
Ask HN: Do you invest in funds? If so, which ones and why? - tomhardman0
Hi HN,<p>I&#x27;ve recently started researching cautious investment opportunities such as passive index tracker funds. I&#x27;m wondering if a lot of HN users are already using such financial vehicles for their savings? If so, how do you choose what funds to buy units in? And lastly, any tips?<p>Thanks!
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shoo
While not directly answering your question re: choice of funds, i personally
found reading the following books helpful:

    
    
      1. "A Random Walk Down Wall Street" - Burton Malkiel
      2. "Fooled by Randomness" - Nassim Taleb
      3. "The Little Book of Value Investing" - Christopher Browne
    

I suggest avoiding investing in things that you don't understand. You can keep
learning and make small-scale experiments over time.

I started off with vanguard ETFs indexing the whole market, then after a year
or so read about measures of long-term valuation like CAPE and started buying
into country-specific ETFs that seemed undervalued by those metrics, then kept
reading about value investing, portfolio theory, etc, and am now mucking
around selecting and buying stocks of individual companies. This is not
necessarily a sound investment idea, or a good use of time, but is something
of a hobby.

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codegeek
The popular advice specially on HN is to go with low cost Index Funds
primarily provided by Vanguard. I personally prefer Fidelity and their low
cost Index funds which are FUSEX and FUSVX. Both have very low expense ratio
and their returns have consistently beaten the so called "target date" funds.

If you do use Vanguard, there is VFINX that is similar.

The reason index funds are so popular is because they consistently beat the
other high cost mutual funds and their costs/fee are much lower.

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FabHK
1\. Low costs. Seemingly small fees (such as 1% p.a.) eat up a third of your
savings over three decades.

2\. Diversify across countries/asset classes. ETFs help. Or adopt a core-
satellite strategy (most in some solid cheap broad ETF, a few chunks into more
speculative investments.)

3\. Be aware of distinction between real/nominal returns (inflation),
gross/net returns (fees), total/price returns (dividends).

4\. If a bank (or any commission based advisor) recommends it, your first
instinct should be: RUN

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fiftyacorn
Ive read Inteligent Investor and Bogleheads, plus Warren Buffetts annual
letters, and my conclusion was low cost index trackers - mainly vanguard

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baccredited
Do what Warren Buffet tells his heirs to do:

    
    
      90% VOO
      10% BND

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qwrusz
Sounds like you're already doing some research and are off to a good start.

There's a couple book recommendations in other comments that mention some
famous great books about investing. "The Intelligent Investor" for example is
_the_ classic to read on the subject. Just a heads up, many of these books
about investing are about actively investing yourself, in particular picking
stocks yourself, which has almost nothing to do with investing via broad
passive index funds. I'm not saying don't read those books, please do
research. However I just wanted to write a heads up: many people who read
these books with a goal to learn more investing in general and who prefer to
stick with broad passive index funds for their own money, well somehow almost
everyone I see who reads these books ends up starting to try to actively pick
stocks afterwards anyway. So I fully agree do a lot of research, learn about
investing as much as you can and read any/all books that might interest you.
Just wanted to give the warning before you do read these books...that as good
as those books are on investing, they are also like gateway drugs that often
make people want to try their hand at picking stocks and timing the market
after they read them. Ultimately it's your money and up to you.

Another option, in addition to reading online and reading books, is to look
into hiring a registered professional investment advisor help give you more
in-depth information and answers that are specific to your situation.

Some investment advisors work off a percentage of your assets and they invest
your money on your behalf but there are also many many other registered
investment advisors who just work for an hourly fee when you go to meet them
and they don't even offer any investing services at all. They offer
information and knowledge about investing, the meeting is 1 on 1, and they
charge by the hour or by how long the session takes.

One reason I recommend looking into a fee-based advisor like this is to answer
your questions but also provide answers that are specific to you; based on
things like your age, your goals, any other assets you have (like a home),
factoring in if you have a 401(k) or something like it through your
employment, etc...Of course a professional can answer your questions about
various funds too, but there is a host of other issues to consider when
picking passive index funds. For example tax-advantaged investing is going to
be unique to you. You want to avoid overpaying taxes on investment gains, many
people get this wrong without professional assistance and could have saved a
lot of money had they set things up right earlier. Likewise, what State you
live in or if you own a home might affect which types of passive index funds
make sense for you. Just another thing maybe worth researching as you go
through your due diligence. Best of luck.

