ETFs: 10 Do's and Don'ts for Beginners

[@malone_financial]

Checklist for investing in exchange-traded funds (ETFs): 1. Do I understand ETFs? If not, have I asked Malone Financial the questions which I need answered? 2. Do I know what investments the ETF holds? For example, is it an index fund (i.e. S&P 500) or more of a specialty fund (i.e. ARK Innovation ETF) 3. Do I know the weighting of each investment within the ETF? I.e. what impact the performance of each underlying investment has on the ETF as a whole. 4. Do I know how the ETF is structured? I.e. is it a 'Physical ETF' or 'Synthetic ETF' and do I know the difference? Also, do I know if the ETF is leveraged and do I know what that means? 5. Do I know what the total expense ratio (TER) of the ETF is? Have I compared this to similar ETFs to make sure I'm getting a good deal? 6. Do I know the dividend status of the ETF? I.e. does the ETF pay out a dividend to shareholders? Is the ETF an 'Accumulating ETF' or a 'Distributing ETF' and do I know the difference? 7. Do I understand the tax implications of ETFs as they apply to me? Am I aware that tax rules are different in every country around the world? 8. Have I researched the cheapest online brokerages where I can buy and sell ETFs? Am I aware of the impact that fees can have on investment performance over the long-term? 9. Do I understand ETF liquidity? I.e. how easy it is to sell the ETF without having to sacrifice the amount of money you receive. Do I know the differences between ETF liquidity and regular stock liquidity? 10. Am I certain that this ETF aligns with my own personal circumstances and investment goals?

[@pet_cow_5452]

Great stuff! You are head and shoulders above most other Irish Financial channels, subbed!

[@pet_cow_5452]

Also, I know it might be impractical and it doesn't bother me in the slightest, but as youtube is often very much about appearances (especially when it comes to financial advice I'd imagine), to optimise your channel I would try to change up the backdrop (ie. a Graham Stephen style desk rather than the bed in the background. I do like how you have done your lighting though). You obviously know your stuff and you are a natural in front of the camera, and also very good at getting the viewer in to your next video, you are doing all the hard stuff right..!! Perhaps also ditch the hoodie. I could be totally wrong but I thought some constructive criticism may be useful. Thanks again for the great information.

[@malone_financial]

@@pet_cow_5452 cheers for the feedback and thanks for watching

[@fabricioantonello8023]

Hey Malone, great video as always, thanks for the great content you provide.

[@josephboyle98]

Brilliant vid Malone keep em comin

[@malone_financial]

Cheers Joe, legend

[@ladioviro]

Thanks Malone

[@JeroTrades]

Excellent content Malone!

[@malone_financial]

Thanks!

[@nahiaramier4244]

Hi, great videos! One question, why you preferred to invest in accumulating ETFs instead of in the ditributing ETFs? I live in Ireland like you

[@stephenedwards7995]

Every informative video, Thanks

[@malone_financial]

Thanks Stephen

[@FYPNLP]

I thank the Algorithm gods right now. Your stuff is mind blowing. New subscriber.

[@magicpants3822]

Great Vid, as always. :D

[@malone_financial]

Thanks my man!

[@oleksandr9080]

Great video!

[@AtoZDesign]

First time I've heard of physical structure - better go check my ETFs. Thanks

[@malone_financial]

No problem, thanks for watching

[@declanmcardle]

@@malone_financial So, FCOJ is synthetic? (Trading Places)

[@nyro1994]

This dude should be the face of the irish investing scene.

[@gerrykelly-zk6lf]

First time i watched a video and took written notes. Your subscriber numbers are not matching your content. You should be over 70k.

[@heurisouza4595]

Excellent explanation 👏👏

[@willoconnell3520]

Hi Dan, have you any thoughts on hedging FX changes for investments?

[@malone_financial]

Hey Will, I currently own a Euro hedged S&P 500 ETF for that exact reason

[@jamesryan3216]

Great video as always

[@malone_financial]

Cheers James, thanks for checking out the video

[@po-perso]

Great content man!

[@gerryclaffey5737]

@Malone Financial, I am approaching retirement over the next couple of years or so. I have some funds rotting away in a bank and I would like to try to get my money working for me instead. I have found your videos very informative, clear, no BS (if still a bit complex for this investing newbie). I would like to invest in ETFs as a result of watching your videos, but the question is how to start. By that I mean , do I start with a small investment in one or two ETFs and add to it after a few months or yearly? Or would I be better (from an ETF fees / cost perspective) to decide instead to say, put 50% of my savings straight into a few ETFs straight off.

[@malone_financial]

Hey Gerry cheers for the question! Personally, I adopt a dollar cost averaging method where I put a consistent sum of money into ETFs each month to average out my returns over time. However, my investment horizon is 40+ years considering I'm still in my twenties. For yourself, it would probably be beneficial to do a lump sum investment at first and then dollar cost average thereafter (not financial advice just my perspective). You'd also have to consider into which ETFs you'd want to invest in considering your age, tolerance for risk etc.! Could be worthwhile going for a consultation!

[@senaska4328]

Hi Dan, a quick question - I've been investing in ETFs for some (short) time living in Ireland but I'm considering a move as I got a job offer in another EU country. Will I have to pay some taxes on the profit I haven't yet made (less than 2 years investing) or will I pay them whenever I sell the shares? Which might be 10+ years into the future and therefore I can't predict at this point in which country... thank you for highlighting the taxation dilemma in different countries, you're right I dove right into investing without properly researching it because of influence of youtubers 😅

[@declanmcardle]

The first obstacle would be what happens in 5.5 years when you have had your Irish purchased ETFs for 8 years. Does deemed disposal apply to non-residents? Watch out for wealth tax in other countries, e.g. if you bring n00k with you - do you have to pay x% on that every year?

[@michaelwalsh4300]

How do you find out if it’s accumulating etf or a distributing etf

[@malone_financial]

It will say it on the fact sheet of the ETF in question. Some ETFs will also have it in their name on the brokerage platform (Ex. ‘Acc’ = accumulating)

[@stephenedwards7995]

Hi Dan. Do you know what is the best online brokers account to get exposure to the toronto stock exchange (tsx)?

[@malone_financial]

I know DEGIRO offers Toronto Stock Exchange exposure, not sure about other brokers!

[@stephenedwards7995]

@@malone_financial Thanks alot Dan I will check them out.

[@michaelrourke282]

Hi can you reccomend any books on index fund investing, maybe something that can break it down in layman's terms for dummys like me. Thanks great video

[@carlosf.2927]

You youtube channel is great, man. Thanks for explaining almost everything with details. I'd like to have a tax consultation with you, could you give me the details (price, etc)? thanks

[@malone_financial]

Cheers Carlos! I don't do personal consultations currently but will let the community know if that changes

[@carlosf.2927]

@@malone_financial thanks for your reply. It'd be helpful that someone like you offers tax consultation because you know a lot of ETFs. I paid for a Tax Consulation and the girl does not know anything about ETFs, how can receive advice from someone who does not invest in etfs?

[@carlosf.2927]

@@malone_financial by the way, can you help me to find an accumulating ETF which tracks SP500, with physical structure and NOT domiciled in Ireland? I couldn't find it

[@briancasey987]

Another informative video, thanks. I have a question regarding ETFs if you don’t mind. If I want to invest in order to build my wealth after 30 years, and I have €500 to invest per month. Is it better to invest in one ETF, such as the S&P 500 or in several smaller ETFs covering different sectors. I would assume that from a tax point of view, one ETF would be more manageable.

[@malone_financial]

Thanks Brian, good question. The answer totally depends on your investment objectives. Clearly, multiple ETFs covering different geographies for example would offer greater diversification (and potentially higher returns I.e. emerging markets). Plus, as you get older your circumstances will likely change, as will your risk tolerance as you approach retirement. I wouldn’t expect you’d be investing in any more than 3-5 ETFs. Given the quality of the tax reports produced by brokerages, I would see this as manageable from a tax perspective.

[@briancasey987]

@@malone_financial I suppose another thing to consider is the expense ratio of each ETF. With the S&P 500 this is just 0.07% but with other ETFs, such as the Automation & Robotics ETF from iShares, this figure is 0.4%. Investing in 5 ETFs with this kind of expense ratio will likely cost much more over the long term

[@malone_financial]

@@briancasey987 Agreed. Specialty ETFs will generally cost more. Totally possible to get multiple index funds for low TERs covering USA, Europe and Emerging Markets if that's what you were going for.

[@briancasey987]

@@malone_financial Thanks Malone. Appreciate the help