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.
Continue reading “Investing 6. Exchange Traded Fund (ETF) Arbitrage”
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 “Investing 5. 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 “Investing 4. – 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 “Investing – 3. Mutual Funds and Index Investing”
In the first post of the Investing series, I covered the basics of investing. This should have given you a few important rules you should follow before you invest. However, we didn’t cover into details how to invest. In this post, I’m going to cover the main financial instruments that you can use to invest: Cash, Bonds and Stocks.
We are going to see the advantages and disadvantages of each of these instruments. By the end of this post, you should have a better understanding of them. And you can always ask questions for more information 🙂
Continue reading “Investing – 2. Cash, Bonds and Stocks”
At the beginning of this month I started my new job. For the sake of anonymity, let’s say I’m working for Pied Piper. I hope there are some Silicon Valley fans in my readers 😉 Since I’m just starting working at this company, I don’t want to disclose it on this blog. And since I’m still anonymous, I’m going to try to stay like this.
This is going to be a shorter post than usual. In this post, I’ll describe all financial aspects of my new job. I’m really happy about my new job. Working at Pied Piper is an incredible opportunity.
Continue reading “My new job at Pied Piper – Opportunity and benefits”
This is the first post I’m going to write about Investing. I’m going to try to cover as much as possible on the different forms of investing. In this first post of the series, we are going to see what is investing in the broad sense.
I don’t yet know how many posts will be in this series. I will try to cover the basics, the stocks, the funds, Exchange Traded Funds (ETFs) and so on 🙂 Hopefully, it will be interesting for some of you and it will motivation some people to motivate.
I’m no financial advisor. I’m not nearly an expert investor. This post is just what I know about investing from my experience and from research.
Continue reading “Investing – 1. The Basics”
A lot of things happened in May 2018! The most important event of this month is of course that we got married! We had a nice and simple wedding with close family and friends.
And as you’ll see, I reached the 100K CHF milestone in my net worth!
Even considering the wedding expenses, this month has some good savings rate. This is mostly due to the extensive gifts we received. This month is the month with my largest income yet. We should have been able to turn it down. Let’s hope we can keep expenses to a low next month.
Continue reading “May 2018 – Wedding and 100K net worth milestone”
I just finished reading I Will Teach You To Be Rich, by Ramit Sethi. This book will give you a lot of advice on how to improve your finances. It may not make you a millionaire. But it’s a great book, full of helpful recommendations on how to improve your finances!
This book has been great to read. One of the best read from the personal finance books I’ve read so far. Like the last book I read, I’ve been able to buy it for a few dollars on Kindle. If you want to be lucky, look at my techniques to find cheap Kindle ebooks.
Continue reading “I Will Teach You To Be Rich – Book Review”
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.
Continue reading “How to buy an ETF (VT) on Degiro”