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Discussion in 'Investing Strategies' started by Cherrybomb, 16th Oct, 2019.

  1. Cherrybomb

    Cherrybomb Member

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    Im very new to investing but after doing some reading Ive opened an account with self wealth and thinking about building a portfolio based on vanguard australia balanced ETF.
    I know this probably sounds like a very newby question but can someone please give me a rough approximation of what my portfolio might be worth in 10 years if I invest 100k and reinvest everything plus add an extra $15k a year?
    If I build my own portfolio how do I continue to keep it balanced? Is there some kind of automation than can keep the percentages balanced? Or am i better off using a robo invester if im unsure?
     
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  2. twisted strategies

    twisted strategies Well-Known Member

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    predict your future returns , not me

    in the last 9 years ( of my investing ) there have been many unpredicted turns ( some good , some very good , and some not good at all )

    but here is a question right back , does your portfolio need to be re-balanced at all

    i prefer putting NEW cash into an area i can see good mid-term growth ( but NOT sell down without an extra good reason .

    since many wise heads say reducing your costs is a big help in growing your portfolio , , i decided to start by reducing unnecessary selling ( but sometimes there is a compelling reason to sell-down , and that is different )

    the global economy is deep in uncharted territory , buying bonds when returns are historically low ( but the risk ISN'T ) belies the 'safe haven ' logic shares are high risk , but if you select the correct ones the risk is acceptable for the returns ( not so easy selecting the good ones though )

    which is why some fund managers have called the market 'TINA '( There Is No Alternative ) yes you can make money on bonds by trading them and betting on Foreign Exchange ( FX ) wins , but you are new ( ish ) and that can take a lot of skill ( entire investment houses have been broken by playing both theses )

    but don't give up hope ,you are asking the right questions that us a BIG start

    cheers
     
  3. twisted strategies

    twisted strategies Well-Known Member

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  4. Hodor

    Hodor Well-Known Member

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    Do you mean this ETF product "Vanguard Diversified Balanced Index Fund" (VDBA)?

    The Vanguard Diversified products (Conservative, Balanced, Growth and High Growth) are all self balancing. Vanguard will keep the asset allocation within the ranges stated on the fact sheet by buying and selling as required. These products are designed for someone that wants to make as few decisions as possible, you pick your risk profile from the four options and invest cash as you can/want, the products are widely diversified so you don't need other investments.

    Returns could be anything, generally speaking you can expect the long term returns to be similar to the names. High growth should offer greater returns, the trade off is greater volatility and years where you will see the value drop by a greater amount than the balanced and conservative products. You need to think of your risk profile, why you are investing, psychology, time frame among other things.

    If you stay the course for the decade with regular investments you ensure you receive the lion share of what was available over that period of time.

    I believe you could do a lot worse than these products, however you are unlikely to do much better.
     
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  5. Cherrybomb

    Cherrybomb Member

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    I should stop coming to this forum. Every time I end up feeling completely discouraged. People just seem to be so negative it makes me feel like its just not even worth risking investing at all.
     
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  6. Hodor

    Hodor Well-Known Member

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    That's unfortunate, my post certainly wasn't meant to be read that way. Your selection of VDBA (if I am correct there) is an excellent choice IMO, it is self balancing and doesn't require any further thought.

    VDBA would be an excellent long term investment IMO, it is about 50% invested in income (think fixed interest/bonds) - offering stability and 50% growth (think domestic and global equities) - offering higher returns. So in theory it should offer greater stability without sacrificing long term returns too greatly.

    My own portfolio is most similar to VDHG (the high growth diversified portfolio) I have a long time frame and am happy to accept there will be times when the market crashes and my portfolio declines somewhat. Long term I believe the upwards trend will continue and those that stick with it will be rewarded.

    If I could only invest in one product it would be either VDGA, VDGR or VDHG, probably the later.

    IMO the real risk is not investing.

    No one knows what the future will hold so asking people to do so with returns gets replies that can come off negative perhaps. I would expect all 3 products to outperform cash over a decade or longer.
     
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  7. twisted strategies

    twisted strategies Well-Known Member

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    Cherrybomb,

    don't feel discouraged feel provoked to think carefully ,

    that 'doom and gloom ' is a tremendous opportunity waiting , if you have some cash to invest

    i stumbled into investing in 2011 , with a fair amount of cash ( but virtually no experience , just a willingness to learn ), ( 2007 would have been better but i had very little cash then , and no time to learn )

    i am trying to inspire you to research and think for yourself , there WILL be a downturn sometime in the future , facing it with a plan and some education will almost be as good as winning the lottery ( if you play it right )

    sure invest a bit now ( but keep some cash reserves ) get the feel of things , get used to jargon , learn the ebbs and flows of economic cycles ( there will be ups AND downs )

    but mostly understand what is good for your situation so you know when you are getting good advice ( and not just another sales pitch )

    i would prefer to see you have long successful investing adventure rather than a short memorable one
     
  8. Cherrybomb

    Cherrybomb Member

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    Hi thanks for your help. No wasn’t referring to that product but it’s something I will consider. I have been reading the following website and he recommends building your own portfolio to avoid fees.
    Vanguard Australia ETF Portfolios | ETF Bloke

    Is the VDBA you recommend a managed fund? Do I purchase through my broker? I joined SelfWealth so wondering if I use them to buy into this ETF?
     
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  9. Hodor

    Hodor Well-Known Member

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    OK great now I understand where you are coming from.
    Building your own is a slightly cheaper and possibly more flexible way to go about things.
    VDBA is an ETF which is a form of managed fund, you can buy it through SelfWealth, it actually holds the assets listed on the link you provided (it is what the balance portfolio is based on) and you pay a small premium for the service of rebalancing etc. You also lose control of the asset allocation so if Vanguard change it you are at their mercy.

    IMO an efficient way to re-balance is with future purchases through income and dividends to maintain the asset allocation you are targeting. That is if you go down the individual product/create your own path.

    Here's a link to the products mentioned on the link from Vanguard;
    Investment Products

    Shares are often referred to by their identifier/ticker so Vanguard Diversified Balanced Index Fund is "VDBA", Vanguard Australian Shares is "VAS" and Westpac Bank is "WBC" for example. It can be confusing at first.

    From the products you all looking at you are approaching investing in a way proven to offer solid returns with minimal risk. These type of products won't go to zero except in a scenario where cans of beans become the new currency of choice.
     
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  10. twisted strategies

    twisted strategies Well-Known Member

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    +1

    that is the path i have chosen ( so far )

    i don't hate Vanguard ( or any other ETF provider ) it is just i use them in a different way

    i use ETFs as an insurance , i pick what i think are gems in a sector , buy them but ( often ) buy an ETF to cover the entire sector , in case i selected the correct sector but wrong individual stocks in it ( if the sector AND my selected stocks do well , the result is just better but at slightly reduced risk )
     
  11. RS Gumby

    RS Gumby Well-Known Member

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    I've recently availed myself to mainly Vanguard ETFs and am very happy with them
    Take the punt and listen to the guys on this forum also keep asking questions
    We're all here to help
    If it suits dip your toe in the water and then later make a splash if you wish!
     
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  12. twisted strategies

    twisted strategies Well-Known Member

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    i knew from day one ( when i decided to invest in my retirement and NOT a very fast car ) , i needed to increase my asset base by 2020 , so i would have to be aggressive but careful ( there wouldn't be many paychecks coming in 2020 unless they were div. checks .

    so ETFs alone were never going to do enough , fast enough for me ... say 20 years out from retirement + the joy of compounding and the equation is very different ( assuming you don't got totally wiped out in a crash during this period )
     
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