Saving for my kids...

[Ben Gordon]

I put some money into vanguard ? thanks everyone

 

[dyna]

Yeah,for the time poor and just about anybody else,for that matter,ETF's are the way to go.They survived the Covid crash and safely sailed through the GFC before that,so they're really here to stay now and the sector's value has just passed the $100 Billion milestone. Why pay a lot more for so-called active management that mostly can't even beat the index? Why even bother trawling through the market's share prices trying to do it yourself ?...... (I only do it for fun and to pretend I still have a proper job.)

 

[Value Collector]

Index fund is your recommendation?

I think specifically a whole of market type Index fund, when you buy into VAS and VGS as I mentioned (there are others also that are very similar) you end up being invested in over 3000 of the worlds largest companies.

You will have a hassle free investment where you are invested in everything from Apple, Microsoft, Google, Netflix, Disney, Facebook and Amazon through to names you have never heard off that produce cement in Texas, Electricity in California, computer chips in Japan, copper in South America, etc etc etc. You will basically be exposed to the entire global economy.

No need to worry if people are buying iPhones or Galaxies because you own both Apple and Samsung, it doesn't matter if people drink Coke or Pepsi because you own both etc etc, you will get dividends every 3 months that should grow over time that you can use to continue buying more units in the index and increase your (and your kids) ownership of global business.

 

[Value Collector]

Yeah,for the time poor and just about anybody else,for that matter,ETF's are the way to go.They survived the Covid crash and safely sailed through the GFC before that,so they're really here to stay now and the sector's value has just passed the $100 Billion milestone. Why pay a lot more for so-called active management that mostly can't even beat the index? Why even bother trawling through the market's share prices trying to do it yourself ?...... (I only do it for fun and to pretend I still have a proper job.)

Agreed, unless you have the time and willingness to bring a level of intensity and emotional stability that will allow you to beat the market consistently over time, Index fund ETF's are the way to go.

I am an Active investor myself, But if I started under performing the market or no longer had the time I would go the index route for sure.

Mine and my partners Super is actually 100% in the Global index, because I don't trust any other active managers except my self, and if I die my wife will be putting all of our investments into the index.

 

[over9k]

WOW!! The Holy Grail of investing and making out like a bandit...
Seems like one simply needs to hand over our funds to is 3x leveraged ETF and their clinical application of derivatives etc will ensure an onward march to prosperity.
I noted that their fund only began at the bottom of the 2008 crash looks very rosy to date.

I was also fascinated to see how they back dated their hypothetical returns to show how they could/would have make a bundle if they had been operating from the distant past. Interesting indeed.

It does seem like an alluring prospect. But i feel uneasy about the assumption that somehow all these trades will happen in the right way.
Just my thoughts.

The last person I remember who offered a guaranteed return on the stock market was Bernie Madoff . And he ceratinly had very respectable persuasive story.

Bernie Madoff: Who He Was and How His Ponzi Scheme Worked

Bernie Madoff was an American financier who ran a multibillion-dollar Ponzi scheme that is considered the largest financial fraud of all time.

www.investopedia.com

3 Triple-Leveraged ETFs, and Why You Shouldn't Buy Any of Them | The Motley Fool

It may sound like a good idea to multiply your investment dollars by three, but here's what you should know.

www.fool.com

Madoff was a fraudster. ETF's are not fraud.

 

[Value Collector]

Madoff was a fraudster. ETF's are not fraud.

Well, Just because because a fund is traded on an exchange (eg ETF), doesn’t guarantee it will be free from fraud or is not going to make unwise investment choices or blow its self up with leverage.

exchange traded funds are are great low cost easy way to access various investment funds, but you do still have to make sure you are investing in a good fund.

hence why I have suggest here going for the Vanguard whole of market index funds.

Yes you can access this fund via an ETF, but there are all sorts of other ETFs that have crazy investment strategies that I wouldn’t touch with a 6 foot pole.

The ETF form itself does not gurantee safety, all it tells you is that the fund has its units traded on a public exchange, you still have to make sure the strategy of that fund is sound.

 

[over9k]

Which is no different to saying that being a publicly traded company does not guarantee safety and you need to do your DD and check how it's audited etc etc.

I wouldn't hesitate to buy an etf from any of the big names.

 

[Value Collector]

Which is no different to saying that being a publicly traded company does not guarantee safety and you need to do your DD and check how it's audited etc etc.

Exactly, but when you said "Madoff was a fraudster. ETF's are not fraud", it sounded like you were suggest that the ETF structure it's self was some sort of protection from fraud, but as you would probably know Fraud has brought down everything from Publicly traded companies to Bonds etc, so that sentence doesn't really make sense.

I just want to point out to anyone that reads this thread now or in the future that an ETF is just like a bucket, you have to make sure you understand and are comfortable buying the stuff in the bucket, not just buy because its a bucket, because some of the buckets are filled with gold some are filled with crap.

I wouldn't hesitate to buy an etf from any of the big names.

At the end of the day Wall Street will sell you anything they think you will buy and they can earn a fee on.

I am not saying the big names will commit fraud, but they are certainly not shy about filling a bucket with Fads and gimmicks and marketing it for a fee, so buyer beware what's hot and fashionable today might not be so next year.

Also, if a fund is using a lot of leverage, the ETF structure won't stop the underlying fund blowing up if the market goes in the wrong direction, but the fund manager will earn fat fees while it goes well, and not lose anything when it blows up.

 

[over9k]

Seems we have another thread where you're keen to peacock and/or have an argument VC.

 

[Value Collector]

Seems we have another thread where you're keen to peacock and/or have an argument VC.

Huh???
Every single post I have made in this thread has been either answering a question or explaining something fundamental about investing.

If you have a problem with some one making a small but important critique on your comment if they notice something important that could be misunderstood by a beginner then I think you are being a bit fragile.

 

[Gunnerguy]

To be really simple, cheap, and set and forget for 10-20 years I would just dollar cost average 50% USSnP, 30% QQQ, 20% AX200, 20% Emerging.
Got to have more International than Australian.

Gunnerguy

 

[Value Collector]

To be really simple, cheap, and set and forget for 10-20 years I would just dollar cost average 50% USSnP, 30% QQQ, 20% AX200, 20% Emerging.
Got to have more International than Australian.

Gunnerguy

But that adds up to 120% ??? Also do you want to explain what each one is and why you recommend them?

 

[Dona Ferentes]

But that adds up to 120% ??? Also do you want to explain what each one is and why you recommend them?

Please don't explain, gun

 

[Gunnerguy]

No suggestions for you on where to invest the funds you have for your children but be aware of this

Children's share investments

Information about who is responsible for paying tax on dividends received from share investments made by or on behalf of children.

www.ato.gov.au

The other matter, which is morbid I'm afraid, is if it hasn't already been done, see if the grandparents have established a Testamentary Trust via their Wills. Minors are taxed at adult rates and that can overcome the issue above. Can be a very powerful vehicle. Have known of cases where childrens uni accommodation and other matters have been funded in that manner.

Maybe good to consider to incorporate a TT in the Wills of both yourself and your wife.

On the flip side, have also known of situations where a Trustee (a relative of the primary beneficiaries) has ripped off the benficiaries, so if you go down that path chose the Trustee very carefully.

TT in your will is a great way to help out in the future. I agree !!

 

[Gunnerguy]

But that adds up to 120% ??? Also do you want to explain what each one is and why you recommend them?

Sorry maths got messed up.
60% SnP - US is the largest market, briars, reserve currency, ‘democratic’, less risky than any detailed thematic ETF.
20% QQQ - Nasdaq, future technology growth.
10% Emerging - Population growth in Asia, higher return but higher risk than the above 2.
10% Oz - Local currency, but a Small focussed market, resources, banking, and Housing. Might even use this 10% for emerging instead but Oz resources over the long term with growing global population I guess you need to keep it in.
At the end of the day IMHO, a diversified Indexed International stock portfolio is best. The more focussed the more risk/return and one doesn’t know which sector (apart from probably US Tech) will do well long term, so the above would be for long term growth. There are hundreds of ETF’s out there. It’s horses for courses as to the percentages, but I would have International >Australian. At least they are the best long term asset category of all those possible. Set and forget. If one wants to be active then that opens a whole other dilemma.
All IMHO, DYOR, just trying to help.
Enough explanation Value Collector ?
Gunnerguy

 

[Ben Gordon]

Sorry maths got messed up.
60% SnP - US is the largest market, briars, reserve currency, ‘democratic’, less risky than any detailed thematic ETF.
20% QQQ - Nasdaq, future technology growth.
10% Emerging - Population growth in Asia, higher return but higher risk than the above 2.
10% Oz - Local currency, but a Small focussed market, resources, banking, and Housing. Might even use this 10% for emerging instead but Oz resources over the long term with growing global population I guess you need to keep it in.
At the end of the day IMHO, a diversified Indexed International stock portfolio is best. The more focussed the more risk/return and one doesn’t know which sector (apart from probably US Tech) will do well long term, so the above would be for long term growth. There are hundreds of ETF’s out there. It’s horses for courses as to the percentages, but I would have International >Australian. At least they are the best long term asset category of all those possible. Set and forget. If one wants to be active then that opens a whole other dilemma.
All IMHO, DYOR, just trying to help.
Enough explanation Value Collector ?
Gunnerguy

So I have 1200 in VAS which is a vanguard Australia index. I should also put some money into the international index also is what your saying?

 

[Gunnerguy]

G'day Ben and welcome.
Juz my worth.

Have you consulted a Financial Adviser?

Saving for your kids is a great idea, did that for both of mine, money matured when they turned 21. Both were life policies, can't remember the actual term but basically, invested monthly and covered them both if they should die.
From memory, payout was about 50% more than invested over the life of those plans.

Now, have you considered yourself in the picture?
What happens if you should pass from your mortal coil and can no longer contribute to your kids savings?

You say you're all new to this, hence my opening question about consulting a Financial Adviser, take up the offer of free first appointment. If nothing else, that consult will help crystallize your financial (any other) goals and objectives.

GL with it and long may you prosper.

Insurance Bonds I believe. Simply put, Kids are beneficiaries parent contributes, monthly (?). Day you start at age 3. 10 years contributions then ‘matures’. Beneficiary, kid, can then pay for school or Uni. Invested in what assets/funds the contributor decides, and what the bond offers. Internally taxed at Corp Tax rate, but at maturity no tax to beneficiaries. Contributions set at what the contributor wants at start (eg. $100 Pm), if you want to contribute more in say year 3, at $200pm, you have to stay at $200 for the Term, ie, if you increase the contribution you can’t reduce in the future. This is what I know from my studies, but may be 2 years out of date.
NOT ADVICE, DYOR.
Ginnerguy
(M.FinP)

 

[Gunnerguy]

Yeah,for the time poor and just about anybody else,for that matter,ETF's are the way to go.They survived the Covid crash and safely sailed through the GFC before that,so they're really here to stay now and the sector's value has just passed the $100 Billion milestone. Why pay a lot more for so-called active management that mostly can't even beat the index? Why even bother trawling through the market's share prices trying to do it yourself ?...... (I only do it for fun and to pretend I still have a proper job.)

I’m with you Dyna. 80% Index/thematic and rebalance every 6 or 12 months or at a reversal , then 10% play money ‘to try to pick winners and beat the market’, and 10% cash.

 

[systematic]

So I have 1200 in VAS which is a vanguard Australia index. I should also put some money into the international index also is what your saying?

Here’s the thing.

The point of agnostic investing is to be honest and say you don’t know what’s going to go well. But overall you hope the world will keep growing, so you buy a bit of ‘everything.’

As you learn, you might nuance it.

So...buying VAS is buying a bit of everything, in Australian equities. But what if you don’t know that Australia is going to go well? Our market has gone very well over a long time...will it continue?

Think of it from top down. The most agnostic might be to buy a bit of all the assets, all across the world.
Buying equities only is a decision to concentrate your allocation. Buying Australian equities makes another decision (you’re effectively choosing Australia over all the other countries).

Don’t misread me: that’s not necessarily a bad thing! But have some reason and thinking behind the decision.
If I invested in VAS it might be because (a) I think public equities will do well over the long term and is a practical option ‘better’ than bonds, gold, other assets for my limited capital; and (b) I think Australia will continue to do well, plus I plan to spend Aussie dollars (as I don’t plan to move) so my future needs also tie nicely to being overweight domestic stocks.

That’s why I pressed back a big at tech/a’s response (he has thick skin, he can take it). Not because he’s wrong. Crypto along with iron ore and whatever else it was, might be the outperforming allocation over the next decade or two. He’s probably smart enough to know. But what if he’s wrong, as unlikely as that might be?
That’s what the agnostic investor wonders. So, they go more broad than that.

So, back to you. Do you believe in stocks over property, bonds etc? And you’re happy to bet that Australia’s market won’t be a dud over the next couple decades? I hope you would say yes to both...because you’ve already said it (by buying VAS).

By the way: the above is all just food for thought! ?

 

[over9k]

So I have 1200 in VAS which is a vanguard Australia index. I should also put some money into the international index also is what your saying?

Correct. America's demographics are much better than everyone else in the first world and therefore a much better long term bet. You can invest into the S&P 500 index directly via the australian securities exchange with a leveraged ETF under the ticker of "GGUS".

I hold a significant amount of this myself


If you don't want to run the higher risk of a leveraged ETF, the normal one is IVV.

A leveraged etf just moves at 2-3x the market - so if the market went up by 5% it would go up by 15%, but if the market went down by 5%, it would go down by 15%.