/biz/ - Business & Finance

>>12266766
Let me jump right to the conclusion of everything you're going to read: VTSAX. It's the largest mutual fund in the world ($726.4 billion net assets). You're basically buying the whole market. Here's the info: https://investor.vanguard.com/mutual-funds/profile/VTSAX

If you're totally new to investing here's a good start: https://jlcollinsnh.com/stock-series/

>>12266766
Do you plan on buying in every month?

Are you US-based or using a Euro version of Vanguard?

Anyway - buy US stocks, ignore Euro. Buy some Japan.

>>12266902
This plus munibond fund and your golden

>>12266902
Thanks, I'll read it now
>>12266964
I was planning on maxing out an ISA with a £20,000 lump sum, I'm in the UK, does that mean I'm offered different funds? The life strategy ones seemed to be heavily based on the S&P 500

Just read everything on Vanguard.com. Since it all depends on your risk tolerance and target, you'll have to decide on your own. There is no clear-cut answer.
Mixed portfolios out-perform pure stocks, because the act of rebalancing sells stocks when they're high and buys them when they're low.

>>12266766
You fucking retard. You're approaching investment like you're thinking about buying a telly, or a car. It doesn't work that way.

Before anyone can work out if accumulation or income funds are better for you, how about you tell us why it is you're investing for in the first place, and how long are you planning to leave your money in the markets?

>'hey guys ive saved up enough to buy a car, is a blue Audi or a green Fiat better, also my gay retarded uncle says red BMWs are the best. not sure if it matters but I don't have a licence and traveling above walking speed triggers my PTSD. anyway, can I afford a train'
>OP is never seen again
Every time

>>12267219
I earn a decent amount and have ~£20k in an account literally rotting, I don't want to buy anything really, I don't trust myself to properly manage the money, buying and selling at the right times so I just want to deposit it somewhere where it would do more than literally nothing desu.
A passive investment using Vanguard seems sensible but I don't know much about finance. I don't expect I'll need to pull the money out ever really, the only thing I can consider is to buy a house (happily renting atm) but I'm not sold on that as an investment because I move around a lot and in any case, I don't expect I'll have that sort of money for several years at-least.
>>12267293
lad, you gave me less than seven minutes to respond...

>>12267364
I'm mostly grouching because it sounds like you're trying to sprint before figuring out how to walk. Which is fine, I didn't know you didn't know. My bad.

Anyway: sounds to me like you just want to keep it safe, rather than having a concrete goal for your money. I this case I'd honestly suggest spreading the figure between bank savings accounts, in your situation. That way there's literally zero risk (barring something daft like complete economic collapse lol) to your money.

Investing money is risk vs reward, over time. Doesn't matter if your pension craters when you're 20 as you've got 40 years to make it back, for example.

If you're dead set on investing, though, Vanguard's funds provide a 'risk profile', rated 1 to 5, 1 being least risky and 5 being more risky. Take a look as their performance to get a gist of what to expect from them.

'accumulation' funds take any profit and use it to buy more of the fund, like using winning scratch cards to buy more scratch cards. 'income' funds keep any profit aside instead, so if you spent £5 on lottery tickets you'd keep buying £5 worth of tickets each week and put any returns into the bank.

Also: Lifestrategy funds take their basic funds (that track the top FTSE companies, for example) and wrap them up in a package with other funds.

So a basic fund would be, for example, investing in the top 100 FTSE companies. Vanguard would use your (eg.) £1000 buy and sell shares in companies that make up the top 100 firms on the Financial Times Stock Exchange in London, buying and selling as different firms enter and leave that top 100 list.

A Lifestrategy fund would take that £1000 and buy £300 of the FTSE 100 list, £200 of the US S&P 500, some of the big European exchanges, a little of Japan's index, and probably a little of the emerging markets as well. So you'd get a more 'complete' investment for the same cash.

The difference is, in the first option you're at the whims of the UK stock market, and all its highs and lows. In the second, the impact of the UK stock market's performance wouldn't affect your whole investment as you've got the others in the mix. Catch my drift?

>>12267506
That's a confusing analogy imho lad, why compare an index fund to scratch cards and lottery tickets, my understanding is with income you are paid your allotment of dividends but retain the value of the shares/fund whereas with accumulation that money is just reinvested into your fund right?
Accumulation funds have better growth but don't give cash injections right?
I guess I'm confused because if you purchase a scratch card or a lottery ticket the value doesn't really fluctuate but rather it becomes in an instant worthless or a lump sum greater than the price at purchase.

Also beware of the CGT depending on where the fund is housed/located. You can have an s&p fund housed in Ireland and pay much higher gains on that than one housed in the USA.

That's how it is for Ireland anyway - 33% vs 42% so check that out too

>>12267934
It'll be wrapped in an ISA, no CGT but ty anon

>>12267901
>my understanding is with income you are paid your allotment of dividends but retain the value of the shares/fund whereas with accumulation that money is just reinvested into your fund right?
You are correct. I used an analogy to explain the difference between how each option works. It's not perfect, but analogies rarely are.

Another analogy would be like being at the roulette table, and having £1000 to play with: one option would take any winnings and put them back on the table, and the other would keep £1000 on the table and pocket any winnings.

>>12268008
You're not really punished for withdrawing from an accumulation fund though are you? So given that I could withdraw if I, for whatever reason, suddenly had to - why would you not opt for accumulation over income?
Do some people prefer periodic cash injections and a worse performing fund?
The only other possibility I can consider is accumulation isn't very efficient which seems unlikely.

Moreover, in a bull market the value of your fund could/would/should grow even if you opted for income right?

>>12266902
Pretty much this. There's only so much you should expect from Vanguard and VTSAX is pretty much the cream of the crop.

>>12268103
>You're not really punished for withdrawing from an accumulation fund though are you
Who knows? Check the 'costs & minimums' tab on the fund page. If there's an exit cost it'll be listed.

>Moreover, in a bull market
Stop. That's not compatible with your earlier 'I don't expect I'll need to pull the money out ever really' statement. If you'll never pull the money out, why should you care whether number go up or number go down?

This is why I was asking what you want to use the money for, and how long you intend to invest for. Otherwise you're just timing the market, which is a valid choice but it's gambling; and there are people who do this as their job, and they will do it better than you could.

>>12268180
I'm just confirming what the differences are between accumulation and income - forget the bull market thing then, if the shares in the fund had a growth rate of 0% it would make more sense to have money (I didn't immediately need) there than in an account with no interest rates.
>0% growth and income means passive income is generated
>0% growth and accumulation means the value of the my fund increases as dividends are reinvested right?

>>12266964
but aren't japanese stocks extremely volatile? the nikkei 225 hasn't still returned to 1990 levels

>>12267031
Wait until after Brexit in March to pick up cheapies. Stay in cash for the time being.

Set up a broker account, Interactive Brokers or AJ Bell/Hargreaves Lansdown.
DYOR, you have a few months to properly geek out on stock market fundamentals and business cycles. Interest rates and QE.
Read The Intelligent Investor and Joel Greenblatt's book The Little Book that Still Beats the Market,

>>12268551
Will I really pick up cheapies? what if Brexit damages sterling? and why not buy straight from vanguards?

>>12266766
This is the best fund for your risk appetite: VEXAX. Small and mid cap historically have outperformed large cap. If you’re actually based then go 100% UPRO.

>>12266902
>VTSAX

How can I invest in this if I am a non-US resident?

Vanguard was cool a year ago, real niggas buy fidelity FZROX now with 0 expense ratio.

>>12268706
Traders will dump on Brexit announcement like they did after the referendum. Dumping to scare the shit out of normies and to re buy at a discount.
I don't know what will happen to the sterling, but a weak pound is a good thing for exports. Although, having diminished buying power sucks I guess.
You can buy from Vanguard still if you want, Online brokers will have vanguard funds listed on their platforms also.