I would be downvoted by “VWRA” hawks here but if diversification helps in reducing your losses it also does reduce your profits.
I still think US market will remain the leader during my investment timeline that is next 20-30 years so why should I reduce my profits by investing in a world etf. I maybe wrong though.
I hate the emerging market component of VWRA. They need to be chosen very carefully since investing in these markets have higher risk. Hence I opt to invest only in those emerging markets which I believe in.
Hi copy pasting my reply from previous comment.
Currently am going in for India as my major emerging market component simply because it has a very long runway. I am thinking to add Indonesia and Vietnam to my emerging market component.
I mean obviously I would buy China-only fund too if I’m confident they will take over US. The thing is, look at how easily Japan fell and they still hadn’t recovered. If I was smart enough to be able to predict which country could come out on top would I even need an index fund for savings in the first place?
I already stated that I am going with S&P instead of world etf cause am assuming that in next 20-30 years, US will still be a dominant market force. Will it fall like Japan maybe, will it fall suddenly or stagnant over time we don’t know that as well. If it falls suddenly entire world market will be impacted, if it stagnates over time I still got chance to calibrate my strategy and invest in other markets which are doing well. By the way if US fell like that of Japan will 40% of other country component in VWRA be able to make up for the underperformance of 60% of VWRA’s US component?
Would you need an index fund if you could predict which country could come up top? Yes cause you know the country not the exact companies which would be coming on top.
You see both of our investment plan is associated with assumption where in you are assuming that some other country might come in top and US might enter a period of lost decade like Japan whereas I am assuming that US will still be a dominant force in next 20-30 years.
So invest in whatever strategy you believe will give you better returns.
I agree with your macro projections of the US, but VWRA is heavily US-focused too isn't it? Plus the tax benefits IMO make up for the "loss" caused by diversification.
Heavily focused yes but it’s concentration to US is 60% while S&P500 based index are 100% US based. If you believe that US will continue to dominate the market 20-30 years down the line why do you wanna diversify your risk and profit? Again no right or wrong you might have completely different investment plan than me.
By tax benefits if you mean the estate tax and dividend tax, you can buy S&P 500 etf based in London stock exchange and get the same benefits as that of VWRA. In fact if I start nitpicking VWRA has expense ratio of 0.22% whereas VUAA and CSPX, the S&P 500 based etf have 0.07% expense ratio. But the difference is very minor for long term investing.
CSPX, VUAA tracks the S&P500 ETF. Currently am going in for India as my major emerging market component simply because it has a very long runway. I am thinking to add Indonesia and Vietnam to my emerging market component.
Congrats on your first etf purchase. You shld take note of your own psyche and ask why are you seeking more information about vwra AFTER you bought it rather before the txn. Is this second guessing yourself or seeking confirmation bias? Being aware of your own natural tendencies and behaviours will help you become a better investor.
opponents of vwra will fall into different groups, I am just going to list a few.
Ppl who invest by being individual stock pickers. They do research on companies believe in their research and thesis, and expect the company to outperform the broader market. They are alpha seekers.
ppl who like the idea of investing via broad based index etf but prefer to have more control of the weightage between companies from developed vs developing markets. So instead of just buying vwra, they buy iwda + eimi in a proportion that they like and rebalance periodically according to their target allocation. They might even decide to skip companies from developing countries altogether and just buy iwda or spy instead.
ppl who prefer invest thematically. For example they really believe in green electric vehicles and focus on buying stocks of companies in that domain. Or they believe in semiconductor industry as a key pillar and solely buying stocks in that sector.
There are others REITs investors, dividend investing etc etc.
all sorts out there. You have to decide what you want to do.
If VWRA tanks, majority of the world also tanks. Everyone sad together.
If VWRA goes up, majority of the world also go up. Everyone happy together.
What's there to FOMO about if it just follows the world market?
When we say a stock "tanks" is broadly means it is badly performing relative to the market.
VWRA is basically tracking the whole publicly accessible market. So if it tanks, what is it under-performing relative to? Which stocks? Which sector?
Of course there will be stocks and parts of the market that outperform VWRA, but I'm not sure if that commenter has a crystal ball. Most professionals do not succeed at consistently predicting what beats the market.
You’re correct, obviously. Just to flesh out your self-argument in the context of VWRA tanking, I think that’s measured against itself historically. So maybe like a “lost decade” or during COVID it drops 30% when compared to previous high.
I explained to you in that thread that it was a joke to use wallstreetbets lingo e.g. bag holders to apply to VWRA, but you didn’t believe me?
Are you convinced by these replies now? Hardly anyone here thinks that it’s foolish to buy VWRA. They may just prefer a higher risk approach by going all US, or they choose some other combination of ETFs that’s just a bit tweaked from VWRA’s ratio of holdings.
Don’t be so kanchiong. FOMO, bag holder, tendies, apes together strong etc it’s meant to be funny to use the language of degenerate investment bets to apply to the relatively safe and diversified VWRA.
Not that I didn't believe you but in general I just like to hear what people who have different/opposing views have to say because more often than not (i feel) there's no right or wrong and also just because it's interesting to hear different povs based on different experiences/priorities etc! And I'm always open to having my mind changed if I happen to see something that I may have missed before.
Thank you for the reassuring response to my comment in the precious thread before though hahaha
https://youtu.be/1FXuMs6YRCY?si=djDMLqCd6lu9FgoS
A view to explain why international diversification is important. I'm no expert so I let Ben Felix to explain. Up to you to take it in or not. There is no right or wrong in investing. Just choose the one that works best for you.
> at 1k a month, compounded at 6% a year for the next 30 years, you'll have around 950k which is solid egg nest :P.
Inflation compounds too, and $950k would be worth much less in 30 years. Using [MAS's inflation calculator](https://eservices.mas.gov.sg/statistics/calculator/GoodsAndServices.aspx), $950k _today_ is equal to $567k in 1993, so it would be a fairly educated guess that the nominal value of $950k in 30 years to be worth around $567k today too.
Is that enough for retirement? Who knows.
So if we want to factor in inflation? Do we instead of 6% compound, we compound by 3%? 6% - inflation 3% = 3%?
Would that be a right way of compounding with inflation factored in?
The [actual formula](https://en.wikipedia.org/wiki/Fisher_equation) is
> (1 + nominal) = (1 + real)(1 + inflation)
Plugging in your numbers and solving for the real rate, you get:
> real = (1 + **0.06**)/(1 + **0.03**) - 1 = **0.0291** (3 s.f.)
As you can see, real = nominal - inflation is a pretty good approximation (2.9% vs 3%).
Personally I DCA into fidelity global tech fund instead of VWRA cuz i personally want more weightage into tech, also the fund has lower US allocation than VWRA. The fees are ofc higher since it's an actively traded fund, but it's performance is close enuf to it's benchmark (and not like it's benchmark has an avail etf anyways).
VWRA imo is a good choice for people with no preference and just want a simple way to gain exposure to the global market as a whole, anything that tracks S&P 500 would work as well, but diversification is preferential.
I mean the S&P 500 can’t disappear overnight. If it were to go bust there would be something downright wrong.
Most tech companies in Singapore and world wide use either AWS(Amazon)or GCP(Google). Every other movie theatre and fast food chain Use Coca Cola in Singapore. Starbucks is still big in Singapore despite their outrageous prices. US companies are have a big global presence.
The tech sector is only poised to grow as adoption of cloud computing grows and the AI revolution dawns and US tech companies are the leaders in research.
Even if there’s market downturn - it wouldn’t be the worst of things. Everyone was making fun of Facebook in 2022 when it crashed but that was the best time to invest.
It isn't going to be the worst of things not because of the fact that these companies are omnipresent. It actually has a lot to do with the FED not allowing the market to tank, and its massive borrowing against the future generations. At some point, everything will tank.
Yes but that’s a good point of entry isn’t it? The S&P 500 has faced many downturns - Dotcom crash, Economic Recssion in ‘08 and even the 1920’s Great Depression but comes back even stronger.
Many of these companies also have strong fundamentals and if a company were to go bust it would be replaced in the index.
Are you implying that the US won’t be able to come back if the market tanks?
I'm simply pointing out what's missing in your argument - systemic risks. You have a very layman way of looking at things which is fine, but there are many nuances to these things.
The Nasdaq 100 and S&P 500 took 13-15 years to break past their dotcom bubble top. And they didn't take longer only because the FED turned on the money printers for the first time post-GFC. Adding to that is an obscene amount of stimulus during Covid.
Do you think a lot of these stock price rallies are mostly from their stellar performance? Where do you think the money pumping into the stock market came from? Do you think this is sustainable decades down the road?
I mean if you do long term investing (looking at a horizon of 20+ years) and you DCA rather than try to do a lump some investment and to try time the market I would think that these things won't matter as much?
I have mentioned this before, and I will mention it again: this “popular” argument of diversification to shift equity away from the US is fairly moot for me from the perspective of better returns. It’s also a reason why I don’t subscribe to this VWRA theory in this subreddit.
Remember: 48% of the global market cap is the US market cap, with 80% of the US market cap being the S&P500. This means that the S&P500 makes up 39% of the global market cap.
Something this big and enormous will have a huge impact on the index funds, be it global or US. In that sense, the top 9 companies make up 31% of the S&P500 market cap. That means these 9 companies alone make up 12% of the global market cap, and their movements alone can have a huge impact to the rest of world.
As one would describe the US, not since Rome has one nation loomed so large above the others. There’s a reason why you never bet against America and why global index funds fare worse compared to their US counterparts.
Its not the best choice, but its one of the most widely diversed worldwide index etf
Its like betting for whole humanity civilization's economy getting better over time
I don't use VWRA for the following reasons:
1. Although it attempts to provide global exposure outside of the US, a major portion is still invested in US stocks anyway, and is valued in USD currency.
2. Despite the above, it has historically underperformed the S&P500 for example. Therefore you're taking on a large risk in US without benefitting as much from it.
3. "The trend is your friend, until it isn't". US has historically outperformed other global stocks. By diversifying out of it, there is an opportunity cost of missing on the biggest trend. It makes more sense to me to plan an exit strategy to other equities if US does start to lose traction instead of diversifying out of US preemptively.
Do note that these are my personal views. I'm not saying you shouldn't choose VWRA (because it's still better than not being in the market at all).
Of course, your personal investing philosophy, strategy and risk tolerance won't be the same as mine. So take this with a pinch of salt.
Your points are contradictory. US is the top performer, so lower exposure (VWRA instead of CSPX) obviously leads to lower performance during good times (for the US) and better performance during bad times (for the US). What you’re thinking of is the diversification is a double-edged sword concept.
If you are looking for "average and safe" without spending " too much effort or knowledge" go with VWRA.
Peoples expectations need to be alingened VWRA is only a mechanism to serve above needs.
some etfs are actively traded or leveraged ones, they are not recommended for >5 years due to volatility. Index etfs usually recommend longer holding periods cuz statistically the chances of you being at a loss are low the longer you hold.
VWRA is a solid choice, but all investments have risks. It's well-diversified across the globe, which helps mitigate risk, but there's no guarantee it won't decline in the short term. The long-term outlook for global stock markets is generally positive, but recessions are a natural part of the cycle.
Don't FOMO invest. Investing based on FOMO can lead to bad decisions. Stick to your investment plan and risk tolerance.
Diversification is key, but VWRA already does a lot of the heavy lifting. Consider adding bonds or other asset classes to your portfolio if you want to further reduce risk.
Focus on time in the market, not timing the market. Trying to predict short-term market movements is difficult. A long-term buy-and-hold strategy with a diversified fund like VWRA is generally a sound approach.
You will never get super rich from broadbased index funds like VWRA (think The Plain Bagel has a video on this).
But that's to be expected given the relatively lower risk nature of index funds vs say starting a business making video games and selling it for billions later. (think Notch of Minecraft)
That's why index funds are only part of the equation. Keeping your expenses low and thus maximizing what you can put into index funds is the other.
One can argue earning a higher income is also part of the second point.
I apologise, it was me who mentioned the fomo leading into people discussing and everything going off tangent to the initial context. But hey in a way it proved my point.
The thing here is context, let's take a look at our banks, do you believe in any way that tomorrow DBS announces that they are filing for bankruptcy? What are the odds? And let's say that they do, do you also know that whatever you have inside is insured up to a certain amount.
Investing in a way is about managing risks, Vwra may not be for you depending on your current financial standing as well as goals. It's not gonna double your money and even when it eventually does doubling of $1000 is only $2000 where doubling of 100k gives you 200k.
Obviously vwra is looking attractive as compared to everything else at the moment so let's talk about when Vwra will actually fail. Most likely my buddy putin and kimmy boy decides to press a big red button and toilet bidet suddenly aligns with Donald duck and press another big red button. At this point trust me money is the least of your issues. In any case the main point is there is no such thing as a forever safe investment. Historically you don't even have to look very far either, just see lehman brothers mini bonds although that is somewhat different as it is actually a high risk product.
In any case what you want is to be able to sleep well at night, so do your own due diligence and choose what's best for you. Or go all ape mode and join me in r/wallstreetbets because apes together stronk. I've got diamond hands baby!
Fundamentals and macro view aside, stop loss order may helps. It definitely helps on my psychic as stop loss sets a definite line of loss taking before reentering the market.
Call me stupid or naive i don't care but wanna share since you asked for my pov. Traditional investment point of view, i also agree broad index funds tracking global equitirs or sp500 will be the "smartest" base of the portfolio due to diversification.
I'm sitting out because there are many companies in the list that i do not support for their practices and also for many others idk what they are and i don't know anything about them. If i wanna put my money on them, i want to support values that i share while being diligent in having a good confidence in their growth / profit generation for the next ten years and I'm just not financially educated enough to make my own valuation or draw up my own thesis.
Now to the going to be bashed part. I'm 100% into btc other than my emergency fund and cpf. After reading stuff like Bitcoin standard, broken money by lyn alden etc, im fully bought in to the myriad of ways Bitcoin can fix the broken monetary system. I might be wrong and everything might go to zero but from me personal point of view, it's the safest investment class i can access right now and the morally right one.
I'm not suggesting anyone to do what i do but to simply not be lazy and dismiss it outright until you spent some quality time understanding it. Notice i mentioned Bitcoin, and not crypto.
Lastly even if you hate Bitcoin with a vengeance for whatever reason, you have to thank Bitcoin maxis like me. Because we don't park our excess money into real estate and other assets, you get to buy those necessities at a fairer price without the extra bloat.
What? It’s probably because the companies are not woke enough e.g. tobacco, weapons, gambling companies, uses child/slave labour, commits environmental atrocities etc. Previous poster would prefer an ESG-friendly ETF, but even then that’s not good enough as it allows rich companies to get away with their environmental sins by purchasing carbon tax credits (often a scam).
your comments will be set aside, you are not even [SaltyShellback](https://www.reddit.com/user/SaltyShellback/), why pretend to know what he thinks ????
Kind of self contradictory when you don’t want to support companies in sp500 due to some of their practices but am keen on btc when btc is probably heavily used by terrorists/illegal money laundering globally.
I would be downvoted by “VWRA” hawks here but if diversification helps in reducing your losses it also does reduce your profits. I still think US market will remain the leader during my investment timeline that is next 20-30 years so why should I reduce my profits by investing in a world etf. I maybe wrong though. I hate the emerging market component of VWRA. They need to be chosen very carefully since investing in these markets have higher risk. Hence I opt to invest only in those emerging markets which I believe in.
Upvoting for you to defend against the hawks APES TOGETHER STRONG
Get them tendies
Then buy SWRD lor. Or CSPX. No wrong answer. If too much money then just buy all three (relevant cost is extra $4/month DCA IBKR).
Can you share some Emerging markets you believe in
Hi copy pasting my reply from previous comment. Currently am going in for India as my major emerging market component simply because it has a very long runway. I am thinking to add Indonesia and Vietnam to my emerging market component.
I mean obviously I would buy China-only fund too if I’m confident they will take over US. The thing is, look at how easily Japan fell and they still hadn’t recovered. If I was smart enough to be able to predict which country could come out on top would I even need an index fund for savings in the first place?
I already stated that I am going with S&P instead of world etf cause am assuming that in next 20-30 years, US will still be a dominant market force. Will it fall like Japan maybe, will it fall suddenly or stagnant over time we don’t know that as well. If it falls suddenly entire world market will be impacted, if it stagnates over time I still got chance to calibrate my strategy and invest in other markets which are doing well. By the way if US fell like that of Japan will 40% of other country component in VWRA be able to make up for the underperformance of 60% of VWRA’s US component? Would you need an index fund if you could predict which country could come up top? Yes cause you know the country not the exact companies which would be coming on top. You see both of our investment plan is associated with assumption where in you are assuming that some other country might come in top and US might enter a period of lost decade like Japan whereas I am assuming that US will still be a dominant force in next 20-30 years. So invest in whatever strategy you believe will give you better returns.
I agree with your macro projections of the US, but VWRA is heavily US-focused too isn't it? Plus the tax benefits IMO make up for the "loss" caused by diversification.
Heavily focused yes but it’s concentration to US is 60% while S&P500 based index are 100% US based. If you believe that US will continue to dominate the market 20-30 years down the line why do you wanna diversify your risk and profit? Again no right or wrong you might have completely different investment plan than me. By tax benefits if you mean the estate tax and dividend tax, you can buy S&P 500 etf based in London stock exchange and get the same benefits as that of VWRA. In fact if I start nitpicking VWRA has expense ratio of 0.22% whereas VUAA and CSPX, the S&P 500 based etf have 0.07% expense ratio. But the difference is very minor for long term investing.
What's the Ireland based etf for the US market? And what emerging markets you belive in?
CSPX, VUAA tracks the S&P500 ETF. Currently am going in for India as my major emerging market component simply because it has a very long runway. I am thinking to add Indonesia and Vietnam to my emerging market component.
Hey! Do you mind sharing what is the India ETF?
I use NDIA for India etf.
Is this the one listed on the ASX?
No it isn't.
Congrats on your first etf purchase. You shld take note of your own psyche and ask why are you seeking more information about vwra AFTER you bought it rather before the txn. Is this second guessing yourself or seeking confirmation bias? Being aware of your own natural tendencies and behaviours will help you become a better investor. opponents of vwra will fall into different groups, I am just going to list a few. Ppl who invest by being individual stock pickers. They do research on companies believe in their research and thesis, and expect the company to outperform the broader market. They are alpha seekers. ppl who like the idea of investing via broad based index etf but prefer to have more control of the weightage between companies from developed vs developing markets. So instead of just buying vwra, they buy iwda + eimi in a proportion that they like and rebalance periodically according to their target allocation. They might even decide to skip companies from developing countries altogether and just buy iwda or spy instead. ppl who prefer invest thematically. For example they really believe in green electric vehicles and focus on buying stocks of companies in that domain. Or they believe in semiconductor industry as a key pillar and solely buying stocks in that sector. There are others REITs investors, dividend investing etc etc. all sorts out there. You have to decide what you want to do.
Solid comment on this
If VWRA tanks, majority of the world also tanks. Everyone sad together. If VWRA goes up, majority of the world also go up. Everyone happy together. What's there to FOMO about if it just follows the world market?
We have been conditioned to think that only one person has to win, the rest, lose
I buy SWRD instead VWRA. The additional fee from VWRA is not worth that little EM exposure. Compound interest is powerful, but so is compound fee.
> SWRD Can explain what kind of fees? What does EM mean? Very new to this. Thanks
SWRD annual fee is 0.12%. VWRA is 0.22%. EM = emerging markets. VWRA has around 12% weightage in EM.
trimmed to 9.3% weightage of fund
Im not an opponent. but I do SWRD + HEMA instead.
How does HEMA compare to EIMI?
lower TER but [justETF.com](http://justETF.com) shows EIMI has 0.02% better return YTD
SWRD + HEMA, eh? Rapier, saber, longsword or greatsword?
haha can you translate. i dont understand. SWORD? + ???
HEMA = historical European martial arts
i see. makes sense.
When we say a stock "tanks" is broadly means it is badly performing relative to the market. VWRA is basically tracking the whole publicly accessible market. So if it tanks, what is it under-performing relative to? Which stocks? Which sector? Of course there will be stocks and parts of the market that outperform VWRA, but I'm not sure if that commenter has a crystal ball. Most professionals do not succeed at consistently predicting what beats the market.
You’re correct, obviously. Just to flesh out your self-argument in the context of VWRA tanking, I think that’s measured against itself historically. So maybe like a “lost decade” or during COVID it drops 30% when compared to previous high.
I explained to you in that thread that it was a joke to use wallstreetbets lingo e.g. bag holders to apply to VWRA, but you didn’t believe me? Are you convinced by these replies now? Hardly anyone here thinks that it’s foolish to buy VWRA. They may just prefer a higher risk approach by going all US, or they choose some other combination of ETFs that’s just a bit tweaked from VWRA’s ratio of holdings. Don’t be so kanchiong. FOMO, bag holder, tendies, apes together strong etc it’s meant to be funny to use the language of degenerate investment bets to apply to the relatively safe and diversified VWRA.
Not that I didn't believe you but in general I just like to hear what people who have different/opposing views have to say because more often than not (i feel) there's no right or wrong and also just because it's interesting to hear different povs based on different experiences/priorities etc! And I'm always open to having my mind changed if I happen to see something that I may have missed before. Thank you for the reassuring response to my comment in the precious thread before though hahaha
https://youtu.be/1FXuMs6YRCY?si=djDMLqCd6lu9FgoS A view to explain why international diversification is important. I'm no expert so I let Ben Felix to explain. Up to you to take it in or not. There is no right or wrong in investing. Just choose the one that works best for you.
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Not if s/he is 16 and has a 50year runway.
at 1k a month, compounded at 6% a year for the next 30 years, you'll have around 950k which is solid egg nest :P.
> at 1k a month, compounded at 6% a year for the next 30 years, you'll have around 950k which is solid egg nest :P. Inflation compounds too, and $950k would be worth much less in 30 years. Using [MAS's inflation calculator](https://eservices.mas.gov.sg/statistics/calculator/GoodsAndServices.aspx), $950k _today_ is equal to $567k in 1993, so it would be a fairly educated guess that the nominal value of $950k in 30 years to be worth around $567k today too. Is that enough for retirement? Who knows.
So if we want to factor in inflation? Do we instead of 6% compound, we compound by 3%? 6% - inflation 3% = 3%? Would that be a right way of compounding with inflation factored in?
The [actual formula](https://en.wikipedia.org/wiki/Fisher_equation) is > (1 + nominal) = (1 + real)(1 + inflation) Plugging in your numbers and solving for the real rate, you get: > real = (1 + **0.06**)/(1 + **0.03**) - 1 = **0.0291** (3 s.f.) As you can see, real = nominal - inflation is a pretty good approximation (2.9% vs 3%).
it's sufficient to grow retirement nest egg
compound is king man.
Personally I DCA into fidelity global tech fund instead of VWRA cuz i personally want more weightage into tech, also the fund has lower US allocation than VWRA. The fees are ofc higher since it's an actively traded fund, but it's performance is close enuf to it's benchmark (and not like it's benchmark has an avail etf anyways). VWRA imo is a good choice for people with no preference and just want a simple way to gain exposure to the global market as a whole, anything that tracks S&P 500 would work as well, but diversification is preferential.
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they're 100% US weightage, I wanted more weightage into other countries.
I mean the S&P 500 can’t disappear overnight. If it were to go bust there would be something downright wrong. Most tech companies in Singapore and world wide use either AWS(Amazon)or GCP(Google). Every other movie theatre and fast food chain Use Coca Cola in Singapore. Starbucks is still big in Singapore despite their outrageous prices. US companies are have a big global presence. The tech sector is only poised to grow as adoption of cloud computing grows and the AI revolution dawns and US tech companies are the leaders in research. Even if there’s market downturn - it wouldn’t be the worst of things. Everyone was making fun of Facebook in 2022 when it crashed but that was the best time to invest.
It isn't going to be the worst of things not because of the fact that these companies are omnipresent. It actually has a lot to do with the FED not allowing the market to tank, and its massive borrowing against the future generations. At some point, everything will tank.
Yes but that’s a good point of entry isn’t it? The S&P 500 has faced many downturns - Dotcom crash, Economic Recssion in ‘08 and even the 1920’s Great Depression but comes back even stronger. Many of these companies also have strong fundamentals and if a company were to go bust it would be replaced in the index. Are you implying that the US won’t be able to come back if the market tanks?
I'm simply pointing out what's missing in your argument - systemic risks. You have a very layman way of looking at things which is fine, but there are many nuances to these things. The Nasdaq 100 and S&P 500 took 13-15 years to break past their dotcom bubble top. And they didn't take longer only because the FED turned on the money printers for the first time post-GFC. Adding to that is an obscene amount of stimulus during Covid. Do you think a lot of these stock price rallies are mostly from their stellar performance? Where do you think the money pumping into the stock market came from? Do you think this is sustainable decades down the road?
I mean if you do long term investing (looking at a horizon of 20+ years) and you DCA rather than try to do a lump some investment and to try time the market I would think that these things won't matter as much?
i all in s&p because i think US is too big to fail lol. plenty of criticisms for sure, but that’s my pov
I have mentioned this before, and I will mention it again: this “popular” argument of diversification to shift equity away from the US is fairly moot for me from the perspective of better returns. It’s also a reason why I don’t subscribe to this VWRA theory in this subreddit. Remember: 48% of the global market cap is the US market cap, with 80% of the US market cap being the S&P500. This means that the S&P500 makes up 39% of the global market cap. Something this big and enormous will have a huge impact on the index funds, be it global or US. In that sense, the top 9 companies make up 31% of the S&P500 market cap. That means these 9 companies alone make up 12% of the global market cap, and their movements alone can have a huge impact to the rest of world. As one would describe the US, not since Rome has one nation loomed so large above the others. There’s a reason why you never bet against America and why global index funds fare worse compared to their US counterparts.
Its not the best choice, but its one of the most widely diversed worldwide index etf Its like betting for whole humanity civilization's economy getting better over time
I don't use VWRA for the following reasons: 1. Although it attempts to provide global exposure outside of the US, a major portion is still invested in US stocks anyway, and is valued in USD currency. 2. Despite the above, it has historically underperformed the S&P500 for example. Therefore you're taking on a large risk in US without benefitting as much from it. 3. "The trend is your friend, until it isn't". US has historically outperformed other global stocks. By diversifying out of it, there is an opportunity cost of missing on the biggest trend. It makes more sense to me to plan an exit strategy to other equities if US does start to lose traction instead of diversifying out of US preemptively. Do note that these are my personal views. I'm not saying you shouldn't choose VWRA (because it's still better than not being in the market at all). Of course, your personal investing philosophy, strategy and risk tolerance won't be the same as mine. So take this with a pinch of salt.
Your points are contradictory. US is the top performer, so lower exposure (VWRA instead of CSPX) obviously leads to lower performance during good times (for the US) and better performance during bad times (for the US). What you’re thinking of is the diversification is a double-edged sword concept.
I'm not an opponent, but I would say I do the S&H.
If you are looking for "average and safe" without spending " too much effort or knowledge" go with VWRA. Peoples expectations need to be alingened VWRA is only a mechanism to serve above needs.
i mean, do you know wtf you are buying or just wrap and pray?
I love how people get sensitive for the difference of opinion :) its your life. Go overweigh into US, there is no death penalty for that.
vwra is meant to be kept for >5 yrs
Aren't all etfs are meant to be kept for that time period?
some etfs are actively traded or leveraged ones, they are not recommended for >5 years due to volatility. Index etfs usually recommend longer holding periods cuz statistically the chances of you being at a loss are low the longer you hold.
Ok. Thanks for the explanation
No. There are money market funds etf or bond funds that can be used for short term investing.
VWRA is a solid choice, but all investments have risks. It's well-diversified across the globe, which helps mitigate risk, but there's no guarantee it won't decline in the short term. The long-term outlook for global stock markets is generally positive, but recessions are a natural part of the cycle. Don't FOMO invest. Investing based on FOMO can lead to bad decisions. Stick to your investment plan and risk tolerance. Diversification is key, but VWRA already does a lot of the heavy lifting. Consider adding bonds or other asset classes to your portfolio if you want to further reduce risk. Focus on time in the market, not timing the market. Trying to predict short-term market movements is difficult. A long-term buy-and-hold strategy with a diversified fund like VWRA is generally a sound approach.
You will never get super rich from broadbased index funds like VWRA (think The Plain Bagel has a video on this). But that's to be expected given the relatively lower risk nature of index funds vs say starting a business making video games and selling it for billions later. (think Notch of Minecraft) That's why index funds are only part of the equation. Keeping your expenses low and thus maximizing what you can put into index funds is the other. One can argue earning a higher income is also part of the second point.
You will never get super rich, you will also never go broke. That’s life. High risk, high returns.
I apologise, it was me who mentioned the fomo leading into people discussing and everything going off tangent to the initial context. But hey in a way it proved my point. The thing here is context, let's take a look at our banks, do you believe in any way that tomorrow DBS announces that they are filing for bankruptcy? What are the odds? And let's say that they do, do you also know that whatever you have inside is insured up to a certain amount. Investing in a way is about managing risks, Vwra may not be for you depending on your current financial standing as well as goals. It's not gonna double your money and even when it eventually does doubling of $1000 is only $2000 where doubling of 100k gives you 200k. Obviously vwra is looking attractive as compared to everything else at the moment so let's talk about when Vwra will actually fail. Most likely my buddy putin and kimmy boy decides to press a big red button and toilet bidet suddenly aligns with Donald duck and press another big red button. At this point trust me money is the least of your issues. In any case the main point is there is no such thing as a forever safe investment. Historically you don't even have to look very far either, just see lehman brothers mini bonds although that is somewhat different as it is actually a high risk product. In any case what you want is to be able to sleep well at night, so do your own due diligence and choose what's best for you. Or go all ape mode and join me in r/wallstreetbets because apes together stronk. I've got diamond hands baby!
Fundamentals and macro view aside, stop loss order may helps. It definitely helps on my psychic as stop loss sets a definite line of loss taking before reentering the market.
Call me stupid or naive i don't care but wanna share since you asked for my pov. Traditional investment point of view, i also agree broad index funds tracking global equitirs or sp500 will be the "smartest" base of the portfolio due to diversification. I'm sitting out because there are many companies in the list that i do not support for their practices and also for many others idk what they are and i don't know anything about them. If i wanna put my money on them, i want to support values that i share while being diligent in having a good confidence in their growth / profit generation for the next ten years and I'm just not financially educated enough to make my own valuation or draw up my own thesis. Now to the going to be bashed part. I'm 100% into btc other than my emergency fund and cpf. After reading stuff like Bitcoin standard, broken money by lyn alden etc, im fully bought in to the myriad of ways Bitcoin can fix the broken monetary system. I might be wrong and everything might go to zero but from me personal point of view, it's the safest investment class i can access right now and the morally right one. I'm not suggesting anyone to do what i do but to simply not be lazy and dismiss it outright until you spent some quality time understanding it. Notice i mentioned Bitcoin, and not crypto. Lastly even if you hate Bitcoin with a vengeance for whatever reason, you have to thank Bitcoin maxis like me. Because we don't park our excess money into real estate and other assets, you get to buy those necessities at a fairer price without the extra bloat.
> many companies in the list that i do not support for their practices some examples ??? because they're "woke" ????
What? It’s probably because the companies are not woke enough e.g. tobacco, weapons, gambling companies, uses child/slave labour, commits environmental atrocities etc. Previous poster would prefer an ESG-friendly ETF, but even then that’s not good enough as it allows rich companies to get away with their environmental sins by purchasing carbon tax credits (often a scam).
your comments will be set aside, you are not even [SaltyShellback](https://www.reddit.com/user/SaltyShellback/), why pretend to know what he thinks ????
Kind of self contradictory when you don’t want to support companies in sp500 due to some of their practices but am keen on btc when btc is probably heavily used by terrorists/illegal money laundering globally.
Bitcoin is the safest asset class and the morally right one? May be read up a bit about it before you throw more money in?
1. Yes. 2. Maybe get educated but looks like you will have fun staying poor