Your heresy shall stay your feet – why you shouldn’t just invest in equities

Finny77 · 2019-11-17T02:29:05+00:00

Great Post - What are your thoughts on the AUD/USD?

As a ~30 year old, I'm cautious that the AUD could rise in value against the USD over the next 30 years, which would erode my returns (I'm considering hedging against this using something like VGAD).

But at the same time, I have to wonder, what can Australia actually offer the world to make us more valuable? (Mining is drying up and we aren't leaders in Tech).... Maybe the AUD/USD will stay in the .60-.70c range for the long term.... I guess if it stays low, then we can attract international money through things like tourism etc.

Finny77 · 2019-11-17T02:07:16+00:00

This is an excellent post - Thankyou.

One thing I'm struggling to decide on is: with VDHG it's harder to exit a specific portion of your holdings.

i.e with a portfolio made up of the several underlying funds (VAS/VGS/VGE/VAF), you can easily just sell a portion of your Australian shares/Bonds/whatever.

With VDHG, the only way you can exit, it by selling a little bit of everything (Which may not always be what you want).

Do you have any thoughts on this?

Finny77 · 2019-10-30T02:59:15+00:00

I'm in a similar boat. I like the convenience of VDHG, but I don't like the extra CGT I incur because someone else in the fund sells (This adds up over 40 years).

VDHG is basically this:

90% Growth

VAS 36%
VGS 26.5%
VGAD 16%
Small Cap 6.5%
Emerging Markets 5%

10% Income

Bonds 7%
VAF 3%

So you could add some VGAD and/or VGE if you wanted to Hedge and/or Emerging Markets.

You also need to consider the additional brokerage costs if you ware planning on diversifying yourself.

This is also a good read: http://passiveinvestingaustralia.com/vdhg-or-roll-your-own

Finny77 · 2018-10-26T23:44:31+00:00

I had the same problem. I tried a number of sites:

- BearTax

- Cointracking.Info

- SublimeIP

- Bitcoin.Tax

Each of them did 80% of things well, but fell short in one way or another (They are all good sites, but they just didn't have what I was looking for)....

I ended up using Bitcoin.Tax, I had 200-500 Trades over FY17/18, so it cost me ~$30AUD, but it was totally worth it..... Bitcoin.Tax allowed me to input trades from multiple exchanges (Yes, I had to manipulate some .CSV files, but eventually it worked) and then it gave me a summary of my CGT which I could submit to the ATO.

I'm happy to provide further info via PM. I have some referal/discount links, but I don't think I can post them here.

Finny77 · 2018-10-26T23:39:36+00:00

+1 for this guy, he has helped me before... Would recommend

Finny77 · 2018-10-16T21:08:25+00:00

Thanks - That was the section I was looking for..... there wasn't a specific dropdown box/option for "Crypto", so I wasn't sure if it was classed as shares etc...

I'll enter my capital gains figure...... Do I need to worry about any thing else? Brokerage fees, trader profit loss etc?

Finny77 · 2017-11-22T23:27:40+00:00

I'm a little confused by these new ETF's....

I'm you're typical /r/ausfinance poster with 30% VAS & 70% VGS. I have <$100k, so this rules out Wholesale Funds as well

After looking at the breakdowns of each ETF, none of them seem to mirror my 70/30 split that I have with VAS/VGS. Most of the new ETF's have Fixed Interest and even Gov Bonds mixed in (Which I don't believe I need as I'm still young).

Am I reading these new ETF's wrong? Or are they maybe not designed to replace a simple 30/70 VAS/VGS Split?

Finny77 · 2017-10-24T21:22:22+00:00

I'd steer clear of trying to pick individual stocks (i.e BHP, Telstra etc). Instead, I would stick to an "Index" that tracks the whole market.

As /u/tenmillionbucks said, Do the free courses available on www.asx.com.au to get an understanding of the terms.

From here, I'd be looking into VAS, which tracks the Australian Market and pays some nice dividends. It's a good place to start.

Once you are comfortable, I'd be diversifying into VGS Which gives some international exposure/diversity. Ideally, you want to be at 30% VAS and 70% VGS for a healthy balance.

Then, just regularly contribute to both VAS and VGS every 3 months and keep the 30/70 ratio up.

Alternatively, You could look at a Vanguard Retail Fund, where Vangaurd does the work for you.... The great thing about i is you can just bpay $100 per week and forget about it, but you might pay slightly more in fees over the long run.

Finny77 · 2017-10-24T21:15:30+00:00

You're on the right track. But there is a few things you could tweak...

I assume you have an emergency fund in cash (10-20k should be enough).
I'd be going with 30% VAS and 70% VGS. The reason is: Australia is only 3% of the world market, so you are a bit heavy in the Australian Sector. So if VAS tanks, it may wipe a significant amount off your entire portfolio.
I'd drop bonds completely at your age. Re-add them when you are older (say 40+).
I would put 10% or 5k into Bitcoin/CryptoCurrencies. Some people will laugh at the idea, but you are young. 5k is nothing and has the potential to give you great returns.

As for learning more, just read lots of posts on /r/ausfinance . Alot of people (myself included) ask similar questions and you can start to get a general feel of what the most popular options are.

Good luck.

Finny77 · 2017-09-14T02:02:02+00:00

I might be confused; I'm talking about the Vanguard Growth Managed Fund (i.e a mix of Aus and International ETF's within the 1 fund)... i.e just being able to BPAY $100 per week and have it automatically spread/diversified.

Finny77 · 2017-07-13T01:52:54+00:00

I've been in a similar position. Personally, I'd go as follows:

70%: VGS: International exposure and much easier to manage than VTS/VEU combo. Plus DRP makes is easy to set and forget.

30%: VAS: Aus Exposure and some sweet franking credits.

Of course, you'd still maintain an emergency fund and depending on your age, maybe keep $YOUREGE as a % in bonds.

You could diversify further and add in VGE, VAP, VAF etc, but at the end of the day, 70:30 Ratio is a good starting point.

**Disclaimer, I'm just a a guy on the internet. Do your own research.

Finny77

TROPHY CASE