Hi all, about to start my investing journey in my very late 20s! Have been doing lots of research and have $ put aside but I still am having trouble determining what they 'key' things are I need to look out for. Have decided i'll invest in dhhf and a200 asx but with the latter would it be silly to also buy say CBA or BHP stock individually? Was going to use the Self Weath platform and definitely looking at it with a long term approach. Any advice/tips is much appreciated, cheers
New to Stock Market, Choosing Shares/ETFs?
Madfrega on 24/08/2022 - 07:37
Comments
@Madfrega
Keep it simple - as even pro's can't get it right, thats why you're looking at index ETFs in the first place. DHHF and A200 are superb choices, could you go with others? But I would keep simple and go with them. IMHO a 70-30 or so split is optimal - as Oz is such a small part of the global economy and all your current other assets are $AUD exposed - but feel free to go up to 50-50 if you want, the franking credits can be handy for some.If you REALLY feel strongly about an individual equity - ok sure - but you understand this is the complete opposite to index funds? So it's like having a foot in either camp. Honestly with A200 being so loaded on the big cap Oz stocks you'd already have a lot of exposure to the big banks (as you used that example) so I'd avoid - but just be aware it does contradict your investing approach to do this.
SW is good - I use Stake and also have a SW account which I use for market depth but I'm a long term ETF holder - did all the trickier stuff when younger to mixed results. If you're only buying every month or so 2 ETFs the $7 difference isn't a big concern.
Get your admin etc set up NOW - a free account with Sharesight will track all your buy, sell, tax info and make stuff a cinch - plus has great info on how things are performing.
Just be aware everyone has a magic combo of ETFs - but keeping it simple is very good and with those 2 (DHHF and A200) you've got superb diversification and lowest in class MER costs - so I'd stick with them and block out the noise. Just get in the habit of putting contributions in early - don't try and time the market, it's impossible and just causes angst over perceived missed opportunities.
Thanks for your detailed response. I should've mentioned i've got 15k set aside for it, should I invest it all now or just get my feet wet with say half of it? Probably wanted to look at maybe 3-4 diff etf's also. Thanks again
Up to you - the smart thing to do would be to DCA in over a number of buys - the more you do the more you offset risk at buying in at bad time.
I have 5 ETFs (A200, VGS, VGAD, VGE, VESG) and honestly I'd prefer to have 2-3. I'd remove VGAD atleast.
I'm not going to tell you what to do BUT I would say consider why what the extra ETFs bring that aren't already given by proportional buying of the one's you have already?
Sometimes it's really 6 one half dozen the other - so keeping it simpler is better (hence my original mantra advice). When you're younger you think that a couple of specialist ETFs etc are best - e.g a lithium power one or one on artifical intelligence/robotics. But the much higher MER plus risk of them dragging on your portfolio isn't viable (IMHO) plus again gets away from the idea of index ETF…..which is low MER and overall market exposure (as Buffett said).
The only ETF I think you could consider adding to A200 and DHHF is VGE - and only perhaps 5-10% as its shown to offset risk when paired with an established economy ETF. But DHHF does already have a small exposure to emerging markets, so slight duplicate IIRC. Happy to assist in some small way. Which other ETFs were you consdering and why?
Thanks mate i'll look into VGE. Was going to look into some technology and maybe lithium (just from chatting to friends who are interested in it) but obviously haven't really looked into specifics of either yet, but being a millennial I'm pretty aware that renewables are going to be a big part of our future
@Madfrega: It's all about risk. It is wiser to invest more in low risk than high risk. The more diversified it is, the lower the risk.
From the list that you have identified so far, ordered from lowest risk to highest:
DHHF
A200
BHP
CBA
Lithium
Tech
Dollar cost averaging is proven to not be worth it if you have a lump sum, just invest all at once.
Are you fine with potentially losing 25 percent in the short term.
what they 'key' things are I need to look out for
That you are ok with ups and particularly downs.
I meant more when selecting where I invest, definitely know there will be some losses along the way
Check the share code announcements on ASX before buying… my friend bought a VanEck ETF and around the time she did (i think it was before), they had announced they were ceasing trading that stock code in a months time, so she lost some money from that as people kept selling, rather than waiting for the final distribution
That would have meant you got the market value back when delisted and liquidated, thus no loss in the end. Could have even made some money by buying the undervalued etf knowing you'd get the true market value when delisted.
1) Consider cheaper brokerage firms - CMC is free for first <$1k purchase each day (selling still $11 but you won't be doing that often with ETFs). Stake is $3/trade.
2) DHHF already has Australian exposure in it so by going both DHHF and A200 you are doubling up on AU exposure. If you want really simple you could just go 100% DHHF. You don't necessarily NEED more ETFs unless you specifically want to start weighting them differently from existing options.
Personally wouldn't bother picking out the big blue chip companies in our ASX to hold individually, the top 200 companies are already dominated by the miners and banks no need to make that even worse.
Good point - forgot DHHF already had a lot of ASX200 in it. And it's a pretty high % if I recall - like 30-40%?
So thats bang on advice in that regard….could just go 100% DHHF - which works out pretty well. Don't worry about the people saying'Um can you handle it going down' - you clearly have looked into things and understand your investment timeframe.
My only other advice would be to be aware if you're planing a house buy etc to factor what that means for your investment.
Thanks, is it worth looking into maybe s&p 500 as well then? Or would that be pointless having both DHHF and that? edit: really appreciate the discussion, i am absorbing this all like a sponge!!!
Yes, as you say pretty pointless to have S&P500 and DHHF - considering it already has a big % of S&P500 exposure.
Honestly the more you write - and the more advice given on here I stand by my original advice.
Keep simple - JUST go with DHHF (nothing else is needed - thats the beauty of the product, if you still feel to you want extras, then perhaps DHHF isn't a good fit but I would resist the urge to think you know better - none of us do!)Tune out the noise - DCA in via a broker who's platform you like - brokerage is very cheap so far cry from days I started where you had to phone in and speak to a guy and it was nearly $100 each time!
Sometimes more info is a bad thing - read up on DHHF and then think WHAT else you would need and why? :-)
I wouldn't buy individual ones, just pick some ETFs etc and buy in chunks of 3k+ to lower the fee to purchase %, but keep some cash aside for lifes emergencies
buy every month if you can r every 2nd month etc, and try not to sell ever, keep your tax returns simple too, your older you should reap the rewards.
i like vdhg / vdgr to get international exposure but I am no pro at it so have a read and make your choice.i tried day trading a bit in different things, and although it gives you a bit of a rush, it didn't achieve much more than if i just left it, and my tax return is a nightmare now.
It's not silly to buy CBA or BHP. After deciding on how you'll split DCA between A200 and DHHF, take that amount from the 15k and split the remainder of the lump sum between CBA and BHP. Set both individual stocks to dividend reinvestment. Do not auto reinvest the distributions from the ETF, but have them paid to your bank account and add those distributions to the next time you invest in those ETF's. Do not DCA the individual stocks as the cost of brokerage will not be worth it.
For example, if you have decided to DCA $700/month into DHHF and $300/month into A200, split the remainder from $15000 into the two individual stocks: $15000 - $700 - $300 = $14000. Decide how you will split the $14000, e.g. $8000 into BHP and $6000 into CBA. Do not add to your BHP and CBA holdings but let the dividend reinvestment compound as well as grow in share price. The individual stocks are set and forget. Any distributions that you get from the ETF's get added to the $700 and $300 for that month.
ETFs only.
I'd suggest you look at the 10 year chart for ASX200, VGS, S&P500. If you are in your 20s because you got 30 years to go, buy the most high growth ETFs.
Only invest money you will not be touching for 10 years.
I think differently, if you are in mid 20s and single, you have a chance to take risks, it's good time to read about various sectors / stocks, and invest in ETFs and shares (60/40). Its better to loose ~5k then 50 / 500k in your 40s.
If you are only looking at long term and not care about learning, then ETF's compounding should ideally beat all others.Great advice on DCA. I would say stick with ETFs as they mostly cover major companies. I have invested in NDQ, ETHI, IXJ and VAS. Of course, these are not recommendations, so please don't blindly invest. Do your research and only invest in alignment to your risk appetite. Recently, I have also started a monthly contribution to 3 Vanguard managed funds, just to try it out. Although very similar to ETFs with respect to underlying holdings and being actively managed, they don't track to the ASX index. They have a NAV which gets set at the end of the day. So anyone buying into a managed fund on the same day at various times will always buy them at the same price.
Another piece of advice is to invest in your workplace if it is a publicly listed company if you are confident about its future. You'd generally have a better sense of how your company is performing. Many companies offer employees to buy into stocks by nominating a fixed percentage of their salary to go towards purchasing stocks.
Also saw CommSec are currently offering a promotion.
Join CommSec today and get $0 brokerage, valid for your first 10 trades. Limited time offer. T&Cs apply.
Taken as is from their website.
I actually made a commsec account a few months ago after first talking about shares with a friend but never did anything with it so guessing I am not eligible
I have been DCA into VGS and VAS for the past 12 months and also took a bit of a put and put a lump sum on NDQ.
Currently down about 4% but the key is to keep going and in 10 years time I should see a nice little profit..
Do you want to buy a house in maybe 5 to 10 years & planning on using these investments for part of a deposit?
If so what happens if the market is in one of it's regular downturns? That's why saving in a bank is the safest option for for future home buying.
Do you have any debts, credit card, personal loan, Hecs?
These sort of debts should be disposed of before considering sharemarket investing.I actually am hoping to buy an apartment in the next 6-12 months and have $ set aside for a deposit. Only debt is a HECS debt but not too worried about that. I've actually been seeing the boys from the 'passive income project' who have helped me sort out all my finances and hopefully steering me in the right path with investments (hence my research here!)
My plan is:
20% VAS (could use A200 instead)
70% VGS
10% FEMX (could use VGE)Managed funds seem to outperform index in emerging markets, but apart from that sticking with cheap etf’s
Regular dhhf or vdhg, via somewhere like cmcmarket (for sub $1k buys per day).
Low ongoing maintenance option, just buy a set amount every day/week.
Long term it's an easy 'set and forget' method where you won't need to re shuffle allocations or second guess yourself if you've picked the right smaller market segment.
If you're going to buy Australian shares you may as well get ones with a high dividend yield that is franked. Overseas investors don't benefit from the franking credit so you have an advantage there. There are a few ETFs around with a focus on dividends.
such as? was looking at the australian technology etf actually
VDHG /thread
Put it all on black and don’t look back.