Covid-19 led us to panic-buy at the supermarket and to panic-sell on the sharemarket. As uncertainty around this global pandemic continues, Australia’s economy will remain turbulent.
Watching and acting on daily sharemarket price movements can soon become your worst enemy in uncertain times. What we do know is that expert advice always tells us to stay the course when it comes to investing, unless your financial situation and life circumstances absolutely warrant selling up.
Jonathan Shead, head of investments, Australia, at State Street Global Advisors, says one of the biggest mistakes you can make as a long-term investor is to fall into the trap of trading individual stocks and exchange traded funds (ETFs) daily (that is, trying to time the market).
“ETFs (like all shares) do allow you to trade in the moment. ETFs provide liquidity and are priced right throughout the trading day. That can lead to the temptation for investors to lose sight of their long-term investment goal,” he says. “We would encourage investors to focus on the long-term goals when trading ETFs and not to chew up their returns in transaction costs with trying to time the market.”
He says too often investors fail to account for the total cost of owning an ETF. They’re labelled as low-cost investment products, but not low cost if you’re constantly trading them. There’s the cost of trading an ETF as a security, as well as the expense ratio of managing the fund.
By their nature ETFs are an investment tool designed for the long term. They’re transparent, easy to use and generally low cost and give you broad market exposure. Existing in Australia for more than 25 years, ETFs have weathered volatile times before, says Shead.
Bulls and bears
Diese Geschichte stammt aus der May 2020-Ausgabe von Money Magazine Australia.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der May 2020-Ausgabe von Money Magazine Australia.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.