Hi, thanks for the response. Donāt think your two suggestions are what Iām after though sorry.
The one Iām after tracks the S&P Total Market Index, and encompasses around 4000 US stocks from large to micro firms.
From the Vanguard US Equity Index info page:
"Objective
The Fund is a passive fund.
The Fund seeks to track the performance of the Standard and Poorās Total Market Index (the āIndexā).
The Index is comprised of large, mid, small and micro-sized company shares in the US.
The Fund attempts to: 1. Track the performance of the Index by investing in a representative sample of Index constituent shares. 2. Remain fully invested and hold small amounts of cash except in extraordinary market, political or similar conditions where the Fund may temporarily depart from this investment policy.
Number of stocks
As at date 30 Nov 2021
4,034 Stocks
This fund invests in a large number of companies, bringing you the benefits of diversification."
@Theraven This is not an ETF. It is an Open Ended Investment Company (OIEC). You wonāt find any OIECās on Freetrade (policy). Typically such funds are associated with fees and charges. It is available on other platforms in the UK so if you want it you will have to look there.
It appears that iShares has a ETF that tracks the same index but it is not available as UCITS. So will not be available in the UK/EU.
It might be that you need to broaden your search away from S&P ā¦ I donāt want to suggest anything as you seem to be impressed with the fact that the fund you identified tracks 4034 USA stocks. Having such a large number of stocks doesnāt IMO mean much because of correlations - but you are the best judge of this.
It might be different but if you check the performance against the S&P500 it basically tracks it. See below. There is no need to have 4000 stocks when the largest 500 do the trick.
This is a very naĆÆve approach. After all if you capture a share before it enters the largest market cap funds you will get even more from it. Bottom line is @theravenās desire to have greater market coverage is very reasonable. The way people usually approach it is to buy a number of funds e.g. large cap, mid cap and small cap to achieve what they need.
Which is what Iām trying to do, including diversifying worldwide.
From my reading and my understanding so far, Iāve come to the conclusion that the large US caps are, as a whole entity, currently at a peak in terms of share price. Was looking for a fund/etf that would encompass the large caps but also take advantage of what I hope will be a big increase of company stock prices in the medium down to micro US sector.
But it looks as though the approach will have to be via a number of funds. Guess I was just being lazy and trying to keep my admin down to a bare minimum!
No you have chosen a particular time frame. And within that time frame companies and themes come in and go out of favour. This is why for example, at the moment many analysts are slanting away from stocks of a certain cap size.
Your objective and approach makes 100% sense. I obviously have no idea whether large US caps as a whole are at a peak or not . If you are not aware of it have a look at the Passive Investorās FT thread mentioned above it may help you.
Sure, it is definitely reasonable if you would like to diversify even more.
But I donāt see the point of further diversification at least within the same geographical area. Even going back as far as I can to 2001, VTI (which seems to track the same index as the fund TheRaven is looking for, Total Market Index 4000+ stocks) does not beat VUSA since its inception in 2012, greatly underperforms in the same timeframes.
The S&P500 already makes up +80% of the US equity market so I think it is much better to diversify globally instead. But definitely up to you.
Ok and I am not trying to convince you of anything.
You are missing the point this is not about me or my opinion. @TheRaven has a view on diversification and one component of that is that he wants greater exposure to the US market beyond the S & P 500. Later, in another post, he says he wants even wider exposure to the rest of the world: all are reasonable goals.
I understand his idea and the point of his question, definitely very reasonable to invest in all market ETFs!
I simply tried to give my point of view so he may take it or leave it, I thought it was a good suggestion since it would have outperformed significantly over the last 10+ years which is something he didnāt consider. I just defended my approach after you called it naive.
I have very recently started investing my money to as they say āmake it work for meā. Now I try to do my research and pick companies doing well and have done well for a long time. Yet somehow my portfolio is tanking.
Now I have 2 options, 1. Cut my losses start again or 2. Hold out and hope eventually that they will pick up again.
Do to my free share Iām not yet in a loss but even that share is tanking.
Does anyone have any suggestions?
What are other peoples techniques for investing? What advice would you give to a novice like me?
The devil is in the details of what this means. Too many people here pick up stock because others say it is a good stock. This is not research, this is not too different from acting on gossip. Past stock price is not a great guide to future stock price. Too many people think things like āthe future is Hydrogenā and then invest in any company that suggests they are doing something with Hydrogen. Just because a theme might be great doesnāt mean that the stocks you pick in that space might be great. And for people who claim that all is going well: well it is probably true that all is going well for them. But there is something called survivorship bias.
Some people who have invested in the good times or have by luck invested in a stock that rockets (last year was a good year) will get super shocked in ānormalā times. I expect that more than 50% of stock pickers will lose money and many will lose all of it. So invest only what you can afford to lose.
Your best bet to start off with is to play safe and do at least as well (or badly) as the general market. Buy a tracker fund. For ideas read the beginning Investment guides on Freetrade. (Under the Learn menu) . Look up the Passive Investor portfolio thread on this forum. Then come back with specific questions.
If your free stock is preventing you from being down then your portfolio really hasnāt tanked properly A portfolio can go down an awful lot in a down period but as long as it is a diverse portfolio it should eventually climb back up.
As others have said look at longer trends and make a judgement on that but obviously things can/do change so not advice.
Unpopular opinion: donāt do your own research*.
Follow what the actual research says, you are very unlikely to beat the market, so save yourself a whole load of time, effort, money and worry, and just buy the market. (Low cost, globally diversified).
Iām a newb too and began trading with Ā£10 here and there, then observed my stocks (mainly tanking). I quickly realised that I had to do more research than I was, but have not sold those penny shares that tanked. If one of them rockets it will pay for the losses on the rest.
Iām learning not to sell on the dips, but with companies I am confident with, buy more on the dips! It averages the cost of the shares making losses appear lower and profits, as long as the shares grow, will be maximised.
The charts on FreeTrade are a bit tricky because when you look at any time period the price axis is scaled to fit in the largest price fluctuation in that time period. The price fluctuations that you are seeing on a daily basis are often not visible on monthly or annual charts.
I am now seeing dips as opportunities to buy healthy stocks and imagining the market as a set of lungs that breathe in and out, or like waves on the beach as the tide come in.
Good luck with it all and be patient.
As others say here and I believe a Warren Buffett quote - Time in the market beats timing the market.
. If you are not aware of it have a look at the Passive Investorās FT thread mentioned above it may help you.
A portfolio can go down an awful lot in a down period but as long as it is a diverse portfolio it should eventually climb back up.