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This bit lost to investors in the haystack?
"Whatever your investing goals, if you’re focused on growth, then shares are the most suitable investment."
Volatility just needed to weighed against time risk. The longer the period the less is the time risk.
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Originally Posted by Valuegrowth
I am not surprised of the same rhetoric financial advisors have (in both NZ and abroad) about investing. Buffet spells it very clearly that the new individual wanting a long term retirement plan should just simply buy the S&P500 ETF, such as the Vanguard VOO or VOOG (why both links make no mention of the Vanguard ETFs is beyond me). Anyways, Buffet says people should buy the lowest cost index ETF is not because it's a fully diversified asset, it's because the individuals are not likely to pick stocks in a successful way. Hell even actively managed funds do poorly and can't time markets either.
In the 1st link, if you adopt Peter Lynch's view, he believes every person can do better than the actively managed funds, when it comes to picking stocks. He points to individuals that are 'experts in their area of work'. For eg a cook working in the restaurant industry would know which up and coming restaurant is doing well and beating the competition. Likewise which hotel worker would know which ones are doing well in that industry getting all the customers. Or someone in automotive, etc. the list goes on. When the individual spends most of their time working in a specific industry, they will be better knowledged at buying stocks in those companies than the layman fund manager that sits in the office most of the time.
Charlie Munger has also been arrogant at managed funds saying their management skills in picking stocks are nothing more than doing what the others do. They use the argument to 'diversify risks' (he calls it diworsification) to achieve safe returns when all they are doing is text book stock picking that exhibits NO skill in how to beat the market index returns. That's because of 'mean reversion' ; when you behave like others through over-divisifying your portfolio by buying everything, the end results will automatically be the average of those results... and quite frankly in Munger's books, this method of portfolio diversification proves nothing in terms of skilled ability in when to buy or sell stocks.
But there's a whole can of worms to deal with when investing from a NZ perspective. Issues like taxation is rarely commented, issues like why dividend is preferred over capital gains, what is acceptable pay for these fund managers, who really serves in best interest to the investors?
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ETF Strategy?
ETFs are simply a tool to help realize your strategy.
Easy - passive funds, actively managed.
ETFs give you the ability to go as wide as you like (MSCI World Index) or as narrow as you like (the German mittelstand, physical platinum), and damn near every degree in between.
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Junior Member
What about hedging? From my research, the answer is no, extra expense for basically a 50/50 chance of paying off. But with the US dollar so expensive at the moment, if you are going to transfer some money to hedged or unhedged Total World Fund or S&P 500, would it be worth hedging it?
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Last edited by kiora; 27-06-2022 at 09:02 PM.
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Originally Posted by DTC
What about hedging? From my research, the answer is no, extra expense for basically a 50/50 chance of paying off. But with the US dollar so expensive at the moment, if you are going to transfer some money to hedged or unhedged Total World Fund or S&P 500, would it be worth hedging it?
An asset allocation matrix will cover several strands. You can more or less end up with a job as a fund manager.
There will be the traditional asset classes - what proportion to hold by class - in shares, bonds, infrastructure, property, commodities and so on.
There will be currency - what proportion to hold in your "home" currency, and what proportion to hold in other currencies.
There will be geography - what proportion to hold in your "home" jurisdiction and what proportion to hold "offshore". And of course the composition and selection of "offshore" is a never-ending source of amusement.
There can also be domicile - where do your holdings live? In your "home" jurisdiction or somewhere else. Is there an advantage in holding asset class A in currency B in an ETF domiciled in C?
And of course timeframe - when do you envisage cashing out and using the money? And where?
And of course the perennial favourite - tax!
Taxes here,
Taxes there,
Taxes bl**dy everywhere!
Last edited by GTM 3442; 28-06-2022 at 09:14 AM.
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Capitulation
"Doomed Stock Rally Burns Fewer Bulls After $10 Billion ETF Exit"
https://finance.yahoo.com/news/doome...201810307.html
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Junior Member
Originally Posted by kiora
Wrong thread
So... What Is The Right Thread?
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Junior Member
Hi, does PE ratio or EPS apply to ETF? For example, the PE ratio of smartshare TWF is currently listed as 74.45, while USF is 7.89. Does it mean TWF is way overvalued? Thanks.
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He meant he posted in the wrong thread by mistake.
Originally Posted by DTC
So... What Is The Right Thread?
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