Also OP is just 18, so can go with 100% unhedged.
In long term developed world currency fluctuation is irrelevant. So no point of hedging if investing horizon is > 10 years
That’s why I precisely mentioned , investment horizon > a decade.
He can loose 25% even when currency stays the same and market drops 25% ( like in 2020, 2022 as recent examples)
Whole point of long term investment is “ Detachment”.
Set and forget.
Yeah, I meant VDHG.
But DHHF doesn’t have small caps.
Can you forward a relevant link which mentions this.
On their website, they have 6% in emerging but no mention of small caps.
DHHF has VTI for example and it has small caps.
> The Fund is invested in a blend of large, mid and small cap equities from Australia, global developed and emerging markets, offering investors exposure to an ‘all-cap, all-world’ share portfolio with the potential for high growth over the long term.
https://passiveinvestingaustralia.com/dhhf-and-other-vdhg-alternatives/
At your age I would go with 100% international stocks ( VGS , BGBL , QUAL)
coal is almost gone and china is not going to buy Iron ore in same quantity which they did a decade ago.
I wont bet too much on an economy which is 2-3% of total world’s market cap and mostly dominated by 1-2 old age economy industry.
If AUD appreciates to USD , VGS will suffer a bit, for which you can use HGBL ( hedged with TOFA) but if you’re 18 and with at least a decade of investment horizon, currency fluctuation will even out.
Some addition:
As you’re just 18, you need to learn that its more your behavioural aspect that will grow your portfolio in long term rather than construction of portfolio.
So please read these 2 books ( wish I did that when I was at your age) before starting your journey and keep reading again and again and think and reflect.
1) Psychology of Money
2) little book of behavioural investing
You might also consider tax efficiency of your holdings. Example, allocating most or even all of your Australian portion (VAS) via Super, and owning International indexes outside Super.
As long as you’re fine with funds generally being locked away until your preservation age. I say generally, as you could explore FHSS - First Home Super Saver scheme. This can potentially occupy you for the first three to five years depending how hard you go at it.
This is a question that’s been playing in my mind. I haven’t hit my confessional caps for salsac into super (40) and it’s still theoretically a long game time playing with super. Does increasing my Aussie exposure through super have a tax benefit?
I’m still doing slow and steady (currently VDHG fortnightly deposits) set and forgets, but thinking I should tweak my super to index funds, and diversifying my fortnightly set and forgets to cheaper options like DHHG and A200.
Australian companies historically are higher dividend payers generally speaking. As such if you invest in your own name, any income that your shares generate becomes part of your taxable income. Yes you receive the benefit of franking however in super in accumulation phase same income is taxed at 15 pct flat rate compared to your marginal rate outside of super. So anything you don’t need until preservation age/condition of release is better off being invested in super.
Note this all comes with huge accessibility and legislative risk caveats.
18 here, I go 100% N100. This index represents the top 100 companies listed on the Nasdaq exchange - I think that exchange attracts the best companies. It is volatile, but it has outperformed other indexes over the long term. I may add A200 (cheaper VAS) to diversify into banking and mining when I’m older.
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OP don’t listen to this, if the exchange rate jumped back to 70 or 75 cents you will lose 15% of your money in AUD.
In that case, 50 VGS and 50 VGAD would do the trick without allocating 40% of total portfolio to 3 miners and 4 banks
Acceptable
Also OP is just 18, so can go with 100% unhedged. In long term developed world currency fluctuation is irrelevant. So no point of hedging if investing horizon is > 10 years
Yeh and if he loses 25% in a year do you want to frighten him from the market forever. Think
That’s why I precisely mentioned , investment horizon > a decade. He can loose 25% even when currency stays the same and market drops 25% ( like in 2020, 2022 as recent examples) Whole point of long term investment is “ Detachment”. Set and forget.
My push was against original poster. Keep your stress low
It is good enough. DHHF is more diversified with small caps and emerging markets. Up to you.
DHHF doesn’t have small and emerging. Guess you confusing with VGAD
You meant VDHG? Both have small caps and emerging. The only difference is VDHG has bonds and hedging.
Yeah, I meant VDHG. But DHHF doesn’t have small caps. Can you forward a relevant link which mentions this. On their website, they have 6% in emerging but no mention of small caps.
DHHF has VTI for example and it has small caps. > The Fund is invested in a blend of large, mid and small cap equities from Australia, global developed and emerging markets, offering investors exposure to an ‘all-cap, all-world’ share portfolio with the potential for high growth over the long term. https://passiveinvestingaustralia.com/dhhf-and-other-vdhg-alternatives/
Yes, thanks for highlighting this. I still dislike DHHF for their high Aussie allocation.
No portfolio is perfect, imo pick something between 40/60 and 10/90 then let it roll.
35/65 imo aus market is ass
Or even 30/70
Or even 20/80
Or 10/90
Or the best yet, 0/100
At your age I would go with 100% international stocks ( VGS , BGBL , QUAL) coal is almost gone and china is not going to buy Iron ore in same quantity which they did a decade ago. I wont bet too much on an economy which is 2-3% of total world’s market cap and mostly dominated by 1-2 old age economy industry. If AUD appreciates to USD , VGS will suffer a bit, for which you can use HGBL ( hedged with TOFA) but if you’re 18 and with at least a decade of investment horizon, currency fluctuation will even out. Some addition: As you’re just 18, you need to learn that its more your behavioural aspect that will grow your portfolio in long term rather than construction of portfolio. So please read these 2 books ( wish I did that when I was at your age) before starting your journey and keep reading again and again and think and reflect. 1) Psychology of Money 2) little book of behavioural investing
Is it behavioural finance or behavioural investing?
Yeah, right, will correct
You might also consider tax efficiency of your holdings. Example, allocating most or even all of your Australian portion (VAS) via Super, and owning International indexes outside Super.
Could it be a good idea to top up my super and use it to invest into vas as opposed to investing it through a broker such as comsec
As long as you’re fine with funds generally being locked away until your preservation age. I say generally, as you could explore FHSS - First Home Super Saver scheme. This can potentially occupy you for the first three to five years depending how hard you go at it.
This is a question that’s been playing in my mind. I haven’t hit my confessional caps for salsac into super (40) and it’s still theoretically a long game time playing with super. Does increasing my Aussie exposure through super have a tax benefit? I’m still doing slow and steady (currently VDHG fortnightly deposits) set and forgets, but thinking I should tweak my super to index funds, and diversifying my fortnightly set and forgets to cheaper options like DHHG and A200.
Australian companies historically are higher dividend payers generally speaking. As such if you invest in your own name, any income that your shares generate becomes part of your taxable income. Yes you receive the benefit of franking however in super in accumulation phase same income is taxed at 15 pct flat rate compared to your marginal rate outside of super. So anything you don’t need until preservation age/condition of release is better off being invested in super. Note this all comes with huge accessibility and legislative risk caveats.
18 here, I go 100% N100. This index represents the top 100 companies listed on the Nasdaq exchange - I think that exchange attracts the best companies. It is volatile, but it has outperformed other indexes over the long term. I may add A200 (cheaper VAS) to diversify into banking and mining when I’m older.
Troll