Hey guys, I am new to investing. I am 26 years old with around $25k lying in my bank, so would like to invest in Vanguard.
Should I buy their best 4 different products or just one product? do you think this diversifying is beneficial or stupid?
Please guide me how I can put my money in.
Thanks.
Oh wise oracle - what can you prophesize is the fastest horse this year?
I'd recommend starting with reading the info at https://www.passiveinvestingaustralia.com/ which explains why diversification is important.
Or, you can skip straight to their Vanguard suggestions https://www.passiveinvestingaustralia.com/equity-funds but I recommend reading the background info so you can understand why each class is recommended.
I also recommend the book "The Psychology of Money" by Morgan Housel to help you avoid some of the mental traps that get people in trouble.
Damn the website is killer. Thanks
Vanguard Personal Investor. No broker fees for Vanguard ETFs and heard recently they remove account keeping fees. From recent YouTube Video by Michael and Sanjay, they recommended 2 Vanguard ETFs, one for overall ASX and the other is International. You can go 50-50, or more to international if you want more returns, really depend on your risk factor.
Vanguard ETFs now have $9 brokerage
HI yes, I just see it my self that it does have the $9 fees. Thanks for the update.
I believe they still have no brokerage fees on the managed funds tho
How to start
Don't put all $25k in at once, drip feed it in such as $1k a month - called dollar cost averaging.
DCA vs LSI depends on:
OP is a novice, so drip feed is best option - losing a big chunk with a crash could impact his emotional capital as well and cause him to stay out of market for rest of his life. A big windfall is also negative for OP - could think he's invincible, etc., take too much risk on later and go bust.
Market is at all time highs, so likely to fall sometime over next few years. Better to drip feed if entering now.
PS: Don't get me wrong I did big LSI's in March and April last year with my share portfolio and super (all shares). But then again, I'm an experienced (decades) investor and I invest for a living.
25k isnt enough to bother about DCA.
OpenTrader fees are $5 for less than $5k investment.
How much effort do you want to put in yourself, determining ratio splits and diversification?
Compared to the $ value you'll be investing?
For my vanguard fund i have set up for my kids, I dont want to think about it, and am happy to pay the small % factor for it to be set and forget, so I dump money regularly into VDHG via the vanguard personal investor setup.
(Was with them prior to their switch to personal investor, so not sure if my management fees are marginally less, but either way)
This gives a simple, minimal effort/thought option, that can be regularly deposited to and requires little on-going thought or maintenance.
Vanguard already diversify the risk to a broader investment portfolio but if you're extremely risk adverse then you could choose multiple product type to try reduce it even more (but multiple set of purchase fee)
which ETFs give dividends?
VDHG
Has Vanguard changed or something?
I put money directly into my managed fund every fortnight - It seems you cant do this anymore if you were to invest in a fund
Why has it become more complicated with all these separate accounts etc
Get life experience invest in yourself, half in investement, half on crack on girls
DingoBilly https://www.ozbargain.com.au/comment/11056288/redir
Oh wise oracle - what can you prophesize is the fastest horse this year?
.
“We like to put a lot of money in things that we feel strongly about. And that gets back to the diversification question.
You know, we think diversification— as practiced generally — makes very little sense for anyone that knows what they’re doing.
Diversification is a protection against ignorance.
I mean, if you want to make sure — (laughter) — that nothing bad happens to you relative to the market, you own everything. There’s nothing wrong with that. I mean, that is a perfectly sound approach for somebody who does not feel they know how to analyze businesses.” by the Oracle of Omaha.
I stick to what I know and that is not to diversify. 2021 just started and I've got runners ranging from +300% to +1000%. They could all double from here to the end of this bull run as long as they follow the trend.
Diversifying strong assets with slow ones would dilute the gains, incur extra Tx costs, consume a lot more time searching and managing them.
New investors would be better off getting in the habit of picking one or two strong assets from the beginning and then add on to those positions. They can over time learn to pick alpha assets instead of going with a basket of vanilla junk.
So, I have found three products that I'd like to invest in.
Australian Property (50%)
Australian Shares (30%)
High Growth (20%)
Is that a correct way to do it?
No it's not. To give you a rough idea, VAS has a fund size of about $9.5 billion, VAP has $2.3 billion. And they're highly correlated.
Also, about 90% of your money of that asset allocation is Australian equities. That is not diversification.
Have a look at this page: https://www.vanguard.com.au/adviser/en/diversified-funds/exc…
Odds are that as a first-time investor these would make a lot of sense and are a one-stop shop for having lots of diversification. That means VDGR or VDHG.
actually, super can be another attractive option if you are willing to wait 34yrs and tick other boxes.
A good starting place would be here