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From what I have learned here - ready to plunge; Vanguard ETF; thoughts?

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I have decided I do not have sufficient time left on the planet to learn about which individual stocks to buy and to understand all the different financial products. Someone suggested ETF's. They seem the perfect set & forget product that dilutes risk thru diversification built int.

Altho I don't know how an ETF and just a managed fund differ, to my noob eyes they are the same??

I think I am going to pull the trigger and buy Vanguard ETF"s. Anyone have any stories indicating they may not be ethical operators or bad characters?

Would you recommend them to a noob just wanting to hedge against inflation and not spend a lot of time researching and trading??

Comments welcome.
 
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I think it depends a lot on ones age and what you are trying to achieve, steady income, capital growth a bit of both? Then one has to consider how much money they have to invest and how much diversification they can buy.
Way too many variables to comment on IMO.
 
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ETF over say a LIC ??

just asking because a good ( sensible ) fund manager would tweak the strategy to suit market conditions ( preferring the skills they are best at , to do so )
Altho I don't know how an ETF and just a managed fund differ, to my noob eyes they are the same??

NO they are different and not just the fee structure , you NEED to understand the difference and each has their strong points ( and weaknesses ) ( i hold several ETFs and LICs and no managed funds , but that doesn't mean i'll never hold a managed fund )

and since each ETF is different ( even when then LOOK the same ) you still need to research the details

by the way i would NOT recommend any investment to someone not willing to do the independent research BEFORE putting in the cash

things go badly wrong , even when you are a veteran investor , take my trader buddy ( was in the market before the dotcom bubble )

he got scorched by ELD ( and for a while managed a dairy farm before that so not a noob there ) by ARI/OST ( as did i ) and BLY ( as did i )

now a passive index fund tracks the market ( up AND down ) and tracks it VERY closely almost all of it completely computer/data driven ( that can be either good or bad ) but if nobody is watching the computers that day those BAD things go very bad quickly ( several recent examples in the commodity ETFs and inverse volatility indexes show when computers run with the momentum , whereas a human is liable to reach for the brakes )

if you do proceed to investing in an ETF ( LIC , managed fund or share ) look at the various buying strategies , some will help your positive outcome big time

apart from Larry Fink ( head of Blackrock ) and the now deceased Jack Bogle ( Vanguard ) , most of the ETF management keep a fairly low profile , and stick to selling their newest investing theme ( and hope older products are increasing their reputation )

now one to watch is Betashares ( i hold several products ) they have complex products , often designed for traders rather than holders so you REALLY need to research anything interesting there

cheers and good luck
 

Value Collector

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I have decided I do not have sufficient time left on the planet to learn about which individual stocks to buy and to understand all the different financial products. Someone suggested ETF's. They seem the perfect set & forget product that dilutes risk thru diversification built int.

Altho I don't know how an ETF and just a managed fund differ, to my noob eyes they are the same??

I think I am going to pull the trigger and buy Vanguard ETF"s. Anyone have any stories indicating they may not be ethical operators or bad characters?

Would you recommend them to a noob just wanting to hedge against inflation and not spend a lot of time researching and trading??

Comments welcome.
Vanguard are very good.

The difference between an ETF and a managed fund is simply that an you by the units of the etf on the stock exchange, (etf stands for “exchange traded fund), that’s literally the only difference.

So etfs just like managed funds can be investing in almost anything, so you have to pick the etf or fund that invests in what you want, by the sound of it you would be looking for an etf that invests in an share index (an index is basically just a big list of companies), so something like VAS (300 Australian companies) or VGS (international companies ) might suit you.
 

over9k

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ETF's like index funds are passive - they're just buying into the index like the S&P 500 and that's it. Nothing changes day to day unless the index changes.

Actively managed funds are when you're de facto giving your money to some other people to trade - they'll buy and/or sell what they think is a good trade at the time. Superannuation funds do this.

You don't have any worries reference vanguard screwing you over as when you buy an ETF you buy a fund that actually owns the stocks in the index which is in stark contrast to an ETN which is actually basically just a loan where they promise to pay you whatever amount the index moves and so has the potential of default.

So, risk of default with an ETN, not with an ETF.


If you're worried about inflation, remember that if you own some of a company that benefits from inflation then if they're making money, you're also making money. I've been over this extensively in the "inflation" thread if you want to take a look ;)
 
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ETF's like index funds are passive - they're just buying into the index like the S&P 500 and that's it. Nothing changes day to day unless the index changes.

Actively managed funds are when you're de facto giving your money to some other people to trade - they'll buy and/or sell what they think is a good trade at the time. Superannuation funds do this.

You don't have any worries reference vanguard screwing you over as when you buy an ETF you buy a fund that actually owns the stocks in the index which is in stark contrast to an ETN which is actually basically just a loan where they promise to pay you whatever amount the index moves and so has the potential of default.

So, risk of default with an ETN, not with an ETF.


If you're worried about inflation, remember that if you own some of a company that benefits from inflation then if they're making money, you're also making money. I've been over this extensively in the "inflation" thread if you want to take a look ;)
the only thing to add there is to check CLOSELY which index is used ( some tweak that 'top 200 or 300 ' just a little bit ) that might be important to you
 
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Altho I don't know how an ETF and just a managed fund differ, to my noob eyes they are the same??

To get a basic understanding, may I suggest you have a read of this article.


There are other articles there which may also be of interest.

You may wish to read this thread which touches on some aspects. Best to ignore the dribble in it of which there is a fair amount.

 

Value Collector

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the only thing to add there is to check CLOSELY which index is used ( some tweak that 'top 200 or 300 ' just a little bit ) that might be important to you
Yep.

VAS uses the asx 300 (run by vanguard)
IZO uses the asx 200 (run by black rock)

There is not that much difference, but I prefer VAS because I would prefer the asx300
 

Value Collector

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To get a basic understanding, may I suggest you have a read of this article.


There are other articles there which may also be of interest.

You may wish to read this thread which touches on some aspects. Best to ignore the dribble in it of which there is a fair amount.


Here is a video that explains the creation redemption process, from black rock (the other big etf player)

 
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