Using ETF to invest

[willoneau]

I have opened an account for my daughter to invest her savings in EFT's over the long term any thoughts or idea,s?
She is not interested in trading, but leaving in bank is a waste.

 

[willoneau]

Strategy - two equity funds, one US and one AUS (both are aussie based) she has deposited equally in both to start. Will place funds in both as she saves, using a basic MA filter to only buy when price is above it and to save while below.

 

[Ann]

Strategy - two equity funds, one US and one AUS (both are aussie based) she has deposited equally in both to start. Will place funds in both as she saves, using a basic MA filter to only buy when price is above it and to save while below.

There is also the 'balanced' aspect to it all. Gold, cash, stocks, property. All these are wrapped up in ETFs. This is the kind of sh-t I am going to have to be looking at when the daughter produces a GC.

All I can say is best of luck Will...please post your conclusions. Any advice is welcome.

 

[willoneau]

Making her see sense in doing something is better than not doing anything was hard.

 

[Zaxon]

Strategy - two equity funds, one US and one AUS (both are aussie based) she has deposited equally in both to start. Will place funds in both as she saves, using a basic MA filter to only buy when price is above it and to save while below.

I like the idea of splitting equally between the US and Aus. I'd suggest low-cost, broad based index funds.

Beyond that, it really depends on whether your daughter has a personal interest in learning about investing. If not, I wouldn't even bother using MA filters. Adding to index funds in a buy-and-hold fashion, has proven a good return over time. For more interested parties like you and I, MA filters etc make sense.

 

[willoneau]

I totally agree, the buy and hold fashion is what i had in mind

 

[IFocus]

If you are thinking 20 years etc I wouldn't worry about the MA's, when you buy at lower prices you get more units haven't done the maths but suspect not much difference in the out come.

 

[willoneau]

the thought was to build up the saving when the price was traveling south and start buying again when price crossed back over deducing the average price of the units that were bought when price was going up. But Zaxon made a good point of why bother if she isn't interested in learning.

 

[Ann]

But Zaxon made a good point of why bother if she isn't interested in learning.

Well that is an excellent point, if she isn't interested she may just see the money as something she would prefer to spend and perhaps actually resent seeing it sitting there. How old is she?
If she is happy to see it held in a fund she might take more interest in it if it is growing using a fund which offers a DRP then she will see over time the magic of compounding interest.

 

[willoneau]

She is 18 and very good at saving, you right in that if she can see how the power of compounding works it might encourage her to take an interest as she matures. Too many other things going on in her life and she said all her friends wouldn't talk about it as it's boring and not cool.

 

[Ann]

She is 18 and very good at saving, you right in that if she can see how the power of compounding works it might encourage her to take an interest as she matures. Too many other things going on in her life and she said all her friends wouldn't talk about it as it's boring and not cool.

Yes 18 is a busy time for kids but I think you are doing a wonderful thing for her. Have you given her the 'Barefoot Investors' book to read? I gave it to my son years ago and he immediately bought into an unlisted fund on the advice in the book. It convinced him to invest far better than I could.

 

[willoneau]

I think getting her to read it might be too much of a challenge.
Might get it for me to read though.

 

[Ann]

I think getting her to read it might be too much of a challenge.
Might get it for me to read though.

I found it an excellent book, I wish I had had a book like it when I was 18. It left me thinking "can I just start all over again at 18!" You might be surprised, she may read it, it is aimed at people of your daughter's age. It is basic economic common sense, easy to read, easy to understand.

 

[willoneau]

Just read Barefoot Investor and enjoyed it, easy to read. Wife given it to read so we can be on same page then will see if my daughter reads it. Has some very good ways getting into the habitual process of reducing debt and saving.

 

[qldfrog]

Not sure where to add this
UBS pulls plug on $440m Australian ETF business
https://www.afr.com/companies/finan...-440m-australian-etf-business-20200319-p54bv7