I have come to a cross-road. In my allocation of International Equities Index, my initial plan was to mix Vanguard All-World ETF(VWRD) and iShares World ETF (IWDA), but I realise it was a bad idea.
Main difference between the two ETF:
VWRD
- Pay out dividends quarterly
- Includes Emerging Market
- Slightly higher TER (Total Expense Ratio)
IWDA
- Reinvest dividends
- Only include developed world market
- If want to include emerging market, can buy EMIM (iShares Core Emerging Market)
Not that I hate dividend, but to be taxed on dividend (as the ETF is Irish-domiciled) seems like marginal loss. Accumulating dividend and later reinvest yourself also requires transactional cost. Anyway it might be better when you live off your dividend when you retired, instead of trying to sell some capital on your own.
To own international index, we usually wish to be as diversified as possible, in this case, VWRD seems like a more straightforward option as it includes EM. But how much does this affect your portfolio performance? I am not technically sure. But if you go for IWDA + EMIM, you definitely need to make your own allocation.
At the moment, I have a little of VWRD, more of IWDA, and a little of EMIM. It sounds exactly all over the place like 'rojak'. I still can't make up my mind. Obviously, both hv their pros and cons and I feel that their differences are negligible. It is down to personal choice now.
Maybe I will leave what I have already own, and pump in VWRD?
Showing posts with label Vanguard. Show all posts
Showing posts with label Vanguard. Show all posts
Friday, November 13, 2015
Wednesday, August 19, 2015
Monthly Investment
The following is a piece I got from an investment book calls "The Bogleheads' Guide to Investing".
John C. Bogle, founder and retired CEO of The Vanguard Group, received a letter from a Vanguard shareholder. The person wrote that he had been investing with Vanguard since the mid 1970s. Since then, the value of his portfolio has grown about $1,250,000. And the most fascinating part is, this shareholder never earned more than $25,000 a year in his life time!
Moral of the story is to be start investing early, so that you can make use of the magic of compounding. Set aside your monthly paycheck for fixed expenses, insurances, bills, donations and savings, before setting aside a fixed amount of the remaining to spend.
Reason why I suggest fixed amount to spend is that as your salary increases as years goes by, your misc expenses may unknowingly increase, even though you have already set aside the fixed expenditures.
Since 5 years ago, when I started out in the workforce a couple of years, my misc expenses such as dining & entertainment has always been allocated the same amount. Of course there are times when I overshot! Besides having more bills to pay after having my own house, I channel the additional salary (after these years) to my savings.
Once my emergency cash has been built, the time for investing comes!
My first step out was in POSB Invest-Saver, starting really small as I build up my emergency cash. Monthly dollar-cost averaging into investing Nikko AM STI ETF.
This is an exchange-traded fund that tracks the Straits Times Index (STI). By purchasing this, you technically own the top 30 blue chip companies ranked by market capitalisation on the Singapore Exchange.
Have been on it a year now, it is affordable and hassle-free as it deducts from your bank account on every 12th of the month. You do not have to time the market, you do not have to wait for your order to be filled.
I will share more on this next post.
John C. Bogle, founder and retired CEO of The Vanguard Group, received a letter from a Vanguard shareholder. The person wrote that he had been investing with Vanguard since the mid 1970s. Since then, the value of his portfolio has grown about $1,250,000. And the most fascinating part is, this shareholder never earned more than $25,000 a year in his life time!
Moral of the story is to be start investing early, so that you can make use of the magic of compounding. Set aside your monthly paycheck for fixed expenses, insurances, bills, donations and savings, before setting aside a fixed amount of the remaining to spend.
Reason why I suggest fixed amount to spend is that as your salary increases as years goes by, your misc expenses may unknowingly increase, even though you have already set aside the fixed expenditures.
Since 5 years ago, when I started out in the workforce a couple of years, my misc expenses such as dining & entertainment has always been allocated the same amount. Of course there are times when I overshot! Besides having more bills to pay after having my own house, I channel the additional salary (after these years) to my savings.
Once my emergency cash has been built, the time for investing comes!
My first step out was in POSB Invest-Saver, starting really small as I build up my emergency cash. Monthly dollar-cost averaging into investing Nikko AM STI ETF.
This is an exchange-traded fund that tracks the Straits Times Index (STI). By purchasing this, you technically own the top 30 blue chip companies ranked by market capitalisation on the Singapore Exchange.
Have been on it a year now, it is affordable and hassle-free as it deducts from your bank account on every 12th of the month. You do not have to time the market, you do not have to wait for your order to be filled.
I will share more on this next post.
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