investing in an index

Ideo

just wondering what peoples opinions here are as to investing in an tracker ftse 500, dow 500 etc... thinking about a small punt for the long term, ie greater than 10 years as i figure that the indexes as a whole will recover in the long run and i would be mitigating against the risk of major losses (likely) on a few individual company's shares. anybody any opinions on this?

woodseb

you're right, passive index investing is the best approach for a novice investor. they are proven to outperform active management and also provide a degree of diversification

Saabdub

They also have lower fees, which increases returns over the longer term. I've had a NASDAQ tracker for a number of years. I went into this market after the fallout from the dotcom crash settled. My modest gains have been wiped out though, thanks to the latest recession, but my capital is still intact and I'm still adding units at low prices so I should benefit from a recovery. One other point, when investing in dollar or stirling assets you have to keep your eye on the exchange rate, a 10% dollar or stirling devaluation will knock 10% off your fund value. So you have to time your sales carefully.

I've been thinking about a DOW tracker myself but haven't identified a fund available here in Ireland, anyone know of one?

Saabdub

JackieT

"NYSE : DIA" is an ETF that tracks the DJIA

daveirl

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Hanley

daveirl wrote: »

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Any idea of the anticipated return over the medium to long term? (say 3-5 years).

And if you can tell me that, can you also tell me how long this piece of string I'm holding is?? :D

Seriously tho, I'm giving consideration to lashing a few hundred quid a month into an ETF of some sort for the next year or two and just forgetting about it for 3 years.

Diarmuid

Hanley wrote: »

Seriously tho, I'm giving consideration to lashing a few hundred quid a month into an ETF of some sort for the next year or two and just forgetting about it for 3 years.

for 3 years equities are risky. You need to be looking at 5 -10 years

daveirl

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A Random Walk

For the past few months I've been regularly putting money into VT which is a Vanguard global ETF. Relatively low fees, relative geographic diversification and autopilot investing. I think a good diversified global index tracker is an important "core" holding and I sleep at night knowing I'm not gambling with individual shares.

Hanley

daveirl wrote: »

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Interesting... I hadn't really differentiated between yearly average returns and CAGR. Seems pretty obvious now tho. I know you got what I meant... 10% increase each year on the funds as at the start of that particular year (year 1 + 10% = start of year 2, year 2 + 10% = start ofyear 3, year 3 +10% etc etc)

And I was hoping that since things are fairly depressed at the moment, it's a good opportunity to get in. Knowing when to get out, and remembering the lessons we've learned the past year or two is probably wise too!!

It's difficult to see that being too bad an idea.

A Random Walk wrote: »

For the past few months I've been regularly putting money into VT which is a Vanguard global ETF. Relatively low fees, relative geographic diversification and autopilot investing. I think a good diversified global index tracker is an important "core" holding and I sleep at night knowing I'm not gambling with individual shares.

Thanks guys. I'll look some more into it. Is it worth being involved in a few EFT's, or is one sufficient?

Saabdub

I invest in my NASDAQ tracker through an Irish intermediary (and I feel a lot less gloomy as it's recovered a bit in the last week). I'm wondering if any other Irish institutions offer any tracker funds. I've been googling but haven't found anything.


Saabdub

daveirl

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Saabdub

So who in the Irish market is offering diversified ETFs?

Saabdub