Відео

Hi Peter, in short, a passive index fund is passive. It doesn't do any fancy rebalancing or magic formulas. For example, if a company like Nvidia gets more valuable, so does the assets inside that fund as it owns Nvidia stock as part of the S&P 500 or the world. What exact dates and times they do their trades etc. I have no idea but Vanguard literally created the index fund and you can see the tracking difference as it's public information :) I think you've answered your own question for the rest of it...if you want to pay higher fees to invest in a fund that claims to be able to have magic powers you are welcome to :) Nobody knows the future and the vast majority of actively managed funds DO NOT beat their benchmark in the long run. I prefer to keep my costs low and control what I can. Good luck and thank you for the support :)

Hi Toby, Thank you so much for your fast response. It was very helpful. I’ll do a bit more research into dimensional because I want to try understanding why so many people invest into it. Looking forward to your upcoming videos. Best wishes, Peter

@@peterlux5959 AFAIK a lot of Dimensional funds are factor based - meaning that they are filtering and selecting companies based on certain 'factors' - in the long run could this deliver better results? Maybe, who knows. It's an interesting concept, but you will have to pay for it. Even if something worked in the past, it does not mean it works in the future :)

I’m not sure you watched the whole video 😎. Yes they sell globally…but guess what so do many other companies who are not listed in the US….the UK market is a good example the largest companies on the FTSE 100 make most of their money internationally too

No right or wrong answer here, there are pros and cons for both! Hard to say no to the additional tax relief of the pension though :)

Over the long run only around 3-6% of all companies have managed to produce the majority of all of the returns in the market: it’s extremely difficult to predict…I’d say impossible. I have covered it in many previous videos 😎

@@TobyNewbatt I will said that on the first 10 company is to little for the long run, I’m sure that on the first 10 company a few of them didn’t exist 10 years ago, but a SP50 or SP100 I think can deliver a better result. I think that all the others are there for contingency, but if i would play to beat the SP500 I will just take the first 50.

Indeed, you'll get the bonus the terms are based on when you initiated the transfer, not when it completes :)

Yes thanks I’ll need to do a future video on this one!

This is how I invest, I use index funds and chill?

They have a whole document explaining fee collection - if you don't have cash in your account they will contact you to make payment. Worst case scenario they would sell some of your investments to pay your fees.

I did this too. In 2021, I received a lump sum. Put it all into savings when the best thing to do was to drip feed into the markets. Oh well, you live and learn.

Investing this way allows greater control. So Toby can dial up/down certain markets when he wants to. It also tends to work out cheaper than say VWRL. I replicated VWRL, avoiding the 0.22% fee, paying 0.13% instead.

As per below, yes it's pretty much a global portfolio - however it is cheaper this way + I can tinker a bit and adjust if I like. But if I really want to make it simpler yes I could stick to one fund :)

Hi Ruby, great question - and I have talked about dividends quite a lot on my channel :). They are totally not a necessary thing for retirement, if I need money from my investments I will be selling what I need. In short, this is a bit of a trap that is repeated to investors that you somehow need dividends to get income. What ends up happening is people focus on only buying companies that pay a dividend. This is like buying a car because it has red paint. See my videos on my channel about dividends :)

I'm just sharing what I've read and watched about retirement, but the common wisdom is to draw down on your investments rather than live off dividends. Once you retire, hopefully, you still have decades for your investments to grow. As you get close to retirement, consider moving investments into bonds or having savings to weather a crash, perhaps two years' worth of living expenses.

Your Personal Savings Allowance is separate from any ISA allowance you may have. The amount of allowance depends on the type of taxpayer you are: basic rate taxpayers (20%) can earn £1,000 in tax-free interest each year. higher rate taxpayers (40%) can earn £500 in tax-free interest each

@@boyasaka no, I meant I made £600 from the business money I invested. It’s not my personal money

Probably best to talk to an accountant, if you’re worried. I’ve used online only accountants for about £170. It’s a lot when you compare it to the £600 you made but at least you know you’ll be tax compliant and you’ll have that knowledge in future.

Waiting for this too

As soon as it's available I'll let you know :)

£20k is the TOTAL in one tax year for ALL the ISA types combined. Do not go over £20k in total. For example. Lifetime ISA £4k Cash ISA £5k S&S ISA 11k Thats then your whole limit used up for this financial year - and then you have to wait for the next one.

Yes I probably will quite soon, I want to cover the topic of how to invest money for business :)

A wonderful explanation :)

Thanks mate. Fast forward 20 years time and we’ll see how it looks 😂

Yes correct there will always be small parts missing which probably work out to be around 5-6% of the total global market ☺️.

@@TobyNewbatt There are ETFs that cover the global market, including developed and emerging markets and a mix of large, medium and small cap companies

@@kakyoinnoriaki7725 I know :) And they cost more to invest in. Will they perform better in the future? Who knows. I'm perfectly happy with the portfolio as it is right now.

No worries at all! So fees are weighted not totalled I hope that makes sense. In your example let’s say you did invest £500 into each of these 5 ETFs (that’s not what I have done but let’s play along for the example) The fees are based on the percentage of those £500 investments NOT totalled. So my current average cost is 0.09% compared to a Vanguard global fund of 0.22% I hope that makes sense. Maybe in my next update I’ll explain it a bit better 😎

When you say downside protection what do you mean? I invest every month, I'm building my wealth, I don't need any income, i'm diversified with a global selection of stocks. I have no debt, an emergency fund, low living costs. What more do I need :P

I guess they're talking about bonds. However, if you're investing over decades, PensionCraft has shown that bonds can be a drag on performance. In the event of a crash, recovery tends to be quick, usually within a couple of years.

Thanks and welcome

In fact, markets have incorrectly priced in such a pivot six times over the last two years, according to Deutsche Bank, which sounded cautious about this seventh time. Still showing us why pointers from market experts are essential.

Possibly! It's always in the back of my mind how much I want to tinker....maybe a discussion point for future videos! I think there can always be a point of diminishing returns though :) - when they are really low maybe something like tracking error could have more of an impact! :)

Welcome aboard and good luck!

No problem 👍

What kinda single stocks you in Obviously UK stocks Switch to USA stocks Or etf or both

I think the concept of being able to own property via an ETF is cool inside a REIT - However, just like any other investment a REIT has the same risk as any other company, there's no guarantee that it beats the market on a total returns basis in the long run so I'll just run with what I have. FYI - if you are an index fund investor - you will own lots of REITS already inside of those index funds :)

@@TobyNewbatt thanks, I just keep thinking about focusing on income streams as I feel that's the best way to keep some sort of freedom. More income streams the more flexibility and options you have should any problem arise

@@originallifeclothing4038 Totally get where you are coming from. My personal view is that if you want income (at least later on in life) you can just sell down the shares you own. I know some people think this idea is weird and that's why they love dividends - but dividends are not free. If you only buy stocks/ REITS that pay a dividend this has an effect on total returns and you could end up losing money versus just being the whole stock market :)

@@TobyNewbatt yep I agree. It's just difficult to figure out what's best. For me I'm thinking focus on enjoying now while my kids are young as this is when I'd need the income to take them out and also the other income streams would mean I sont have to work 60hours a week in a dead end job 🤣. That's my thoughts I wonder if anyone else feels the same 🤔

I really like that approach - in hindsight VNRG makes more sense to my thought process as you get Canada and the rest of the US stocks outside of the S&P 500.

@@TobyNewbatt Thanks Toby. What was your thought process on investing in Japan only vs all of Asia Pacific? My plan was to build my own version of *VWRP* . I'd originally planned to invest in something like *VWRP* but given you're locked into the % of each region (around 65% on the US), I wanted to build my own so that I could balance the spread how I liked, and for the time being I wanted to tilt away from the US. So I have around 55% US and 45% international. Looking at *VWRP* as an example of exposure, it covers all of Asia Pacific rather than only Japan, so was curious what your thinking was behind your choice? Upon research I spotted that some global index trackers don't include EM whilst some do, though most I've looked at do include all of Asia Pacific (not just JP). Thanks Toby!

Hi Toby, great video! How often would you consider reballanceing? Maybe a video on reballanceing?? 👍

@@pmason6076 Japan is the 2nd largest stock market in the world, it's the main pacific player - so my only thoughts are that it's enough of a diversity play for me. Similar to S&P 500 for the US market. It's not perfect by any means but nothing ever will be :) Yes, some global trackers are not truly global which is misleading - they often just follow developed markets! Devil is always in the detail! :)

@@BruceKemp-ew5if did a video on this on one of my portfolio updates :) once or twice a year will be fine, and it's as simple as one click with IE :)

Thanks Jay - yes in answer to your question my portfolio looks like this partly because I enjoy playing around with the different ETFs to see how cheap I could make my overall costs! I could do perfectly fine sticking with something like the invesco all world ETF which is probably the best global fund you can get in terms of pricing. I like your thought process, now we just have to stick with it for a very long time!

@@TobyNewbatt absolutely agree. It's funny because I try to help people engaged and excited about investing but at the same time the simpler and more boring the better! Shame invest engine doesn't have a LISA... Are there no buying/selling fees?

Fees - althougth VG is not pricey, they add up over the very long term so I thought why not take advantage while I can. I also use Trading 212 for the same reason. Virtually no fees and super easy to use. Also, Vanguard dont allow fractional ETF buying :)

@@TobyNewbatt Thanks a lot 😎

You are very welcome to buy whatever you want inside an ISA - as long as the platform itself supports buying individual shares. Just be careful though...there's no guarantee with any single company with Tesla that you are going to make any profit in 10 years :) That's an extremely risky bet just FYI.

@@TobyNewbatt Thx Toby

Congratulations first off thats amazing. On the second part - the amount of accounts and how its split is not relevant. Assuming you are talking about compounding your wealth from here on out. The math doesn't change, it just gets easier the more you have presuming you can stick with this for the very long term. £100k or $100k is just an arbitrary number, but it's a really nice mental barrier and money compounds faster the more you have. Now comes the hard part...waiting! :)

I think that statement is a bit misleading The first 100 is most important And there is virtually nothing in it if you had say 95k So you could say the first 95 or first 110k Or first 90k 100k is just a figure plunked out of the sky The more you have the more you get from compounded interest My work pension last Sunday was 127100 Today it’s 128500 A gain of 1400 pound in a week

@@boyasaka Yes I suppose it is a figure that you can work around but it is a target I suppose. You are getting nice returns on your pension

This is an idea that many people have had in the past - but it doesn't work I'm afraid there is no free money to be had :). The dividend paying ETF/ Stock will drop in value to reflect the dividend being paid. This is done by the market itself to reflect that loss of a dividend from the stock. However, of course a stock can still do whatever it likes, its all supply and demand - BUT there is no free dividend to be had by doing a strategy like that :)

Why not just ask IE 🤦🏽‍♂️🤦🏽‍♂️🤦🏽‍♂️🤦🏽‍♂️🕴👍

@@lawrencer25 because that’s exploiting their aim here so why would they want anyone to do that, best to ask elsewhere 🤦

Ha funny question - check the terms I'm sure they've thought of that HOWEVER - it does say you can start a savings plan in a new portfolio so thats very easy to do and perfectly fine :)

Who do you invest via please?

​@@MindfulJai Via what ?

USA will Always blast fcuk out of the ftse 100 Compare s and p performance or Nasdaq 100 over last few years to the ftse 100

@@fredatlas4396 what platform do you invest via please? Trading212 doesn't allow this investment just view only

I prefer to live life on the edge :P. Only issue with any hedged investments is that you are betting on currency exchange getting worse (protecting downisde but no upside) - what if it moves in your favour?

@@TobyNewbatt You're a braver man than I, Toby! Betting on the eventual appreciation of the yen has made many FX widows over the years. XD There's also the issue of the unhedged version tracking the performance of a Japanese index in USD terms. Have a look in the KIID. This may not necessarily reflect your core philosophy of taking the returns as they are in native currency and only worrying about the relative performance to GBP over the long term. In fact, this is a common sleight of hand in most large index funds, but since 60% of stock market performance comes from the US globally and somewhere around 80% from developed markets close enough to the US in terms of performance and central banking policy, punters rarely notice the implied currency risks they carry; assuming they hold the world or the equivalent weights in separate ETFs.

By not investing in Europe or EM, your portfolio is saying they will never outperform US and UK. In last 15 years that has mainly proven correct (in terms of the US). But then again, if you’re investing no more than 10% in EM then you’re not missing out on too much. India has done really well lately, but as a % of your portfolio, you probably wouldn’t have noticed it.

@@AlexisMoore-nx6wfcheers for your help so would you say that last 15% in EM

I should add that it’s healthy to diversify your portfolio. I’m assuming you’re invested in 600 companies. A global index fund contains about 4000.

@@AlexisMoore-nx6wfyes 600 company’s 500 from S&P 500 and ftse 100 so would you suggest go for an index fund that has lots of company’s included in it

This is not advice, but my portfolio tries to replicate VWRP (0.22% fee). I have VHVG and VFEG which works out as 0.13% in fees. How much EM exposure is down to you. VWRP contains 5% Asia, 5% EM and 5% Rest of the world. Personally I have 10% EM in my portfolio. A few percentage here or there won’t make much difference, so I wouldn’t over think it.