairly accurate to the seconds, so their ETF basket underlying asset say at this second $64
they may have 30c spread either side if you want to buy and sell normally it would be 5-10c, that because high volatile market leads to faster price fluctuation so they need this bigger spread to fill the order as accurately as possible

but the spread could be even larger say in a seller market as everyone wants to get out and they cant sell
the underlying security at the price people wants so they have to lower it even more.

same as in the bull market, if you got a large buy order and you cant buy the underlying shares at bid price you have to step up to ask price.

People have this funny idea that if you are in ETF you are safe from sell-off, no you are not as you can already see last couple of weeks, ETF goes down just as fast as the market due to this arrangement and that how it should be people free to come and go at any price they like.

Market implied volatility usually dictates spread and margin, the high the volatility the larger the margin and spreads.

ETF holder don't incur the cost if you don't buy and sell during this period, your MER is still the same, but buying and selling during this period you face larger spreads to minimise this risk don't buy at market put in a bid at a price point you want

 

Just announced:
Estimated Distribution Amount ETF ASX CODE CENTS PER UNIT Vanguard Australian Shares Index ETF VAS 68.5206

Similar amount to payments in January & April 2018.

 

Future distributions are no guarantee of past distributions or something like that. Better savor what we get and harvest some of it just in case.

 

Agreed, I'll be keeping a bit extra cash reserve in these uncertain times.

 

The future distribution will definitely be lower as hundred of company withdraw or delay dividend that supposes to hit the bank account in March-May

 

6 figure cash buffer and savings rate of around 78 to 80% of my wage for past 5 to 7 years has held me in good stead. I feel for the ppl out of work but ppl really need to spend less than they earn whilst working and have a buffer to cover unexpected expenses and events just like now so as to limit being a forced seller and be able to ride it out. I have always seen myself as old school in regards to knowing my financial position from 3 monthly balance sheet and profit and loss statements manually drawn up to have an understanding of my current financial position. Neighbors cruising around in brand new leased cars and redraw after redraw on mortgages and overseas holidays on the card to get the points and come back to work to pay it off. Now suddenly work has ceased and now 1 car gone, needing home loan relief etc etc and no other investments doing any work for them (etfs lics). Sad state of affairs but hopefully they can pull through. Just be lucky that ppl on here if they still have a job and have to ability to still buy shares whereas others have no coin put away whatsoever. Hence spend less than you earn and building at least a 6 month safety buffer sounds boring but lets one sleep at night with less worry.

Good day peoples.

 

Learnt this lessons yesterday...VGS were up at 72.50 I wanted to sell as thought it may have been an early morning peak before a drop so decided to sell at market...wasn’t to please when the order was filled at 70.55!!!

Still a fair bit more than I paid for them but cost me $500 in lost profit.

I know this probably makes me look like an idiot and some experienced share investors and traders may be rolling their eyes but I’m sharing for the benefit of others who are new to this game...don’t make the same mistake...

 

I guessed from what you have previously said about your neighbours @pippen they would not be in a happy place right now and that "right now" may continue for quite a long time.

“Annual income twenty pounds, annual expenditure nineteen nineteen and six , result happiness.
Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery”

One of my favourite writers, Charles Dickens.

 

Yep very nervous times for them (a few house up the road). In the good times washing the cars and everything is gleaming. Now it looks like the husband hasnt sleep in a week. The classic chasing the jones mentality and social media culture of today is ruining lives. Delayed gratification is a thing of the past. Very sad.

 

Very good. That should cover us for baked beans and @SatayKing for coffee for another month or two.

 

Small luxuries they are but darn good.

Plus home made bread probably (yes, I do have supplies of the ingredients.)

Man - and Woman - can live on coffee and bread. There goes the waist line.

 

My wife started making bread again today. She makes exceptional quality bread. We decided to stop buying from the local bakery given some of the staff there are still handling bread with bare hands. Plus we’re trying to isolate ourselves as much as possible.

Yuuummmm, an earlier picture of her sourdough Parmesan, olive and rosemary bread:

 

VAS is up again and trading at $66.70 as of 20 minutes ago.

My target price is $50, so I am seeing it head further and further away.

 

But... you only live once! /s
I was born and raised from a normal family in a third world country and have an income that is above the Australian's average. However, seeing how young people spend money in Australia, I still see my self as a poor lad!

 

Until it doesn't.

It's only flying north for a quick weekend holiday in the sun before heading south
again. My order is still sitting at 52 dollars. I am the eternal optimist compared to you

 

I've never seen so many people willing so hard for the stockmarket to go down. Bunch of vultures!

Source: I am one of the vultures willing the stockmarket to go down.