The Covid-19 pandemic this year has seen a surge of amateur retail punters have a go at short-term day trading.
But in volatile times, it's more important than ever to invest in shares for the long-term. That's the philosophy we follow and encourage here at The Motley Fool.
So when Vanguard this year launched an online investment platform that actually gave users no choice but to play the long game, we were intrigued.
"This challenging period will eventually pass," Vanguard Australia managing director Frank Kolimago said at the launch.
"And Personal Investor will help long-term investors to be well-positioned to benefit when it does."
Vanguard Australia head of Personal Investor, Balaji Gopal, told The Motley Fool this week that the platform made it easier to invest directly into the company's fund products.
"Vanguard ETFs you can buy without any brokerage fee on our platform. But we also offer ASX300 securities," Gopal said.
With access limited to in-house exchange-traded finds (ETFs), managed funds and just the 300 largest ASX-listed companies, Vanguard is discouraging short-term trading.
"Everything we're doing is to enhance that long-term investing mindset," he said.
"Small caps can grow faster than large caps, but they can also lose their profitability due to their size. Large caps are better covered and more diversified."
It's not about broking
Vanguard obviously prefers Personal Investor users to put money into its own index and managed funds.
"Broking is not going to be our business… We don't want to be a broker," Gopal said.
"We would rather investors invested in truly diversified portfolios, which is what our funds and ETFs offer."
But it added the ASX300 direct investment capability as a value-add, admitting some customers would become interested in ownership of specific companies.
Shares can be purchased with a brokerage fee of $19.95 or 0.15% per trade, whichever is greater.
Under the covers, the broking functionality is provided by an undisclosed "reputable" third party supplier.
Usage of the Personal Investor platform attracts an annual fee of 0.2% of the total account balance, capped at $600.
Stay the course
Regardless of whether they buy ETFs or direct shares, Gopal would like the Covid-19 novices to go about investing the right way.
"There are some investor groups that are chasing [quick] returns and high-yielding stocks," he said.
"But we think there's merit in talking about the benefits of low-cost, long-term investing. Just staying the course."
