You may not know it, but there are many ways to invest in real estate. Each of these ways have advantages and disadvantages. If you want to invest in real estate, it’s important to know about these ways before doing a choice and investing in one of them. Or investing in several of them.
For now, I’m not really invested in the real estate market. I just have a small position though my World ETF that has some real estate funds. But I may invest more in the future. For now, I need more stocks, but once I’ve got enough, I may shift a bit of my portfolio into real estate.
Let’s now see the different ways to invest in real estate. There are quite diverse. Each person wanting to invest in real estate should find a way that is adapted.
Continue reading “5 Ways to invest in real estate”
In our Investing series, there is something we didn’t yet cover in details: dividends. A lot of companies in the stock market are paying dividends to their stock holders. That means that if you own a share of Coca-Cola, you’ll receive some cash four times a year, every quarter.
This is a nice way of accumulating cash since it does not require you to do anything. It’s fully passive income. You still need to buy the shares of course. But once it’s done, you’ll get the money. There are many important things to know about these dividends and we are going to cover them in this post. If like me you are investing the entire market, you’ll get some dividends automatically :)
Continue reading “Dividends – Nice passive income”
We have talked about many things now in the Investing series. We have covered index funds in details. Finally, we have covered several portfolios such as the Three-Fund portfolio and its variants and a few other lazy portfolios. But there is something we haven’t covered yet. It’s Target Retirement Funds.
Many people are investing for retirement. They may know for instance that they want to retire in 20 years. Given that and their age, it’s likely that their allocation to bonds will increase over the years until retirement. Most people will do that by changing their allocation every few years. Either by rebalancing or by injection of new capital. But there is another way. Target Retirement Funds will automatically change their bond allocation overtime.
In this post, I’m going to cover Target Retirement Funds. We are going to see what is good with them and what is not.
Continue reading “Target Retirement Funds – Too much simplicity ?”
In the previous post of the Investing series, we discovered the Three-Fund Portfolio and its variants. It is a simple portfolio made of only three funds. It’s really simple to manage yet very effective and diversified. We also saw the two-fund and one-fund portfolio. They are even more simple and yet have many advantages. But there are more lazy portfolios that are available.
People have proposed many more portfolios over the years. In this new post, I’m going to cover more of these portfolios. They are called lazy portfolios because they are all using index funds. And you can kee the allocation of the different funds for many years. Instead of choosing stocks, which is difficult, you choose stock funds or bond funds. You can either use mutual funds or Exchange Traded Funds (ETFs) depending on what you prefer and what you have access to.
Continue reading “More lazy portfolios”
In the previous posts of the Investing series, we have covered the basics of the stocks and bonds. We also have covered index funds, in the form of mutual funds and Exchange Traded Funds (ETFs). You should now have a good idea of how you want to invest. The problem remains on how to invest!
This is a very important question and one that you should spend some time thinking about. There is no one-size-fits-all investment in my opinion. There are many kinds of investment that work. For some of them, you’ll need some knowledge and time to make it work. The three-fund portfolio is a very simple portfolio made of three funds that should work for most people.
In this post, we are going to cover two things. How much bonds you should have and what is the Three-Fund Portfolio. Since there are also some direct variations of the three-fund portfolio, I’m also going to cover them!
Continue reading “The three-fund portfolio – Keep it simple”
In part 4 of the Investing series, we have covered Exchange Traded Funds (ETF). In this post, I’ve mentioned that ETF used arbitrage to follow closely the price of the index. If the price of the stocks in the index go up, the price of the ETF should follow. And if the price of the stocks go down, the price of the ETF should follow as well. But if the price of the ETF goes up because of stock market trading, something should correct the price quickly. This is where arbitrage plays a big role.
In this post, we are going to see how Exchange Traded Funds are created. And also what is arbitrage ? How it makes sure the price of ETF stay in sync with the price of the index. It’s a bit of a complicated subject. But I think it’s important to know exactly how financial instrument are working before investing in them.
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In the previous post of the Investing series, we talked about Exchange Traded Funds (ETFs). Before that, we talked about mutual funds. In both these two cases, we focused especially on passive index funds. Index funds are replicating an existing index. For instance, the SP&500 index is replicated by many mutual funds and many ETFs. In this post, we are going to focus on index replication.
There are several different ways of replicating an index. There is physical index replication and synthetic index replication. It’s important to know how funds are replicating the index. If you want to make a good choice between the different ETFs and mutual funds that exist, it is important to know the different ways they are using for replicating the index.
Continue reading “Index Replication in details – ETFs and Mutual Funds”
In the previous post of the Investing series, we talked about mutual funds. They are a great tool for investment. And especially passive funds with very low fees, thanks to index investing.
This is all great, but the problem with mutual funds is their availability. If you are lucky, you have access to Vanguard. And you can directly invest in their low fees mutual funds. There are other like Vanguard, but they are the most famous ;) If you are not lucky, for instance, if you live in Switzerland, you don’t have any easy access to good mutual funds. I can bet that your bank does not offer cheap passive funds. At least mine doesn’t! Here comes Exchange Traded Funds!
Continue reading “Exchange Traded Funds – ETFs”
In the previous post of the series, we covered stocks and bonds. They are important financial investing instruments. They both have their advantages. Bonds are more stable but will return less. Stocks are more volatile but should return more. In a balanced portfolio, you need both. But picking stocks and bonds is a lot of work. And it’s a difficult one. It requires a lot of knowledge and time.
So why not let other people pick bonds and stocks for you ?
Investment funds are doing exactly that for you. In this post we are going to cover them!
Continue reading “Mutual Funds and Index Investing”
In this post, we are going to see how to buy an Exchange Traded Fund (ETF) on DEGIRO. Vanguard Total World (VT) is the main part of my new portfolio. So I’m going to use VT as an example. The process is exactly the same with any ETF you buy.
I decided to use DEGIRO after comparing with several other brokers. The main advantage of DEGIRO is its very low fees. You can read my full review of DEGIRO if you want more information. This post assumes you already have an account with DEGIRO. If not, you can open one account very quickly.
Note: Links to DEGIRO are affiliate links. If you use them to create an account, you will receive 20 CHF and I will receive 20 CHF.
Continue reading “How to buy an ETF (VT) on Degiro”