Investing in Vanguard - Questions and Help

CheapskateQueen on 16/11/2021 - 15:07
Last edited 16/11/2021 - 15:23

Hi,

Firstly, yep, read through the previous forum posts (and various online sites).

I've never invested in shares before but I recently sold my property and have a decent amount of cash that I need to do something with.

I've opened up a Vanguard Personal Investor account, transferred some money over and will put money in a mix of ETF and managed funds. I like the idea of auto transfers of small amounts into a managed fund so I feel like the slightly extra management fee is bearable. I also like the idea of taking away the stress of trading on ASX. But I will mix and match. The aim is set and forget for the long term.

I can't seem to find the S&P 500 ETF in my account? I've been going through the various ETFs trying to see if it's going by a different name, and haven't been able to spot it. Anyone know what's going on? It's the same deal with VTS, it doesn't show up in my account but I'm looking at it right now on the vanguard website. What am I missing?

Still trying to figure out the right split of my investments. I understand that's a highly personal choice. I'm mid-30s and have recently learned of the 100 - age rule so that's a decent benchmark to assess my risk appetite. But happy to hear any feedback.

Also reading up on Dollar Cost Averaging (DCA) vs Lump Sum Investment (LSI) to see how I'll approach my initial investment. I'm surprised at the materials available on the ASX website, it's an amazing educational resource. Also keen for any tips on good books to read re investing in the market (please don't say barefoot investor)

Financial

Related Stores

Vanguard Australia
Vanguard Australia

Comments

  • deme on 16/11/2021 - 15:12
    -1

    As far as I can tell Vanguard doesn't offer on in Australia.

    VTS is the closest that vanguard has.

    IVV is iShares S&P 500 ETF

    • LemonShapedRock on 17/11/2021 - 21:49

      Why is this downvoted? It's correct.

      Vanguard offers VTS, it has something crazy like 4,000 US holdings to track the US market.

      Downside is that you have to fill out the dreaded US tax declaration once every three years.

      Personally I went with IVV just so I didn't have to fiddle with US tax forms.

  • deme on 16/11/2021 - 15:13

    Also reading up on DCA vs LSI to see

    dollar cost average vs Large-scale integration?

  • cashless on 16/11/2021 - 15:31

    I guess you are looking for VOO, (S&P 500 index fund) or VOOG (S&P500 growth fund) or maybe VOOV (S&P 500 Value index fund)?
    Probably can't get them through ASX, but if you opened a trading account that allows investing in the US, then the world is your oyster.
    You can access these ETF's and many more besides through a Selfwealth trading account. And there are others that offer access.
    SW fees for foreign trades are reasonable.
    Also right now, if you buy ASX ETF's they are free until 31st Dec 2021

    • CheapskateQueen on 16/11/2021 - 15:42

      ah yes, I've seen selfwealth mentioned a few times on here - i didn't realise they had different vanguard offerings. makes sense. thanks!

      • samyall on 16/11/2021 - 17:27
        +1

        Self wealth has access to the US market and all their ETFs.

  • djkelly69 on 16/11/2021 - 15:33
    +4

    any tips on good books to read re investing in the market

    Not a book, but a trove of information - https://www.passiveinvestingaustralia.com/

    • polol on 16/11/2021 - 18:57

      end the thread here

  • mskeggs on 16/11/2021 - 15:58

    Investing:
    Money Magazine for the vibe of what is hot and not in the market (my tip, buy the ‘nots’ and sell when they’re the ‘hots’)
    Warren Buffet letters to shareholders
    Ben graham - the intelligent investor
    A Random Walk Down Wall Street

    Be particularly careful as the current mania is driven by unbelievably low interest rates. Every investment except the most atrocious has been a great investment. When markets revert to the mean there will be a lot of sadness.

    Invest most of your money in a way that assumes you are investing for yourself in old age, and invest a small amount of your money for higher risk or trading type investments.

    • CheapskateQueen on 16/11/2021 - 16:13

      awesome thanks

      And yes I am reminding myself to stay true to my values / risk aversion levels. I have a huge chunk of cash right now (well huge by my standards) and I'm only putting in a small amount into the market. I mean maybe if i get my investor legs I'll increase the amount, but until then I don't plan on going crazy (even though it really hurts seeing the money sit in the bank doing nothing)

    • MrMarket on 07/02/2022 - 12:50
      +1

      Ben graham - the intelligent investor
      dated and bloody boring book, I read it 20 years ago, just get the summary from the web on chapter 8 and chapter 20 that is all you need from that book

      • mskeggs on 07/02/2022 - 14:02

        Very fair. I found it the same, also 20 something years ago, but it is referenced so quasi-religiously you need to know what it says because people use it as short hand for value investing.
        Especially in American finance media.
        Just looking at the introduction from Buffett right now he also recommends chapters 8 and 20, so you're in excellent company.

        • MrMarket on 07/02/2022 - 16:57

          back then it all about tangible asset like factories and machines etc…
          now the intangible rules the world, Google, Amazon, Microsoft, Apple etc..

  • Danam on 16/11/2021 - 16:14
    +1

    Hi CheapskateQueen, I'm in a similar position - a decent amount sitting on the sidelines, but keen to invest. I have read a bunch of books over the past few months and invested $25k to understand how it all works. It has been helpful to learn what it feels like to 'lose' a decent chunk of money and then have it 'come back'. People acting out of instinct/fear and withdrawing money at the wrong time is common. The approach that appeals to me is the one used by people in the FIRE movement (Financial Independence Retire Early). Firebug has a good website that explains some of the concepts. The consensuses across the board, from the most successful active investors, to pure passive investors is for people like us to invest in broadly diversified, low cost, index tracking funds. The thing I didn't fully appreciate in the beginning was the effect fees have on your investments. A MER calculator will help to show how unintuative it is that a small increase in fees can massively impact compounding interest all else being equal.

    I recommend a book called 'The Simple Path to Wealth' by J.L. Collins, and 'The Psychology of Money' by Morgan Housel. I found Barefoot was pressuring people to go down a path I have no interest in.

    For the record, after all is said and done, my investments are managed using ETF's via SelfWealth and look like this:
    34% VAS (Vanguard Australian Shares) - 0.1% MER
    55% IVV (iShares S&P500) - 0.04% MER
    11% (other fun ETF's like NDQ, SEMI and HACK) - ~0.5% MER

    I changed from VGS (Vanguard International Shares Ex-Aus) to IVV because of the .18% vs .04% MER. My average MER across all investments is 0.1%. There are popular all-in-one solutions out there, like VDHG (Vanguard Diversified High Growth), but the fees (0.27%) are not justified in my opinion. I would have preferred to go with VTS (Vanguard Total Stock Marget), but I want to hold only Aus domiciled funds. If there was a large market correction I might invest all my money then, otherwise I'll be investing a bit at a time.

    Vanguard Australia are for-profit, unlike their awesome low-cost, US parent company. Because of this I find some of their products and their investor platform too expensive to justify.

    • cashless on 17/11/2021 - 09:33
      +1

      Low fees is a good start, but it shouldn't be the decisive point in your portfolio

      • MrMarket on 07/02/2022 - 12:53

        if you buying the same thing low fee is a must
        if you buying s&p 500 ETFs or whatever index tracking you after, why pay more for the someone else tracking the same thing?

    • CheapskateQueen on 17/11/2021 - 22:01

      thank you so much for your detailed reply, greatly appreciated. I definitely need to do some calculations for the MER to see the long term impact - i've even been going back and forth between the VAS ETF vs Managed Fund cos it's 0.27% vs 0.29% I want to drip feed money monthly but the extra fee is making my eye twitch haha

      funny you mention FIRE - i'd honestly never heard of it until this last weekend, and now i seem to hear/see it everywhere

      I was leaning towards Vanguards personal investor but i'm so surprised i can't access all their offerings so I was checking out SelfWeath today. I just want to make sure it's all above board first.

      i think 25k is a fair amount - and probably where i'll land too!

      • Danam on 18/11/2021 - 18:26
        +1

        The passive investing crowd often bring up SelfWealth because it's CHESS sponsored and relatively cheap regardless of the transaction amount or asset purchased. They always give you 5 free trades (1 month expiry) when you sign up, but currently have unlimited free purchases until the end of the year, which is nice. The other nice recent additions are instant bank transfers into your trading cash account, and live pricing. Plus, you can move everything to a better option when they come along if you use a CHESS sponsored platform. It doesn't matter if the company goes bust because CHESS means you actually own the shares.

        Another popular one is Pearler. It is similarly priced, but has a feature to set up auto investing in a portfolio % allocation you can define. This could be handy if you don't want to balance your allocations manually when you make new purchases. Another one, Stake has recently come to Australia, and looks to offer $3 CHESS sponsored ASX trades - but I think there is still a wait-list whilst it is in a beta rollout.

        Whilst I agree that you shouldn't chose an asset based solely on the fees, if I was to put $500,000 in VAS (0.1% fee) for the next 20 years I could expect to pay $45,856 in fees. If the fees were 0.27% I could expect to pay $121,759. A fund charging a 2% fee would be $764,828 in fees, which is approx 50% of the final value of the fund. The longer I hold the fund the crazier it gets. All major S&P500 (or ASX200-300) investment options should achieve near identical results, so fees should be on the list to compare. Credit to Barefoot where it's due - he did make me realize that my super charges me a 0.4% / year fee, with next to no performance justification over a low cost, index tracking fund charging 0.06%. To make things worse, most of these fees will be deducted in my retirement years because that's when the funds are the largest.

        • CheapskateQueen on 19/11/2021 - 13:15

          you're amazing - excellent re the CHESS sponsored. yes, this was my concern. I wanted to make sure with SelfWealth that I own the shares as opposed to some kind of custodian/beneficial arrangement and i wasn't prepared to just trust the website's blurb on ownership

          and you're 100% spot on on the fees too - especially for something like VAS - the MER for ETF is 0.1% vs 0.16% (via Vanguard) which definitely adds up over time.

      • MrMarket on 07/02/2022 - 12:56

        Vanguards personal investor only offered their own product which limit your choice and they are not the cheapest
        IVV I think is the cheapest for instance

        CHESS sponsor like Stake account and buy your own ETFs after you done the research is probably best
        you buy whatever the heck you want without locking into someone else products

  • rektrading on 16/11/2021 - 16:24
    -1

    I'm here for the comments.

    • plmko on 16/11/2021 - 18:44

      Give us your most degenerate tips.

      • rektrading on 16/11/2021 - 18:48

        Pick the top stonks from the ETF and buy them directly.

        • Cricket on 07/02/2022 - 10:40

          Where / how do you find the top stocks held by ETFs?

          • Baysew on 07/02/2022 - 14:06

            @Cricket: asx.com.au is a good place to start. For example the listing for VAS shows the top ten holdings and percentages. However, might as well by an index ETF in one trade.

  • askme69 on 16/11/2021 - 16:48
    -2

    I just put money into the Combank Pocket, I'm up 14% so far, 8 weeks. My crypto went up 60% in the same time, dropped 6% overnight though.

    My brother has been using The Combank Pocket and mixing around the portfolio everynow and then. He was up 30% last financial year.

  • USH4NKA on 16/11/2021 - 17:16
    +1

    I wouldn't advise investing in the latest call of duty

    /s (sorry)

  • sundevils on 16/11/2021 - 17:24

    Look into every index offered through Vanguard AU to see what stocks make up the index. Some of them are weighted similar to the S&P.

    You can't invest into any US mutual funds as an Australian tax resident no matter what brokerage you use. You can only invest into the AU mutual funds. Although, you can buy ETFs.

    Don't fall victim to 1-year or last year returns. AU financial year S&P returned 32% but with dividends reinvested it was around 34%. I don't have ASX's data but it was around 30% too if I remember correctly. So theoretically if anyone didn't grow their portfolio by at least 30% last year they were doing something wrong. Look at returns longer than just last year.

    Invetopedia.com can be a great learning tool. *this is not financial advise

  • ihbh on 16/11/2021 - 21:16

    I recently sold my property and have a decent amount of cash that I need to do something with

    Don't do anything for 12 months. Psychologically get used to having the money there. Also, the market is very high driven by very low interest rates and high liquidity pumped into the markets by the central banks. No one knows when it will crash/pull back but it will. For a bear view see Jeremy Grantham's recent Bloomberg interview. That is, don't rush to get into the market, especially with a LS approach (which you've wisely mentioned you won't).

    Previously if you had more than $500k to invest you were a wholesale investor (vs retail) and paid much lower fees, which makes a big difference in the long term. You can just put it all in a cash fund and get used to having that cash and then gradually dollar cost average into some index share funds.. It might have changed so check for yourself.

    • CheapskateQueen on 17/11/2021 - 21:43

      I don't think i could wait for 12 months and not do anything - it would bug me too much. That being said, I've given myself some breathing space post sale and will be only be putting in a small amount at first. Really good point about the low interest rates driving the market

  • baker bob on 17/11/2021 - 02:28

    Google "passive investing australia" and read the whole website.

    If someone tells you to buy X or Y, ignore them. You need to understand concepts such as the various risks and determine if and how to hedge against them. We all have different circumstances, time horizons and risk appetites, it's just not constructive to know random bobs portfolio mix. You are better off understanding why you mix particularly ways.

    • CheapskateQueen on 17/11/2021 - 21:40

      awesome - that website is amazing! thanks

      and yes, great advice. I certainly wouldn't be investing in anything i don't understand or don't believe in. the indexed funds are right up my ally (now that i've finally bothered to learn), otherwise I would never just do as told. Crypto may have made me a millionaire but it was never for me

  • firestint on 18/11/2021 - 19:05

    Have you compared investing in Vanguard vs. Betashares ETFs? Some other good options to consider are diversified ones like VDHG or Betashare DHHF which have coverage in AU market but also US and other markets - higher MER but more convenient to buy in one transaction. Also agreed with others that DCA is the way to go. I would also set aside 10-15% for risker investment like penny stocks, crypto or more specific ETFs like HACK, ATEC etc.

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