Hi Kai, I am one of the older followers of the channel, you are doing a great job, this is quality content!! Some suggestion for future videos: 1) Look how well S&P ETFs track the index, as there are some significant discrepancies. E.g., I think that the SPDR although having the lowest TER, it might be outperformed by VUSA and IUSA, so VUSA might still be a winning bet. 2) Distributing vs Accumulating. It seems that if you are long term investor (time horizon of 20+ years), accumulating by far outperforms distributing. Re-investment of dividends is costly (fees, bid ask spreads). These reinvestment costs compound in time and can become significant at the end of the journey. 3) History of TER charges in the USA. It might be the case that Europe follows the same trend, i.e., Vanguard might soon be lowering its TER to match SPDR.
Hi Agisilaos👋 Awesome to see you being part of the channel for quite a while now 🙏 Thank you so much for these great ideas! I will definitely keep them in mind. Some of the topics might be quite specific, and it’s true that we have to see how well they'll resonate with the broader RUclips audience. However, they are perfect for deeper exploration in our very soon launching Smart Money Club, where we can dive into more detailed discussions and share insights within a community of like-minded individuals. Your suggestions are incredibly valuable and help in shaping the content that can truly benefit our community. Cheers and happy weekend my friend ✌️
BTW, I just looked at total returns, I guess that factors in tracking error as I could not find a good source to specifically find see tracking errors over time, but yes, SPDR does not perform to well at least over 3 years vs Vanguard and accumulating better than distributing, so will look into this and maybe make a future update video if I decide to change. I guess we live and we learn. Thanks so much for sharing 🙏
@@SmartMoneywithKai Thanks a lot my friend, I really appreciate your reply! I find great that your videos give food for thought while keeping me up-to-date about certain things! I am a market enthusiast having strong conviction regarding broad index ETF investment (especially the s&p 500). My study on market efficiency strongly points to this (I am doing an MBA). Have a great weekend!
Wow, that's awesome you are studying this and glad to hear we are aligned on that, S&P 500 all the way. Funny the more I tried to invest in individual stocks, I now keep on coming back to the S&P, just the gold standard which is hard to beat long-term 😉 Cheers and happy weekend my friend 👋
Great video! I'm at the point where I will start investing, narrowing it down to the S&P 500 or the FTSE-All World, and leaning more towards the former. I believe having a full allocation in the US does leave one open to a world class financial calamity, however to try and guess these is a fools errand. Meanwhile, based on the last decades the more likely risk of potential capital loss with investing in an all-world etf contrary to the S&P just seems too steep a cost for me. Adding on top how globalized the market, and therefore the US companies have become, I believe for now I will go with the S&P500. Perhaps over time once I have accrued sufficient capital (say, 5x yearly expenses) to be less aggressive, I will invest into developed and perhaps developing economies to smooth the ride. After all, the All world ETF is mostly US stocks anyway as mentioned. Thanks once again for your insights!
Thanks for the thoughtful comment and for sharing your investment approach. It sounds like you’ve put a lot of thought into balancing risk and potential reward, which is key to long-term success. Your reasoning about the S&P 500's global exposure is solid-many U.S. companies derive significant revenue from international markets, giving indirect global diversification. Your plan to shift toward broader diversification once you’ve built a strong foundation also makes a lot of sense. The FTSE All-World ETF is indeed heavily weighted toward U.S. stocks, but adding exposure to developed and emerging markets later can help mitigate risks tied to any single region. Staying consistent and focused on your goals, like hitting 5x yearly expenses, is a great way to keep things manageable while building wealth. Cheers 👋
@@SmartMoneywithKai thanks! Curious would your preference still be to pick a distributing ETF even if plan is to re-invest back into same instrument? I don’t know if there are ‘hidden/underlying’ costs to acc for SPDR for example? Thanks in advance
Hi and yes, it would still be as taxation for me is the same and I anyways automatically reinvest, but I like the feeling of 'getting paid' and seeing the dividends grow over time, even total returns are the same, it does feel nice and motivates to continue, that's it :)
Hey Kai . In order to agree with you one must not necessarily be an economy expert but just think rationally. I started since a few weeks to gather informations on etfs and all I hear is diversification and ftse all world and acwi and so on. Though these are per se diversified, all of them have a very big core of American companies. So if America does bad, everyone is basically f…d even those investing in a so called global etf. Furthermore as you said American companies are already very diversified and global. I even recently saw a video about how the more a country becomes industrialized, the more its people begin to consume American products that match with their newly acquired wealth and lifestyle. Do you think that one single sp 500 etf portfolio would be a good long term investment?
You’re absolutely right-global ETFs are heavily weighted toward U.S. companies, and the S&P 500 already gives you global exposure through U.S. multinationals. A single S&P 500 ETF can be a great long-term investment due to its simplicity, strong historical returns, and global reach. That said, it’s worth considering a bit of diversification outside the U.S. just in case the American market struggles for an extended period. A balanced approach could give you peace of mind if that's what you are after 😉 Cheers
Hi 👋 If a company like Vanguard that holds the ETF closes down, the ETF would typically be liquidated. This means the underlying assets would be sold off, and the proceeds would be distributed to investors. However, such events are rare for established firms like Vanguard. Cheers
@@SmartMoneywithKai For now. Who says that this will remain the same after 30 years? Are you sure that in 30 years we won't have a japanese Apple, a Chinese microsoft or an Indian Tesla?
@@iasonas2010 I don't know and nobody does, but I can't wait 20 years and do nothing with my money, in the meantime I invest in what I know and understand and see the potential. If I see US slowing going down and any of those you mentioned consistently outperform I will certainly shift my investments, but for now, that's what I am sticking with 🙌
Of course it's not, but for me close enough, in addition to the other points mentioned in the video, but ultimately it has to work for each investor so if you feel more comfortable with a global ETF then that's perfect. Cheers
FTSE All World is my favorite 🥰 as I don't like putting all my eggs in one basket by only betting on US. But I agree that you should invest in what you think is right for you at this moment in time. 😉
That's awesome, thanks for sharing and fully agreed 🙌 Either one is still soooo much better than going all in on AI hype stocks or meme coins, which sadly still too many people do....until the don't 😉 Cheers
Amazing video as always Kai! I have a question: I am 19 yo and live in Italy, I’m planning on opening an account on IBRK soon and start investing about maybe 40€ a month in S&P 500 ETFs such as VOO and SPY, also maybe QQQ. I would also like to invest money in Silver stocks such as SLV. What do you think?
Hi Fede, thanks a lot, glad to hear that 🙌 Well done on starting early on your investment journey 👏 The ETF's you mentioned are all good choice just in your case if you invest €40 maybe IBKR, as much as I love the platform and use it myself, may not be the best option for you as it's quite pricey in terms of commissions. The larger your investment amount per month get the better, but for now, this €1.5 on a trade would really eat into your returns, in this case I would suggest you to go with Trading 212, no commissions and you can later on always transfer your portfolio to IBKR 👌 Silver, well, I am not a fan of it nor of Gold and looking at SLV 10 year performance it got absolutely smoked by the S&P 😉 Cheers
The conclusion contains the common fallacy that macroeconomic growth causes higher stock returns. In reality, the opposite materializes more often than not. Also vice versa, bad macroeconomic performance correlates positively with above market stock returns. The good prospects of the few US giants are already priced in, they would have to even exceed these to deliver excess returns to stockholders. In contrast in markets that are doing bad like Europe or Japan companies have to pay more for getting money, i.e. in general higher returns to stockholders. It might be time to look at cheap index funds for those markets like the Amundi fonds at 0.05% TER for Europe resp. Japan. I don't dispute that investing solely in the S&P is returns wise probably the best choice. However, ppl who invest in only one country still invite a huge (political) cluster risk, no mater how globally dominant some S&P companies are currently.
You make a great point. A balanced approach can definitely work better for some investors-there's really no one-size-fits-all. Personally, I’m comfortable with a concentrated investment in the S&P 500 because these are globally operating companies, and the U.S. market remains one of the most traded and transparent out there. But I understand why a global ETF could be a great alternative for those wanting more diversification. Ultimately, it comes down to what works best for each person.
VWCE is the ticker symbol of the Vanguard FTSE All World ETF I spoke about in the video and basically it means, the person will keep on investing into that, overtime without having to worry much about their investments and returns will come their way 😉
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Hi Kai, I am one of the older followers of the channel, you are doing a great job, this is quality content!!
Some suggestion for future videos:
1) Look how well S&P ETFs track the index, as there are some significant discrepancies. E.g., I think that the SPDR although having the lowest TER, it might be outperformed by VUSA and IUSA, so VUSA might still be a winning bet.
2) Distributing vs Accumulating. It seems that if you are long term investor (time horizon of 20+ years), accumulating by far outperforms distributing. Re-investment of dividends is costly (fees, bid ask spreads). These reinvestment costs compound in time and can become significant at the end of the journey.
3) History of TER charges in the USA. It might be the case that Europe follows the same trend, i.e., Vanguard might soon be lowering its TER to match SPDR.
Hi Agisilaos👋
Awesome to see you being part of the channel for quite a while now 🙏 Thank you so much for these great ideas! I will definitely keep them in mind. Some of the topics might be quite specific, and it’s true that we have to see how well they'll resonate with the broader RUclips audience. However, they are perfect for deeper exploration in our very soon launching Smart Money Club, where we can dive into more detailed discussions and share insights within a community of like-minded individuals.
Your suggestions are incredibly valuable and help in shaping the content that can truly benefit our community.
Cheers and happy weekend my friend ✌️
BTW, I just looked at total returns, I guess that factors in tracking error as I could not find a good source to specifically find see tracking errors over time, but yes, SPDR does not perform to well at least over 3 years vs Vanguard and accumulating better than distributing, so will look into this and maybe make a future update video if I decide to change. I guess we live and we learn. Thanks so much for sharing 🙏
@@SmartMoneywithKai Thanks a lot my friend, I really appreciate your reply!
I find great that your videos give food for thought while keeping me up-to-date about certain things! I am a market enthusiast having strong conviction regarding broad index ETF investment (especially the s&p 500). My study on market efficiency strongly points to this (I am doing an MBA).
Have a great weekend!
Wow, that's awesome you are studying this and glad to hear we are aligned on that, S&P 500 all the way. Funny the more I tried to invest in individual stocks, I now keep on coming back to the S&P, just the gold standard which is hard to beat long-term 😉 Cheers and happy weekend my friend 👋
Great video!
I'm at the point where I will start investing, narrowing it down to the S&P 500 or the FTSE-All World, and leaning more towards the former. I believe having a full allocation in the US does leave one open to a world class financial calamity, however to try and guess these is a fools errand. Meanwhile, based on the last decades the more likely risk of potential capital loss with investing in an all-world etf contrary to the S&P just seems too steep a cost for me. Adding on top how globalized the market, and therefore the US companies have become, I believe for now I will go with the S&P500. Perhaps over time once I have accrued sufficient capital (say, 5x yearly expenses) to be less aggressive, I will invest into developed and perhaps developing economies to smooth the ride. After all, the All world ETF is mostly US stocks anyway as mentioned.
Thanks once again for your insights!
Thanks for the thoughtful comment and for sharing your investment approach. It sounds like you’ve put a lot of thought into balancing risk and potential reward, which is key to long-term success. Your reasoning about the S&P 500's global exposure is solid-many U.S. companies derive significant revenue from international markets, giving indirect global diversification.
Your plan to shift toward broader diversification once you’ve built a strong foundation also makes a lot of sense. The FTSE All-World ETF is indeed heavily weighted toward U.S. stocks, but adding exposure to developed and emerging markets later can help mitigate risks tied to any single region.
Staying consistent and focused on your goals, like hitting 5x yearly expenses, is a great way to keep things manageable while building wealth. Cheers 👋
Hi, can you please make a video about Bond ETFs?
Makes a lot of sense, thanks for setting it out.
Appreciate that mate 🙌
@@SmartMoneywithKai thanks! Curious would your preference still be to pick a distributing ETF even if plan is to re-invest back into same instrument? I don’t know if there are ‘hidden/underlying’ costs to acc for SPDR for example? Thanks in advance
Hi and yes, it would still be as taxation for me is the same and I anyways automatically reinvest, but I like the feeling of 'getting paid' and seeing the dividends grow over time, even total returns are the same, it does feel nice and motivates to continue, that's it :)
Hey Kai . In order to agree with you one must not necessarily be an economy expert but just think rationally. I started since a few weeks to gather informations on etfs and all I hear is diversification and ftse all world and acwi and so on. Though these are per se diversified, all of them have a very big core of American companies. So if America does bad, everyone is basically f…d even those investing in a so called global etf. Furthermore as you said American companies are already very diversified and global. I even recently saw a video about how the more a country becomes industrialized, the more its people begin to consume American products that match with their newly acquired wealth and lifestyle. Do you think that one single sp 500 etf portfolio would be a good long term investment?
You’re absolutely right-global ETFs are heavily weighted toward U.S. companies, and the S&P 500 already gives you global exposure through U.S. multinationals. A single S&P 500 ETF can be a great long-term investment due to its simplicity, strong historical returns, and global reach. That said, it’s worth considering a bit of diversification outside the U.S. just in case the American market struggles for an extended period. A balanced approach could give you peace of mind if that's what you are after 😉 Cheers
Another great video. Would take me hours to research by myself! Thank you so much 😊
Oh, that's amazing to hear, thanks a lot 🙌
What happens if the company that holds the etf closes down.? Eg vanguard
Hi 👋 If a company like Vanguard that holds the ETF closes down, the ETF would typically be liquidated. This means the underlying assets would be sold off, and the proceeds would be distributed to investors. However, such events are rare for established firms like Vanguard. Cheers
@@SmartMoneywithKai the fact that you took the time to reply makes me feel so moved. SUBSCRIBING 🥰🥰🥰
Of course, anytime and my pleasure 🙌 Thanks a lot and warm welcome to the community 👋
How does it work with the fees? They take it from my investment every year or they take it when I sell my position?
Hi and yes, they automatically take it, you won't see it or pay it, it just comes out of your returns regularly. Cheers
Global companies depend of US companies...so i invest in etf sp500
100% and fully agreed 👌
@@SmartMoneywithKai For now. Who says that this will remain the same after 30 years? Are you sure that in 30 years we won't have a japanese Apple, a Chinese microsoft or an Indian Tesla?
@@iasonas2010 Exactly. It' s a 20years+ marathon...
@@iasonas2010 I don't know and nobody does, but I can't wait 20 years and do nothing with my money, in the meantime I invest in what I know and understand and see the potential. If I see US slowing going down and any of those you mentioned consistently outperform I will certainly shift my investments, but for now, that's what I am sticking with 🙌
Can u please make a video about the different German retirement plans??
Hi and sorry, but I am not an expert on that and not living in Germany anymore and not looking to come back 😉
@@SmartMoneywithKai Deutschland schafft sich ab
I totally agree and follow a similiar strategy.
Nice to hear that 👌
Investing in multinational companies is not the same/ a replacement for global diversification
Of course it's not, but for me close enough, in addition to the other points mentioned in the video, but ultimately it has to work for each investor so if you feel more comfortable with a global ETF then that's perfect. Cheers
FTSE All World is my favorite 🥰 as I don't like putting all my eggs in one basket by only betting on US. But I agree that you should invest in what you think is right for you at this moment in time. 😉
That's awesome, thanks for sharing and fully agreed 🙌 Either one is still soooo much better than going all in on AI hype stocks or meme coins, which sadly still too many people do....until the don't 😉 Cheers
Amazing video as always Kai! I have a question: I am 19 yo and live in Italy, I’m planning on opening an account on IBRK soon and start investing about maybe 40€ a month in S&P 500 ETFs such as VOO and SPY, also maybe QQQ. I would also like to invest money in Silver stocks such as SLV. What do you think?
Hi Fede, thanks a lot, glad to hear that 🙌 Well done on starting early on your investment journey 👏 The ETF's you mentioned are all good choice just in your case if you invest €40 maybe IBKR, as much as I love the platform and use it myself, may not be the best option for you as it's quite pricey in terms of commissions. The larger your investment amount per month get the better, but for now, this €1.5 on a trade would really eat into your returns, in this case I would suggest you to go with Trading 212, no commissions and you can later on always transfer your portfolio to IBKR 👌 Silver, well, I am not a fan of it nor of Gold and looking at SLV 10 year performance it got absolutely smoked by the S&P 😉 Cheers
@@SmartMoneywithKai sounds great, thank you!!
My pleasure, anytime 👋
The conclusion contains the common fallacy that macroeconomic growth causes higher stock returns. In reality, the opposite materializes more often than not. Also vice versa, bad macroeconomic performance correlates positively with above market stock returns. The good prospects of the few US giants are already priced in, they would have to even exceed these to deliver excess returns to stockholders. In contrast in markets that are doing bad like Europe or Japan companies have to pay more for getting money, i.e. in general higher returns to stockholders. It might be time to look at cheap index funds for those markets like the Amundi fonds at 0.05% TER for Europe resp. Japan.
I don't dispute that investing solely in the S&P is returns wise probably the best choice. However, ppl who invest in only one country still invite a huge (political) cluster risk, no mater how globally dominant some S&P companies are currently.
You make a great point. A balanced approach can definitely work better for some investors-there's really no one-size-fits-all. Personally, I’m comfortable with a concentrated investment in the S&P 500 because these are globally operating companies, and the U.S. market remains one of the most traded and transparent out there. But I understand why a global ETF could be a great alternative for those wanting more diversification. Ultimately, it comes down to what works best for each person.
What about a mix 70% VWCE and 30% SP500?
What's the point? Both ETFs overlap over 60%. I would say S&P 500 is already quite diversified.
💯👌
You could but I agree with the below comment, that would be a major overlap and you end up paying more fees so not sure it makes that much sense.
FTSE just makes more sense
Thanks for sharing and sure, it's a great option for people seeking more global diversification 👌 Cheers
just VWCE and chill
not physical replication
What does that means?
😂😂😂👌
VWCE is the ticker symbol of the Vanguard FTSE All World ETF I spoke about in the video and basically it means, the person will keep on investing into that, overtime without having to worry much about their investments and returns will come their way 😉
@@Daniel-zr4pk what do you mean?
VWCE having a few bad days...😏
Over the last 6 months up 14.5%, not too shabby if you ask me 😉