Which ETF to Buy? Investors Build Wealth with These Indexes
That blackheads, depending on their appetite, leave less of the roast, is known. The same logic applies to asset accumulation. Until all participants have used commissions, there is hardly anything left in life insurance , for example .
Fund managers are also picking up stocks , which is why actively managed funds cost on average almost 2% of the investment amount per year. On average, 0.44% are passive ETFs that simply track the performance of an index. And worse, the index funds also do not fare well. For this they save over the years a few thousand dollars of unnecessary costs.
Which ETF to buy?
In general, ETFs are the better choice. But which ETF should you buy now? The agony of choice results from the fact that they are affordable for every budget. As a savings plan you can already pay $20 a month. With an annual return of 6%, even the small amounts after 30 years at least $19,585.
Anyone who now decides which ETF they should buy, could initially orientate themselves on this brand: The MSCI World with more than 1,600 companies, so to speak, from the global economy and came to its current level since 1970 on an average increase of about 6.8% per year. Thus, the aforementioned savings income is more in the range of $20,000.
When saving, long-term thinking is required. In troubled times simply keep your nerve, because over the years, losses iron out again: Time heals here too. Thus, the Dax has increased since its beginnings in 1988 on average by 8.52% a year, including dot-com bubble and financial crisis.
The higher return again raises the question of which ETF to buy. In general, asset accumulation applies: the more widely spread, the better. And the more widespread an index is, the less fluctuations it exhibits.
1. MSCI World as a base
In that sense, the MSCI World is the base index for classic ETFs. Larger and safer, it is probably not, especially since a large part of the companies come from the United States. With annual costs ranging from 0.12% to 0.5%, MSCI World ETFs may require slightly more than Dax ETFSs, which range from 0.08% to 0.16%, but the German economy is highly export-dependent.
If you rely on just one country, you can be wrong even with a leading industrial nation. Drastic example is the Japanese index Nikkei 225. Until 1990, he noted at almost 40,000 points and has been worth just over half for many years. So if you stay at the MSCI World as a base, so the low monthly installments in savings plans provide enough leeway for additional yield enhancers.
2. Nasdaq as a driver
Here, next, the Nasdaq 100 would be shortlisted. Looking at the yield triangle of the index, since the end of 1997 there has been an annual plus of a respectable 16.5%. And that at ETF costs of no more than 0.3%. The advantage of the Nasdaq 100: Even if the hype around technology stocks should give way, it contains the big players, such as Apple , Alphabet / Google , Amazon or Microsoft , which significantly influence our future.
Of course, among the countless, often younger indices of the ETF industry, which serve all sorts of investment needs, there are few historical long-term values. But there are promising core indices with sectors whose future has just begun. Above all: artificial intelligence , robotics and automation.
3. Robotics for the future
For example, Global Robotics and Automation Go UCITS ETF, the cumbersome name, costs 0.8%. For this he brought in 2016 an increase of 20.77% and 2017 already over 28%. The global industry is represented, which is why it makes little sense if individual representatives fall behind in the future selection process or are taken over. In any case, automation and digitization will change the world sustainably.
With three exemplary selected positions could be build up a considerable fortune without high costs. The important thing is that an ETF is accumulating, so reinvestments such as dividends . Adding a Dax ETF reduces the currency risk in the portfolio. That being said, it can also be a currency opportunity.