How did good and bad Index Funds perform over the same period IV?
I had a quick look at VANGUARD but also saw this post on the net about the problems the individual see's with Index Funds
The problem with index funds link
Living on equity
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How did good and bad Index Funds perform over the same period IV?
I had a quick look at VANGUARD but also saw this post on the net about the problems the individual see's with Index Funds
The problem with index funds link
Index funds will work relatively well, except during times of extreme market turmoil. During these times the 'big' players can get kicked out of the index quickly which can cause large disparities. Think centro, BnB during the GFC.
For most times the stocks being replaced are at the smaller end of the market, so their 'weighting' in the index is relatively small. Hence their comming and going doesnt have much effect on the index as a whole.
But what is the alternative?????
You put your money in an active fund manager, well most active managers lag the index over time. Even worse, when it comes to tax time, because active managers churn portfolios more frequently, the tax effect to the end user can be higher as well (this is not disclosed in relative performance figures).
The point about stocks rising in price is very valid, but again whats the alternative?
I am a strong advocate of index funds for those people who dont have time to spend analysing individual companies.
And its not that hard to 'intelligently' invest in index funds.
When you see a market going bang busters for several years, then its definately not the time to top up investments, its propably better to take some money off the table.
When the market is boring, nobody really wants to talk about it, thats the best time to make frequent allocations to the index fund (so long as you have a long term view).
A final point, i would be careful listening to the guys from Intelligent Investor.
Yes they are value investors, but they tend to be attracted to dogs that are cheap, rather than quality companies.
I would add another point, a very important point which i can't emphasise enough:
The holy grail of an investment product that works under all conditions does not exist. Those financial products that imply this tend to perform much worse than their plain vanilla counterparts.
The holy grail of an investment product that works under all conditions does not exist. Those financial products that imply this tend to perform much worse than their plain vanilla counterparts.
I used equity to fund moving to Barcelona for a year of fun and sun. Great investment. Huge ROE. Met the love of my life. We're getting married in a few weeks 
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I used equity to fund moving to Barcelona for a year of fun and sun. Great investment. Huge ROE. Met the love of my life. We're getting married in a few weeks
Well, congrats eh.
But it's a sad day in Australia for all the single blokes.
See ya's.
I used equity to fund moving to Barcelona for a year of fun and sun. Great investment. Huge ROE. Met the love of my life. We're getting married in a few weeks
I'm not sure how I missed this. Congratulations!!!
Are you staying in Barcelona?
If the market was steady and went up like normal in 1-1.5 years I will top up my loans and retire for 2-3 years. eventually I will run out of money so get a job for 6 months to meet lending criteria(if thats still min requirement) and do it all over again. I think after a few of those cycles I could just LOR
not 100% if this could work but the numbers sound good in my head
not 100% if this could work but the numbers sound good in my head
I prefer LOR to LOE.
LOE assumes continued CG which could be a very dangerous assumption. LOR assumes continued rental demand is is less dangerous.
Take the Japanese housing market as an example. LOE there is a no goer.
LOE assumes continued CG which could be a very dangerous assumption. LOR assumes continued rental demand is is less dangerous.
Take the Japanese housing market as an example. LOE there is a no goer.
Looks like I missed your post too! Nope, we're coming home to Oz, at least for a few years until things get better in Spain. Richard's family still have some land we can build on here in Spain once things look a bit brighter, so we're viewing the next 3-4 years in Australia as a working holiday for slightly older travellers
