What am I doing wrong?

[Deleted User]

The specific problem with Dow is that it was not designed to be invested in. There are a lot of extra hidden trading costs if you go for it.

You can easily invest in S&P 500 instead. This index performs the same as Dow in the long term, but is much cheaper to hold. You would be less impacted if a single large company were to go belly up.

Investing into S&P isnt a bad idea. Thats what Buffet recommends. Anyone in S&P over the last 10 years will have crushed the rest of us in terms of returns. Of cause the next 10 years could be different. 

Personally I wouldnt buy gold at all. Long term you will have zero return minus costs.
You dont want to hedge. You would likely do worse long term than if you dont.
Indices already have property and I dont understand the urge to buy more.
Bonds, on the other hand, are a useful ballast to any portfolio, which do have positive long term returns.

I am holding S&P 500 via VUSA ETF. 

AnotherJoe

Because the pound rose 3% against the dollar !

AnotherJoe

Heisenberg01 said:

Without sounding stupid, can I just invest my small sipp following the Dow?

Yes you can. But whats stupid is not asking if you can invest to follow the Dow, but wanting to follow it

S&P 500?  Yeh I can see that.  A basket of US stocks?  Sure (though that will be v similar to S&P). A managed fund (like you have now, that invests wholly or mainly in US  Sure, why not.

The Dow on the other hand is a bizarre index in several respects and only someone who doesn't know about it would want to invest in it.

FWIW the two funds you currently have I'd pick over following the Dow any day.

 

[Deleted User]

AnotherJoe said:

Because the pound rose 3% against the dollar !

So? Moves up and down. At any given time you will be buying the same value of stocks for the same amount in GBP, whether you use a hedged fund or not. 

Prism

You are currently investing in what have been amongst the best performing funds this year and for many years before it. Why change now just because they have yet to reflect Fridays US equity gains? You will likely see a decent rise in both funds on Monday.

AnotherJoe

Deleted_User said:

AnotherJoe said:

Because the pound rose 3% against the dollar !

So? Moves up and down. At any given time you will be buying the same value of stocks for the same amount in GBP, whether you use a hedged fund or not. 

Not in dollars you wont !  If the dollar falls vs pound you can buy more US dollar priced stocks with your Pounds than when the dollar rises.

When the dollar is lower vs pound yes you'll be buying the same amount of stocks in Sterling terms, but more US stocks because your pound buys more dollars.

 

 

[Deleted User]

AnotherJoe said:

Deleted_User said:

AnotherJoe said:

Because the pound rose 3% against the dollar !

So? Moves up and down. At any given time you will be buying the same value of stocks for the same amount in GBP, whether you use a hedged fund or not. 

Not in dollars you wont !  If the dollar falls vs pound you can buy more US dollar priced stocks with your Pounds than when the dollar rises.

When the dollar is lower vs pound yes you'll be buying the same amount of stocks in Sterling terms, but more US stocks because your pound buys more dollars.

 

 

Not quite sure what you are trying to say. 

At any given time Bob and John will be able to buy the exact same value of shares with 10 pounds, even though Bob buys hedged and John - unhedged. At that point in time, it does not matter if you are counting in dollars or pounds or rubles. If they are buying S&P 500, John and Bob will have purchased the exact same number of APPL shares within their funds.

From the moment of purchase the number of APPL shares in John’s and Bob’s account will begin to diverge to reflect currency fluctuation as well as the additional hedging costs incurred by Bob. 

How much you can buy does depend on how much your currency is worth (obviously) but it has nothing to do with hedging.