All in Index Funds
You may have noticed that Sharesies now offer you access to the American share market. So now we are faced with yet another choice for our investment dollar. And don’t get me wrong, the choice is great but it can add a layer of confusion too for first-time investors. So, while Sharesies and others like them have filled a gaping hole in the market - providing easy and affordable access to the share market - they have created another void and that is the education of investors.
As part of the Sorted Money Week, I recently asked you to send me your money-related questions, which of course you did. I’ve selected a bunch of them and given my thoughts on each, plus added in a few links and resources to round out the answers for you.
I’ve had a number of emails asking about the changes to Smartshares, in particular the introduction of their new S&P/NZX 50 ETF (NZG) and how it compares to their existing NZ Top 50 ETF (FNZ). A deep dive into Smartshares for this post was a timely reminder for me just how intertwined and complex the investing marketplace is and that it’s really set up for the investor that already knows how to invest. Finding information was tough, so I reached out directly to Smartshares as I figure it’s best to go straight to the source right?
Under the “Our Story” section on the Kernel website, they say the following: We encourage open and free sharing of opinions so that everyone feels as though they can collaborate and contribute.” Not the usual spiel you would find on a fund manager website, don’t you agree?
There has been a sudden interest in the share market and it has me worried. I am noticing that there is a cohort of investors frantically rushing to invest in shares to “make the most” of this current crisis. I, on the other hand, have resisted all instincts to DO SOMETHING, to rush around and find those one or two companies that are at what I believe to be rock bottom prices so I can buy low and sell high. Instead, I have calmly followed the advice of John C. Bogle when he said: “Don’t look for the needle - buy the haystack”. That’s what I’m doing, I’m just buying the entire market.
Do you think that now might be a good time to start investing for the first time? I think so. It’s as good a time as any and if you are new to investing, I want this to be the first blog post you read, because it’s going to save you a whole heap of heartache in the long run. And that is a promise.
I asked you last week what I could help you with and I received a lot of emails with questions on various topics. I have pulled a couple of themes out of them and have shared them in this post, because my guess is that they are pretty common questions right now.
I thought I’d keep a diary for this week, so you can see what we are doing to prepare for the months ahead in this rapidly evolving situation. Take from it what you will and discard the rest. But first and foremost when it comes to money at a time like this, whether your job is secure or you have just lost it, the absolute key thing to keep in mind is to: Always spend less than you earn
If there was ever any doubt about what an emergency might look like, well this is it, folks! I hope that each and every one of you is coping well and today I wanted to let you know what Jonny and I are doing, in the hope that you might gain a few pointers about what to do with whatever situation you may find yourselves in.
