Aussie FIRE | Financial Independence Retire Early 21. Aussie FIRE Q&A: ETF strategy, FI case study, and investing for kids
Sep 13, 2024
In this lively discussion, the hosts tackle pressing questions about investing for future generations, weighing the pros and cons of property versus shares. They explore the balance between enjoying life and saving for financial independence, providing tips to help listeners indulge without guilt. The conversation dives into the risks of US tech stocks compared to diversified ETFs, emphasizing the need for long-term strategies. Finally, they engage with audience queries, highlighting the importance of community involvement in the financial journey.
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US Indexes Are Tech Heavy
- The US index already gives heavy tech exposure so a tech-sector ETF often just amplifies what you already own.
- Don’t assume past tech outperformance will continue; diversification reduces single-sector risk.
Avoid Sector Concentration
- Avoid concentrated sector bets unless you consciously accept the higher risk of underperformance.
- Prefer broad diversification for long-term investing rather than chasing recent winners.
Tech Is Not One Clear Industry
- Big companies labeled 'tech' often span multiple industries, making strict sector definitions fuzzy.
- Sector ETFs can be arbitrary about what they include, reducing the clarity of the bet.