mywealthway.bsky.social
Just a regular European guy documenting my path to financial independence & sharing tips along the way.
Important info: corporate employee, late 20s, no formal financial background
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Liquidity is important because it
1) Lowers Is Trading Costs (tighter bid-ask spreads),
2) makes easier Entry & Exit (buy and sell due to high availability and demand) and
3) makes pricing more accurate (keeps ETF prices aligned with the NAV
#ETF #stockmarket #investing #wealth
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An ETF that has millions of shares and traded on a "minute-base" is higly liquid. An ETF that has only 40 shares is more difficult to trade and thus has low liquidity
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Liquidity is defined by Trading Volume (daily trading volume of the ETF. Higher trading volumes have tighter bid-ask spreads) and Underlying Asset Liquidity (the number of shares created in the primary market).
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Higher trading volumes have tighter bid-ask spreads) and Underlying Asset Liquidity (the number of shares created in the primary market).
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What about diversification in terms of assets ?
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These assets are crucial for covering immediate expenses and emergencies and take advantage of investment opportunities.
#liquidity #savings #investing #FIRE
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That’s just the start unfortunately
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Gold all the way, great returns and great stability. There is a reason why, for ages, investors tuned to gold in time of uncertainty
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EU to follow!
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Investments in "fun money assets" should not exceed the 5% of your total portfolio.
My strategy allows fun money to be at max 2% of my portfolio. Currently it is sitting at 0%
#investing #personalfinance #funmoney
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This difference will compound in the years, leading to a substantial difference in performances.
Be always aware of the TER
when investing.
#personalfinance #savings #investing #money
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Example:
ETF A has a TER of 5%, ETF B has a TER
of 1%
ETF A = ETF B in terms
if performancees (they track exactly the same assets). Lets suppose that the ETFs do a +100% in a year. If we subtract the TER, at the end of the year ETF A will have a performance of 95% increase, while ETF B of 99%.
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A high TER can negatively affect the performances of your portfolio (not if the ETF itself) as a bigger chunck of your money is withdrawn every year, affecting overall performances.
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The TER can be found in any information/document section of any fund/ETF and It is expressed in % (For example 0.6%). So if you invest 10,000 EUR in an ETF, the fees you are going to pay 60 EUR of fees a year.
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Bonds are a safer investment instruments and the older we get, the higher the weight on bonds should be in our portfolio.
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Bonds are typically bought and sold in the financial markets, where their prices can fluctuate based on: interest rates, credit quality, economic conditions. They are considered a safer compared to stocks, as they offer a
predictable stream of income and are often perceived as less volatile.
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In return, the issuer agrees to pay the investor a fixed interest rate, known as the coupon rate, at regular intervals until the bond matures. At maturity, the issuer repays the investor the bond's face value, also called the principal or par value.
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ETFs are traded on stock exchanges, just like individual stocks. They're popular because they offer easy diversification and can be bought and sold throughout the trading day.
#personalfinance #ETF #stock #investing
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When you buy shares of an
ETF, you're basically buying a piece of that basket. It's like buying a variety pack instead of just one thing. Performances of the ETF reflect the performances of the companies included in the basket.
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Similarly, we can have an ETF that contain all companies that are based in a specific geographical area, or companies that have a CEO whose name starts with "K". Anyone can make rules for an ETF.
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So why use a saving account if returns are low? Savings
accounts offer a secure place to store money, so they are a great place to put money for an emergency fund, to keep the valhe of the investment over time and protect your money from market crash and volatility.
#savings #fire #personalfinance
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The interest rate on savings account might vary bank by bank, so do your researches and find the bank that is the most suitable for you. My bank gives me 1.75% a year on my saving account.
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Saving accounts are tipically used to save money for future use on the long term or used as emergency accounts. The account typically earns interest on the deposited funds, allowing account holders to grow their savings over time. However those interest are low (between 1 and 3%).
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At the end of every month, quarter and year, I will be posting financial updates on my net worth!
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Follow me if you are interested in this world