Index investing, here I come!

Coins and plant, isolated on white background

Things have been hard as Mr. German and I struggle to work together on our long term goals.

So we took a much needed week-off work to give ourselves time to figure it out.

While it may sound boring to most, I spent the entire week learning about different investment strategies.

The Dow Jones between 1900-2012 – up up up!

I’m choosing index investing! It suits my personality the most because it offers a simple, passive strategy with low fees and high performance.

Jim Collins explains it well in his stock series. Which I read the entirety of plus some repeats over the past week. It was easy to understand for a beginner DIY investor like me, and has saved me months of research. Thanks to Jim’s advice, he has also helped me get me over my fear of investing.

Since I’m a transplant and hold residencies in both Canada and Germany, the Canadian Couch Potato, EconoWiser, and Smart Kohle have also been invaluably helpful to me on setting things up locally.

This is what I’ve narrowed down to (the percentages are my allocations):

  • VCN: Vangaurd FTSE Canada All Cap Index ETF – 35%
  • VUN: Vangaurd US Total Market Index ETF – 35%
  • VWRL: Vanguard FTSE All-World UCITS ETF – 30%

100% stocks and no dollar-cost averaging, meaning that once I set up my brokerage accounts in both Canada and Germany, I’m going to buy these all at once! (VCN & VUN in CADs, VWRL in euros)

I know I’m heavy on the US markets, since VWRL is also US-heavy, but I’m comfortable with that. VWRL is also the fund that I’ll contribute regularly to, since it’s held in my German account and I live and earn an income in Germany.

I’m also about to purchase iShares DivDAX UCITS ETF, a fund that tracks 15 German large caps traded on the DAX. This will be through my Vermögenswirksame Leistungen (VL) account with money contributed from my employer. Not sure what the status is on this yet, the papers are still being pushed.

P.S. I haven’t included Mr. German’s networth in this mix, since he may want to buy real estate with his stash.

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6 thoughts on “Index investing, here I come!

  1. Congratulations on starting your journey in investing! I am also a big fan of long term ETFs investments since I don’t like to have to always monitor my portfolio. After you mentioned about VL on my blog, I asked my company about it and learned that they already invest it into my pension for me! Nothing changed but it felt good to know. All the best for your investments.

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    • Hi Chun Yi, you’ve been a big help to me in setting up my financial life here in Germany. Keep up the good work! I’m glad I could *sort-of* help you out by getting VL onto your radar. 😛 I didn’t even know there were individual pension accounts here in Germany, let alone a employer contributions. *sigh* Are you willing to share the ETF(s) you invest in? No worries if not.

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      • Pleasure! I have DEKA DAX UCITS ETF that tracks the DAX index which has a really low expense ratio of 0.15%. I also have ISHARES EURO STOXX 50 UCITS ETF to gain some exposure to Europe as a whole and FIRST STATE GREATER CHINA GROWTH FUND A CAP EUR for exposure to Asia. Currently I am looking at options to put some money into USA to balance my over-reliance on EU and Asia. I will checkout the Vanguard option you mentioned above!

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      • The expense ratio of VWRL is 0.25%, but I tend to be partial towards Vanguard because of their ownership structure in the US. This may or may not matter, especially to investors outside of the states. But I’m going to risk it for now. Thanks for sharing your funds! My VWRL gives a broad market coverage but I’m also leaning towards an Asia fund, so I will check yours out. 🙂

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  2. Pingback: Personality types and retiring early | Ms. Canadian Expat

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