ETFs are strange and truly wondrous beasts. They are great for diversifying your portfolio into shares and other asset classes like bonds, fixed interest and property. However, you still have to approach them with care. They are not magic investment bullets. They still go up and down with overall markets. Some ETFs are heavily marketed around sexy themes that should be handled with care.
ETFs are...putting power back in the investor's hands
I invited Steve Bull from ETF Watch to share his knowledge about all things ETF and in response to questions from listener Sarah. Thanks for filling out the listener survey, Sarah. It's prompted this episode and a deep dive into ETFs with a certified, non-aligned, terribly nice guy who knows his stuff.
Here are Sarah's questions:
I really enjoyed the episode with Kanish Chugh going into further detail with ETFs. Following further research its hard to know what ETF to invest in as there are so many options, this really helped to clarify what areas to look at.
I'd enjoy further discussions on emerging markets and education around this, its been touched on in a couple of episodes.
1. Is there a right time to invest with ETFs specifically? I know with single stocks we look at the investing when the price decreases and stabilises before buying is this the same with an ETF?
2. I'm keen to get into the market now but there is a lot of "noise" around possible recession which would provide good opportunity to buy into the market. Is it better to just get in and start or wait until this occurs, is this speculation/noise that I should be ignoring?
A valuable lesson early in my career, just because there's a tax reason to do something doesn't mean it's the right thing to do.
Steve's early career commenced during the global financial crisis he saw first hand the dangers of putting yourself in a position where you are forced to sell when times are most grim.
Is there an ETF bubble?
Speaking of the GFC, Michael Burry has been in the news again apparently saying that there is an ETF bubble. Michael Burry correctly called and profited mightily from the 2009 downturn. Steve explains why ETFs are not in a bubble.
If you haven't seen it make sure you see The Big Short. The Michael Burry character was played by Christian Bale. It's a cracking tale. Here's a taster of the movie below.
Other episodes focussed on ETFs
What I was listening to while putting this episode together - Southern Gothic
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