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Invest in a whole market fund to benefit from the (post-covid) recovery?

  • 20-03-2020 10:55pm
    #1
    Registered Users Posts: 2,649 ✭✭✭ cooperguy


    I was thinking of investing some money in an all world ETF to benefit from the recovery, when it comes.

    Something like: Vanguard FTSE All-World UCITS ETF (USD) Accumulating (IE00BK5BQT80)

    What do people think of this as a strategy (and my choice of ETF). There may be deemed disposal issues if I ended up keeping the ETF for 8+ years but that wouldnt be my intention


Comments

  • Registered Users Posts: 96 ✭✭ 2016


    That's probably in the top 20% of the strategies you could possibly pick


  • Moderators, Business & Finance Moderators Posts: 7,836 Mod ✭✭✭✭ Jim2007


    cooperguy wrote: »
    I was thinking of investing some money in an all world ETF to benefit from the recovery, when it comes.

    Something like: Vanguard FTSE All-World UCITS ETF (USD) Accumulating (IE00BK5BQT80)

    What do people think of this as a strategy (and my choice of ETF). There may be deemed disposal issues if I ended up keeping the ETF for 8+ years but that wouldnt be my intention

    Probably smarter than 80% of the nonsense going on at the moment. Once bought, then don’t look at, listen to the talking heads or the noise on here for at least five years!


  • Registered Users Posts: 687 ✭✭✭ riddles


    How do you purchase this?


  • Registered Users Posts: 104 ✭✭ HamSarris


    It’s in the psyche of investors that the stock market always goes up over the long-term. And this is correct if you look at charts from the 1980s onwards and never look at non-US charts.

    Have a look at the Dow Jones from 1929 to 1953, or 1965 to 1982 where the market stayed in a range and could not make another high. Especially have a look at the Nikkei, it’s currently trading at 18,000, it was 40,000 in 1989.

    I do see a recovery from the Coronavirus, but there could be another crash in the coming years and the central banks will have used up all their ammo. The highs of 2020 may never be reached for decades, and if they are, the gains may be lower than the rate of inflation. Even at current levels the stock market is still overpriced.

    It’s a worrying trend that a lot of new retail money is coming in expecting to make money from this crash. When naïve investors have a certain strategy it’s probable that the smart money/institutional investors have another. You don’t want to be on the side of the dumb money.

    So I don’t think putting your money in an passive ETF is a great idea. Instead of having blind faith in the stock market, you need to identify stocks of value – growing earnings, low debts levels, global expansion potential, chart showing strength in the current crisis etc. You also have to consider basic wealth preservation against the future inflation that is coming - Gold at 1,300 or below is a solid investment, silver at 10 or below is dirt cheap and below the cost of mining.


  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    HamSarris wrote: »
    It’s in the psyche of investors that the stock market always goes up over the long-term. And this is correct if you look at charts from the 1980s onwards and never look at non-US charts.

    Have a look at the Dow Jones from 1929 to 1953, or 1965 to 1982 where the market stayed in a range and could not make another high. Especially have a look at the Nikkei, it’s currently trading at 18,000, it was 40,000 in 1989.

    I do see a recovery from the Coronavirus, but there could be another crash in the coming years and the central banks will have used up all their ammo. The highs of 2020 may never be reached for decades, and if they are, the gains may be lower than the rate of inflation. Even at current levels the stock market is still overpriced.

    It’s a worrying trend that a lot of new retail money is coming in expecting to make money from this crash. When naïve investors have a certain strategy it’s probable that the smart money/institutional investors have another. You don’t want to be on the side of the dumb money.

    So I don’t think putting your money in an passive ETF is a great idea. Instead of having blind faith in the stock market, you need to identify stocks of value – growing earnings, low debts levels, global expansion potential, chart showing strength in the current crisis etc. You also have to consider basic wealth preservation against the future inflation that is coming - Gold at 1,300 or below is a solid investment, silver at 10 or below is dirt cheap and below the cost of mining.

    Amazon ticks every box in terms of what is likely to be the new normal, it's trading at 80 times however and that is sky high in a recession

    As for the nikkei being far below 1989 levels, the Japanese had the biggest asset bubble in history in the 1980, s, made the dotcom bubble look like a bear market

    It's an anomaly in the extreme

    European stocks have gone nowhere outside the DAX since 2000 even prior to this , only the U. S has had a booming equity market since 2009


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  • Registered Users Posts: 3,054 ✭✭✭ Static M.e.


    cooperguy wrote: »
    I was thinking of investing some money in an all world ETF to benefit from the recovery, when it comes.

    Something like: Vanguard FTSE All-World UCITS ETF (USD) Accumulating (IE00BK5BQT80)

    What do people think of this as a strategy (and my choice of ETF). There may be deemed disposal issues if I ended up keeping the ETF for 8+ years but that wouldnt be my intention

    Hi Coooperguy, while I am far from an expert, this is essentially what I am doing except I am using the Euro version on the Amsterdam stock exchange.

    Vanguard FTSE All-World UCITS ETF USD Accumulation (EUR) | VWCE

    My understanding is that as the fund is Accumulating, rather than Distributing, then there is not any deemed disposal issues.

    @HamSarris - while I don't disagree with you per say picking the right companies and getting to know them well enough to be able to make buy \ sell decisions at the right time is difficult. Buying a passive EFT just investing overtime seems like the next best option for those who don't have the skill or time to do stock picks.

    @Riddles - If you set yourself up on Degiro, I'll send you a link if needed, then you can just purchase them directly. It takes about 4-5 days from start to finish to get setup as they seem to be very busy at the moment. The platform itself has everything needed and is simple enough to use too.


  • Registered Users Posts: 4 M A R K


    HamSarris wrote: »
    It’s in the psyche of investors that the stock market always goes up over the long-term. And this is correct if you look at charts from the 1980s onwards and never look at non-US charts.

    Have a look at the Dow Jones from 1929 to 1953, or 1965 to 1982 where the market stayed in a range and could not make another high. Especially have a look at the Nikkei, it’s currently trading at 18,000, it was 40,000 in 1989.

    I do see a recovery from the Coronavirus, but there could be another crash in the coming years and the central banks will have used up all their ammo. The highs of 2020 may never be reached for decades, and if they are, the gains may be lower than the rate of inflation. Even at current levels the stock market is still overpriced.

    It’s a worrying trend that a lot of new retail money is coming in expecting to make money from this crash. When naïve investors have a certain strategy it’s probable that the smart money/institutional investors have another. You don’t want to be on the side of the dumb money.

    So I don’t think putting your money in an passive ETF is a great idea. Instead of having blind faith in the stock market, you need to identify stocks of value – growing earnings, low debts levels, global expansion potential, chart showing strength in the current crisis etc. You also have to consider basic wealth preservation against the future inflation that is coming - Gold at 1,300 or below is a solid investment, silver at 10 or below is dirt cheap and below the cost of mining.

    Sounds like very solid logic here. The next question, assuming a lot of the really smart money goes into well researched solid stocks. What instruments is the second tier smart money going into? I.e where are the cute Irish hoors on degiro putting their money for the next 5-10 years in your opinion?


  • Registered Users Posts: 2,649 ✭✭✭ cooperguy



    My understanding is that as the fund is Accumulating, rather than Distributing, then there is not any deemed disposal issues.

    Im pretty certain that's not the case. You will have to do deemed disposal at 8 years. In fact accumulating ETFs are one of the reasons this was brought in, you dont pay any tax on company dividends until the deemed disposal date comes along


  • Registered Users Posts: 804 ✭✭✭ SameOleJay


    Am I right saying the downside here is greater tax and reporting burden to single stock buys (exit tax vs capital gains)? Otherwise looks a no brainer.


  • Registered Users Posts: 809 ✭✭✭ iknorr


    Where to buy good and silver ( or how) ?
    I'm currently using degiro...


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  • Registered Users Posts: 799 ✭✭✭ langer91


    cooperguy wrote: »
    I was thinking of investing some money in an all world ETF to benefit from the recovery, when it comes.

    Something like: Vanguard FTSE All-World UCITS ETF (USD) Accumulating (IE00BK5BQT80)

    What do people think of this as a strategy (and my choice of ETF). There may be deemed disposal issues if I ended up keeping the ETF for 8+ years but that wouldnt be my intention

    I also found this ETF from research done online! Will be probably set up monthly buys on this, along with buying stocks. Keeping the powder dry at the moment though


  • Moderators, Business & Finance Moderators Posts: 7,836 Mod ✭✭✭✭ Jim2007


    cooperguy wrote: »
    I was thinking of investing some money in an all world ETF to benefit from the recovery, when it comes.

    Something like: Vanguard FTSE All-World UCITS ETF (USD) Accumulating (IE00BK5BQT80)

    What do people think of this as a strategy (and my choice of ETF). There may be deemed disposal issues if I ended up keeping the ETF for 8+ years but that wouldnt be my intention

    FTSE bit could be a problem as their indexes are not so hot.... there is a reason why we never FT<Anythihng> in benchmark construction unless specifically requested by a client. Better look for an MSCI one.


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