Investing

Low Cost S&P 500 ETF to invest in ?

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  • Jul 9th, 2020 10:48 pm
[OP]
Jr. Member
Mar 17, 2015
173 posts
48 upvotes
North York, ON

Low Cost S&P 500 ETF to invest in ?

Guys

Can you recommend me few lost cost S&P 500 or Dow ETFs to invest in ?
35 replies
Sr. Member
Jun 3, 2012
608 posts
243 upvotes
Scarborough
VOO. Lower fees than SPY.
Jr. Member
Jan 18, 2016
181 posts
49 upvotes
Winnipeg, MB
Do yourself a favor and spend a couple of hours listening to this before going the ETF route. Warning, you may have to listen a few times to really start to understand what Mike is saying here.
but the warning is chilling. https://ttmygh.podbean.com/e/teg_0003/
Deal Addict
Jan 3, 2013
2103 posts
353 upvotes
Sidney
Cocoboy1993 wrote: Guys

Can you recommend me few lost cost S&P 500 or Dow ETFs to invest in ?
Low cost as in what, the management fee or the actual price per unit?
Newbie
May 14, 2015
78 posts
63 upvotes
Hamilton, ON
So, you decided against the dividend ETF route from your previous posts, eh?

If you can do norbert's gambit, go VOO.
If not, go XUS. Both are below 0.10 MER.

Whatever you decide, STICK TO YOUR PLAN. You'll lose money constantly trying to change strategies. Just some friendly advice from somebody who's learned the hard way.
[OP]
Jr. Member
Mar 17, 2015
173 posts
48 upvotes
North York, ON
AdventSign wrote: So, you decided against the dividend ETF route from your previous posts, eh?

If you can do norbert's gambit, go VOO.
If not, go XUS. Both are below 0.10 MER.

Whatever you decide, STICK TO YOUR PLAN. You'll lose money constantly trying to change strategies. Just some friendly advice from somebody who's learned the hard way.
I realized that I should start investing in S&P500 and the best way would be to invest in ETF. What do you think about VFV ?

BTW, XUS doesn't really has any clear dividend history ?
Member
Dec 13, 2005
285 posts
153 upvotes
I use VFV and have been happy with it. I'm not sure how it compares to other CAD denominated S&P ETFs. For me there is a small consideration for diversifying between issuers, for example Vanguard and BlackRock and BMO so that not all eggs are in the same basket. But yeah something would have to really go exceptionally wrong for any of those companies to halt redemptions.
Jr. Member
Jan 18, 2016
181 posts
49 upvotes
Winnipeg, MB
Cocoboy1993 wrote: I realized that I should start investing in S&P500 and the best way would be to invest in ETF. What do you think about VFV ?

BTW, XUS doesn't really has any clear dividend history ?
and how did you come to that realization? honest question, not trying to bait. Its just that by all objective measures, we have one of the most expensive markets in history (according to PE), a GDP that is about to contract, and central banks around the world buying whatever they can to prop it all up. it just seems like looking for the lowest MER S&P fund is trying to pick up nickles in front of a steamroller.
Deal Fanatic
User avatar
Sep 1, 2013
5656 posts
596 upvotes
twowood wrote: and how did you come to that realization? honest question, not trying to bait. Its just that by all objective measures, we have one of the most expensive markets in history (according to PE), a GDP that is about to contract, and central banks around the world buying whatever they can to prop it all up. it just seems like looking for the lowest MER S&P fund is trying to pick up nickles in front of a steamroller.
I am really trying to keep and open mind here, but am not prepared to sacrifice a couple of hours of my life listening to podcast just to understand what you mean. Is there any chance you can elaborate on this? Or perhaps direct us to a written summary of the podcast?
Jr. Member
Dec 31, 2018
173 posts
218 upvotes
twowood wrote: and how did you come to that realization? honest question, not trying to bait. Its just that by all objective measures, we have one of the most expensive markets in history (according to PE), a GDP that is about to contract, and central banks around the world buying whatever they can to prop it all up. it just seems like looking for the lowest MER S&P fund is trying to pick up nickles in front of a steamroller.
No matter what time we are in, there is no evidence that timing the market works. All the information you listed is already factored into the price of stocks.
Jr. Member
Jan 18, 2016
181 posts
49 upvotes
Winnipeg, MB
CheapScotch wrote: I am really trying to keep and open mind here, but am not prepared to sacrifice a couple of hours of my life listening to podcast just to understand what you mean. Is there any chance you can elaborate on this? Or perhaps direct us to a written summary of the podcast?
fair enough, i don't know of a written summary yet, though Bill Fleckenstein promised to do one behind his paywall site. I will attempt to provide one here as a process to help me understand it, though I've only listened to it a time and a half, so caveat emptor...nonetheless...
1. passive investing basically chases momentum of the stock market. momentum being defined as the active trading component.
ie. if the S&P goes up, passive funds will follow.
2. because of the low costs, and returns as good or better, money is flowing out of active investing at greater and greater rates. current estimates have Passive investments at 43% of the overall stock market.
3. at a certain % of the total market, Passive investments begin to 'generate their own gravity'. i.e. active investments are no longer needed to raise the market, the money flowing into passive will do the trick just as well. what that % is and the exact impact on the markets is not knowable, however clearly some impact is currently being felt.
4. The big point i believe, is that for this to reverse, it does not require active managers to start to sell, it simply requires passive investors to stop buying. This is what happened this spring when the S&P dropped 35% in a month. the funny thing with math is that even though the market is up 45% since that time, it is still down 5% overall.
5. What stopped it from falling? massive and I mean Trillion $ massive injection by the central banks for the world. now if you believe MMT, lets just stop now. I'm not going to debate that with anybody. but the point is that nothing has really changed since Feb. If anything, it has gotten worse with pressure to re-open economies being conflated with the idea that somehow wearing a mask infringes on a person's personal rights, but i digress.
6. conclusion: if the next downturn does not come with similar Gov't money printing, and/or people lose faith in the Central banks, then not only will there be a lack of buyers, but an abundance of sellers, in which case the bottom is far lower than we saw in March.

If you've stuck with me this long, thanks, if not, TLDR: Passive investing is just chasing momentum and has started a feedback loop increasing the market. When it reverses, it will be very bad.
Jr. Member
Jan 18, 2016
181 posts
49 upvotes
Winnipeg, MB
TrickleDownEconomics wrote: No matter what time we are in, there is no evidence that timing the market works. All the information you listed is already factored into the price of stocks.
Pardon me, I don't mean to be rude, but that really is just lazy thinking. I say that because there is increasing evidence that value investing is dead. So if value investing is dead, momentum investing is all that's left, and that's just a flat out dangerous dance partner.
Deal Fanatic
User avatar
Sep 1, 2013
5656 posts
596 upvotes
twowood wrote: 5. What stopped it from falling? massive and I mean Trillion $ massive injection by the central banks for the world.
Thank you for the summary, but this is the point where the logic of the argument falls apart. The price of a stock is based on the present value of all anticipated future returns, not current monetary policy.
Deal Guru
Jan 27, 2006
14555 posts
7453 upvotes
Vancouver, BC
CheapScotch wrote: The price of a stock is based on the present value of all anticipated future returns, not current monetary policy.
People are expecting future returns to be higher due to the current monetary policy - ie with the various central banks and governments pumping money into the economy and the hands of the consumer, the anticipated future returns would have been lower.

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