Investing in shares doesn’t need to be complicated. Some people spend many hours analysing a single share. If you’re investing in individual shares and trying to beat the market this time may be worthwhile. However, it might be a good idea to simply invest a lot of your portfolio into broad-based exchange-traded funds (ETF) that will simply match the market for a very cheap fee. iShares S&P 500 ETF (ASX: IVV) and Vanguard MSCI Index International Shares ETF (ASX: VGS) are two of the cheapest and the best ETFs on the ASX. The Vanguard ETF looks to match…
You can continue reading this story now by entering your email below
Investing in shares doesn’t need to be complicated. Some people spend many hours analysing a single share. If you’re investing in individual shares and trying to beat the market this time may be worthwhile.
However, it might be a good idea to simply invest a lot of your portfolio into broad-based exchange-traded funds (ETF) that will simply match the market for a very cheap fee.
The Vanguard ETF looks to match the MSCI World ex-Australia index, its annual management fee is only 0.18% and it is invested in nearly 1,600 shares.
The iShares S&P 500 ETF includes approximately 80% of the market capitalisation of all publicly traded US shares, its management fee is a very-low 0.04% and (ironically) has 509 positions currently including cash-related holdings.
Both ETFs are invested in the USA’s best businesses like Apple, Facebook, Alphabet (Google), Amazon, Microsoft, Berkshire Hathaway and others.
Many of these companies are global leading businesses, they aren’t just American businesses. They generate earnings from many different countries.
Most Aussie investors don’t have enough of their portfolio exposed to the global share market. The ASX does have some good growth companies, but I think it’s probably a good idea to have more of your money focused on growth away from our island of only 25 million people.
You’d be right in saying that neither index looks cheap at the moment. I wouldn’t suggest selling the house and investing everything immediately. But, unless you have other global share market strategies I think it would be wise to slowly build up your holdings of one of these ETFs over the years to complement your other ASX holdings.
One international strategy could be to find ASX businesses that are growing overseas such as this top ASX stock that is just starting to expand into Thailand as well as delivering good growth in Australia.
It's been a nail-biter of a reporting season here in the first half of 2018.
But the real action, in my opinion, is what companies are doing with dividends.
What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.