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In the last couple of years I have been trying to educate myself in what concerns finance. I have put some money on some financial products (shares and ETFs) but I feel like I am playing the roulette sometimes. I have bought stocks of some companies that I know and they are doing ok but I think I would prefer to expand my investments with ETFs. I have been looking to ETFs related to industries that I think should have a bright future like robotics, renewables and water.

I currently own shares of ROBO and PHO ETFs. When I bought these I read a lot of stuff in those 'Best performing ETFs and bla bla' lists but I feel like it shouldn't be the best way to select investments.

Any tips on how to proceed? I am also thinking in investing in ETFs that track world economies like the Vanguard Developed World and Vanguard emerging markets. Any thoughts on that?

  • My best advice is to find a reputable investment firm in your area(ex: I live in the US so I usually look at Vanguard, Blackrock, or State Street). Then I look what industries their ETFs track, their past performance, and their expense ratio. For example I have VIG which is (Vanguard dividend appreciation) which has a bunch of blue chips stocks that increase dividends every year, has an increasing value over the last 10 years, and has an expense ratio of 0.08%. Look out for expense ratios because they will eat profits. – rhavelka Apr 9 at 20:58
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Don't play the "roulette". This means you're trying to determine which funds are going to be the winners (outperforming the market) or losers (underperforming the market), which is so hard, not even professionals can do this consistently.

The simplest ETF that I can recommend (for stocks only) is VT, a Vanguard ETF that covers the entire world. You essentially buy the market, all of it, at the prices that all these large institutions full of very smart financial analysts have determined are their "fair" value. It's a good bet that your guess won't be better than theirs, so why play the game?

What you can control (to some extent) is keeping your costs low, and staying invested for the long term, through the ups and downs of the market. Even better, automate your investment as much as possible and stop reading financial news.

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    +1, but as far as I know the Vanguard VT isn't widely available in europe. Vanguard just started in europe in early 2018. The Vanguard FTSE All-World is available at a lot of european exchanges, though. – s1lv3r Apr 10 at 11:14

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