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    • chimoaus
      chimoaus last edited by

      G'day all, I couldn't seem to find a financial advice thread, perhaps for good reason šŸ™‚ With all the wise heads on this forum does anyone have any experience with investing using indexed funds such as Vanguard ETF. Where do people put their savings now the banks offer such little return. I don't have a huge amount, but I need to be a bit smarter with my savings and thought I would ask here first. I don't have a mortgage and zero debt and would like to invest in 10k increments. Happy to hear what others are doing.

      1 Reply Last reply Reply Quote 1
      • B
        bayimports last edited by

        I have heard of Raiz and Spaceship here is Australia, but I have no experience with either, I am curious if anyone has had success.

        As for zero debt and no mortgage....you lucky bastard šŸ™‚

        chimoaus 1 Reply Last reply Reply Quote 1
        • chimoaus
          chimoaus @bayimports last edited by

          @bayimports said in Money/Investing:

          I have heard of Raiz and Spaceship here is Australia, but I have no experience with either, I am curious if anyone has had success.

          As for zero debt and no mortgage....you lucky bastard šŸ™‚

          Yeah, paying off the mortgage was our main priority and just made as many extra payments as we could, took 17 years to do it which is still a long time.

          1 Reply Last reply Reply Quote 3
          • nzzp
            nzzp last edited by

            @chimoaus good question.

            Was grappling with that question this year, before Covid rocked along.

            Looks like a bunch of ETF available. Reddit's NZFINANCE subreddit seems pretty keen on various promoters - sharesies and a couple of others (can't remember off the top of my head).

            Index funds are your friend, diversification helps you big time. Remember, you never know in the next few years what the markets are going to do.

            Good luck, let us know how you get on.

            Resources I liked
            the motley fool (UK version) - back in the day. Not sure how it is now
            Mary Holm (https://maryholm.com/)

            I read a book by (Bogle) I think about vanguard and index funds early on. I like index funds. They're boring, but accumulate over the years.

            1 Reply Last reply Reply Quote 1
            • canefan
              canefan last edited by

              I've generally bought individual stocks and done reasonably well. I do see the merits of a good fund though. Which funds can ferners recommend?

              1 Reply Last reply Reply Quote 1
              • Catogrande
                Catogrande last edited by Catogrande

                Index trackers have very low costs compared to active funds which is a considerable benefit. On the downside as they have to hold or simulate every stock in the chosen index you get to tread in every cowpat. The FTSE100 is a case in point. 20 years ago it was trading around 6900, today it is trading around 6550...

                Costs are important but not as important as value. You need to have your appetite for risk assessed and this should then drive your asset allocation to give you the prime make up of your portfolio. You then decide whether to gown down the active or passive route or a mix. Better to take advice (and pay for it) either way.

                Investing can be compared to jumping out of a plane. Do you want the cheapest parachute or the best one?

                G 1 Reply Last reply Reply Quote 2
                • canefan
                  canefan last edited by canefan

                  The Vanguard Growth and Vanguard Russell ETFs look pretty good. I might get in and harness growth on the US market. I usually trade US stocks using my bank's trading department in NZ, but the fees seem significant. Also you can't trade in real time, I generally lodge a buy order at market value. Is there any mainstream dependable online trading platforms that charge low rates that I can make trades myself in real time?

                  1 Reply Last reply Reply Quote 1
                  • canefan
                    canefan last edited by

                    Has anyone used Hatch or Stake to trade US stocks?

                    1 Reply Last reply Reply Quote 0
                    • sparky
                      sparky last edited by

                      Spread your risk.

                      1 Reply Last reply Reply Quote 0
                      • canefan
                        canefan last edited by canefan

                        My mate uses hatch. Says it's very cost effective if you are buying significant parcels of shares, only 3USD a trade. No real time trading but you can target price to buy and sell. I'm gonna have a go, much cheaper than ASB securities and they are the parent company to kiwibank so should be pretty safe

                        1 Reply Last reply Reply Quote 0
                        • G
                          Godder @Catogrande last edited by

                          @Catogrande love the parachute analogy! Continuing on the same track, it's hard to research the quality of a parachute yourself, so find an independent financial adviser, preferably one who doesn't rely on commissions.

                          Catogrande 1 Reply Last reply Reply Quote 0
                          • Magpie_in_aus
                            Magpie_in_aus last edited by

                            @TeWaio might be able to point you in the right direction.

                            TeWaio 1 Reply Last reply Reply Quote 0
                            • Catogrande
                              Catogrande @Godder last edited by

                              @Godder said in Money/Investing:

                              @Catogrande love the parachute analogy! Continuing on the same track, it's hard to research the quality of a parachute yourself, so find an independent financial adviser, preferably one who doesn't rely on commissions.

                              Yep, get one that charges for the advice not the transaction

                              1 Reply Last reply Reply Quote 1
                              • TeWaio
                                TeWaio @Magpie_in_aus last edited by

                                @Magpie_in_aus said in Money/Investing:

                                @TeWaio might be able to point you in the right direction.

                                (For NZ based people) I think www.piefunds.co.nz
                                is well run with a range of different options. I don't have any money with them currently but a friend of mine and @Magpie_in_aus works there in investor relations.

                                gt12 1 Reply Last reply Reply Quote 1
                                • JC
                                  JC last edited by

                                  Are you sure you want an ETF? You can invest in an index fund without going into an ETF.

                                  canefan 1 Reply Last reply Reply Quote 0
                                  • canefan
                                    canefan @JC last edited by

                                    @JC said in Money/Investing:

                                    Are you sure you want an ETF? You can invest in an index fund without going into an ETF.

                                    Whats the difference? I thought they were essentially the same....

                                    JC 1 Reply Last reply Reply Quote 1
                                    • JC
                                      JC @canefan last edited by

                                      @canefan said in Money/Investing:

                                      @JC said in Money/Investing:

                                      Are you sure you want an ETF? You can invest in an index fund without going into an ETF.

                                      Whats the difference? I thought they were essentially the same....

                                      They overlap but they're not the same. An ETF is simply any fund that is listed and traded on an exchange. That means they have variable pricing that changes throughout the day depending on the real-time prices of the securities that the the fund holds.

                                      An index fund normally doesn't have intraday or real-time trading. It has a daily price set at the end of the day just like a mutual fund or money market fund. It's fundamentally a passive investment.

                                      An ETF's purpose could be to follow an index strategy but there are ETFs for all sorts of purposes.

                                      You can buy directly into an index fund without going through an ETF.

                                      ETFs can be bloody expensive, and for small investors they may not be very efficient. The fees are usually quite a bit higher. If you think about it if you have someone tracking, buying and selling constantly throughout the day that creates an admin overhead that a passive approach just doesn't generate. There are a couple of other potential disadvantages. ETF's typically suffer from drag (due primarily to uninvested cash) that means while the fund may be tracking the index it may not be fully invested in that index. Any idle cash probably isn't earning at all, which dilutes the return.

                                      Depending on the ETF's fund manager, they may also be a bit slack at all of the entitlements stuff: collecting dividends, corporate actions, and chasing tax credits. It's a bit like trying to get a real estate agent to wring the last $1000 out of your house sale when they already have their mind on selling the next house.

                                      There's also a systemic issue with ETFs in this country as they are "listed PIEs" so by default they are going to tax any distributions at the full PIE rate. That may not matter if you are a top rate taxpayer, but if you aren't you won't be able to claim back the extra tax you've paid until the end of the tax year.

                                      It's not all bad news for ETFs though. If the market shits the bed if you have an ETF with a manager actively managing it they may choose to sell off everything in enough time for you not to lose your shirt. But if you're in a passive fund you're just going to be a spectator until the end of the trading day.

                                      canefan 1 Reply Last reply Reply Quote 5
                                      • canefan
                                        canefan @JC last edited by canefan

                                        @JC The Vanguard ETFs I was looking at in the US are traded as per shares like you say. No talk of fees, although I'm sure they can squeeze them in somewhere

                                        Product Details | Vanguard Advisors
                                        JC 1 Reply Last reply Reply Quote 0
                                        • JC
                                          JC @canefan last edited by

                                          @canefan In general, if a fund manager isn't quoting a fee and posting it as a debit to your account it's because they are deducting the expenses directly out of the fund assets. So you get a slightly lower return instead. There is a whole chain of people involved in the maintenance of the fund that clip the ticket along the way. Fund managers, fund accountants, brokers, custodians. If you assume that as a whole you are going to get charged $5 in expenses for every $1000 you have invested (i.e. 50 basis points) you probably won't be far away.

                                          canefan 1 Reply Last reply Reply Quote 1
                                          • canefan
                                            canefan @JC last edited by

                                            @JC said in Money/Investing:

                                            @canefan In general, if a fund manager isn't quoting a fee and posting it as a debit to your account it's because they are deducting the expenses directly out of the fund assets. So you get a slightly lower return instead. There is a whole chain of people involved in the maintenance of the fund that clip the ticket along the way. Fund managers, fund accountants, brokers, custodians. If you assume that as a whole you are going to get charged $5 in expenses for every $1000 you have invested (i.e. 50 basis points) you probably won't be far away.

                                            Understood, everyone has to make a living right? Considering they have increased in value by around 30% per year over the last two years to date, I would take that

                                            1 Reply Last reply Reply Quote 0
                                            • gt12
                                              gt12 @TeWaio last edited by

                                              @TeWaio said in Money/Investing:

                                              @Magpie_in_aus said in Money/Investing:

                                              @TeWaio might be able to point you in the right direction.

                                              (For NZ based people) I think www.piefunds.co.nz
                                              is well run with a range of different options. I don't have any money with them currently but a friend of mine and @Magpie_in_aus works there in investor relations.

                                              @TeWaio

                                              Still recommend these guys?

                                              I’m sending some money home to invest for at least a few years (likely much much longer).

                                              TeWaio 1 Reply Last reply Reply Quote 0
                                              • TeWaio
                                                TeWaio @gt12 last edited by TeWaio

                                                @gt12 yes, I've put some long term money with then recently and it's held up very well given the market volatility. Just pick the right fund for your time horizon / risk tolerance, and seek some professional advice on that if you need it.

                                                1 Reply Last reply Reply Quote 1
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