I know this blog is 95% of the time focused on exchange traded funds (ETFs), however I would like to be slightly indulgent here – very similar to my Christmas diet, and take this post on a slight tangent.
In the past few months I have been inundated with invitations from my nearest and dearest to celebrate in their life changing events. Engagements, weddings, significant birthday milestones etc and I’ve realised that there’s nothing like a momentous occasion to remind you about your income (or lack thereof!) as you’re faced with the pressure of finding the perfect gift, or planning the best birthday party or arranging flights to Bora Bora for your best friend’s location wedding. I personally find the gift part the most difficult as you almost always end up spending a great deal on money buying something you’re never quite sure that they’ll like or which they may just hang on to until the opportunity presents itself to re-gift or flog on eBay.
I am currently in this very predicament. A close friend has had her second child and thanks to the birth of her first child, has every baby outfit/toy/apparatus she could possibly need for Round 2.
If I think back to 8 years ago to how this experience played out, it would have looked something like this:
- Go to the source. Speak to said gift recipient and drop hints about what they would need or like (‘So, how many bibs does Junior go through a week?’, ‘I really like the new Peppa Pig video, do you?’)
- Head to the closest Westfield at the crack of dawn on the weekend to avoid the crowds and the chaos trying to get a car spot.
- Once you reach the stores, realise that there is no customer service assistance anywhere when you’re trying to wander the Myer floor holding a nappy dispenser that looks like a giant elephant.
However, thanks to the evolution of the retail market we now have a myriad of internet shopping options. No longer do you have to be at the mercy of the store and their shopping hours, you can purchase what you need 24 hours a day. You don’t have to commit to that one gift or purchase, you can now buy online vouchers for stores that aren’t even in Australia for anything from homewares to cooking classes or travel experiences.
The funds management sector is just the same, constantly evolving to the needs of the investor. If we think back to how we first invested our money, you needed to fill in application forms, attach a cheque and post the documents back (before the cut off period) to the fund manager. You wouldn’t know the price you paid for the units until the confirmation was mailed out to you. For shares, if you wanted to gain exposure, for example, to the members of financials sector, you would do your research, then buy shares in your chosen bank through a stockbroker. ETFs take this evolution one step further. Nowadays, you can buy or sell ETFs anytime during the trading day and gain access to the whole financials sector in one trade, instead of banking (pardon the pun) on that one institution. Just like online shopping, ETFs won’t solve all of our problems, you still need to do your research and understand what you want and need, but they certainly can make finding a solution a great deal easier.