- May 28, 2024
- Posted by: legaleseblogger
- Category: Related News
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# Making Investment Decisions at 28
Making the decision to start investing can be a daunting task, especially when considering factors like age, risk tolerance, and potential return on investment.
## Situation in Hungary
Living in Hungary, part of Eastern Europe, can present unique challenges and opportunities when it comes to investing. With €8,000 at your disposal, choosing the right investment vehicle is crucial for building a successful portfolio.
### Choosing Between S&P 500 and All-World VWCE ETFs
Considering your relatively high volatility tolerance and desire for higher returns in the short to medium term, deciding between the S&P 500 and All-World VWCE ETFs can be a tough call. The S&P 500 historically yields 3-5% higher returns annually, making it an appealing option for potential growth.
#### How AI Legalese Decoder Can Help
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### The Importance of Clear Communication in Legal Documents
Clear and precise communication is crucial in legal documents to ensure that all parties involved fully understand the terms and conditions outlined. Ambiguity or confusion in legal language can lead to misunderstandings, disputes, and even costly legal battles.
It is essential for legal professionals to carefully draft documents using clear and straightforward language that leaves no room for interpretation. Including definitions for complex terms, utilizing simple sentence structures, and avoiding unnecessary jargon can help to improve the clarity of legal documents.
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Historical performance doesn’t mean it will happen again. There is not much of a predictability possible on the stock market, the money market and treasuries are for that.VWCE is more diversified, you are not forced to choose between countries. On the other hand, if you are a believer in US dominance… The question about risk is one that you have to answer yourself.
It does not make sense too much, but you can buy both. I do that too from time to time.
I’ve just bought VEVE (FTSE developed world index) to have some world exposure, although it’s very correlated to USA. I did not buy VWCE simply because I don’t like emerging markets, not even at market weight. Sure, they might dominate in 30 years but coming from an EM country myself, I just don’t believe that anything substantial will happen in these countries (maybe except India) that individual investors could benefit from.
It all depends on how much exposure to the USA you’re comfortable with as the S&P500 is based on American companies.
Yes it could be argued it’s not risky as it is the world’s foremost superpower, and you could say if the USA were to lose that status or not be as strong then we’d have other problems to worry about than our investments.
Also wondering this 🙂
However, thinking about long term (30 years) who knows how the USA will be
27 here, also started recently, spent 1-2 weeks on this topic VWCE vs VUAA, I choose 100% VWCE. Indeed, VUAA could have higher returns, if this is what you need, go for it.
It depends on how much you trust the USA to keep their dominant position for the next years. In case, SP5A might be a cheaper alternative to VUAA, lower TER and NAV
Based on which market you believe in (preference) and wanna bet for the future. US only, vs the world.
VWCE and VUAA are both good ETFs that track diff indexes. Yes, a lot of companies in VUAA are also in VWCE, because currently US is leading the world. Would it last for the next couple of decades, or would it not, no one knows.
If you happy with taking some risk, why not choose VUAA now, and if turn out US lose it’s dominance in the future you can sell it and switch to VWCE.
As you are a Hungarian tax resident, you can do it without any extra Tax, if you use TBSZ account (tax free investment account, if keep it at least 5 years).
VWCE = more diversification
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I chose VWCE and with the spare amount that I’m ok with risking it for short to medium term higher returns, I’m buying directly stocks for companies that grow quick these days.
You can’t go wrong with either one. And VWCE is not less risky, because both ETFs are all stocks and they correlate too much because the S&P500 constitute 60% of VWCE anyway.
So why go VWCE? It is extra diversification that the common argument for it is: if the international stocks outperform US stocks, you won’t miss out.
I personally chose not to worry about the above scenario, and hence I went the all VUAA path.
I have 60% VUAA 40% VWCE! I like the higher exposore to SP500 and expect higher returns too.
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I would get VUAA and rebalance in 10-15 years to VWCE. No way USA gets undermined in the next decade. In the next 20 maybe.
Can I ask what brokerage did you choose? At IBKR for example is not possible to buy this two ETFs.