I had an interesting discussion with a friend when I told him that he can buy some ETFs if he had some spare money since there are some that I think are pretty good and shared with him an article from BigFatPurse (here) that highlighted some of the good ones.
This article was actually a rebuttal to an article from Straits Times on how to invest if you have $20k or more (here). So my friend rejected ETFs about how their growth are not as good as Unit Trusts. He goes on as saying the dividend yield are as high too. He hated the idea that ETFs are basically holding blue chips.
After quite a lengthy talk about the matter, it let me to just feel everyone has a view on investment channels probably based on their own experiences or what they told by others. Personally I don't quite like Unit Trust because of the fees that are involved as it is usually higher than ETFs. And of course I would'nt put all in either Unit Trust or ETFs.
All in all I think it will be good for us to keep an open mind and be prudent in what we decided to invest in because no one cares more about your money than yourself. Be in Unit Trust, ETFs, REITs or simply Shares always do your research and make sure you do understand what you are purchasing.
4 comments
Hi
ReplyTo be honest, I've always heard that ETF is always better than unit trust. In fact, Warren Buffett was willing to bet against a group of mutual fund managers to the tune of millions of dollars. Although I have not gone into research of the said products, i find the idea of holding blue chip stocks for long term a good deal for those who are "too lazy" or "too busy" to learn the intricacies of the various investment instruments. Afterall, prices of companies will only go up in the long run because of inflation.
Thanks for the comment. Would agree with you that holding blue chips for long term is not a bad deal especially the business is going on well.
Replythe only reason you should fear is when the market is coming down... that's when you hold on to cash until the market looks like it is recovering (and not when the news is reporting it... by then too late). Then go in to the ETFs. because no market goes down forever (not unless you don't mind reducing your pay and we go back to $0.60 coffee)
Replythat's true and always make sure what you know you know what you are invested in.
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