Quote of the Month

"But it is not tougher to succeed now than it was 20 or 30 or 50 years ago. The America that you see 20 or 30 years from now is going to be far more prosperous and talent will always be rewarded. Hardwork will be rewarded. We will have a wonderful future."

Warren Buffett on good habits and start saving early,

Interview with Yahoo Finance Editor-in-Chief, Andy Serwer

 

"In other words, for every dollar you could have made in American business, you'd have less than a penny of gain by buying into a store of value which people tell you to run to every time you get scared by the headlines."

 



Warren Buffet at 2018 Berkshire Hathaway 2018 Annual Meeting
He shared that US$10,000 invested in S&P Index Fund in 1942 would be worth US$51 Million in 2018. The same US$10,000 invested in Gold would approximately US$400,000 in 2018.

Vanguard S&P 500 ETF (VOO)

The Dow Jones dropped below 24000 (intra-day) on 3 May 18. I have been waiting for this level for a few weeks while trying to settle my trading account issue at Charles Schwab.

With the issue settled, I bought some VOO which is a ETF reflecting S&P performance at a unit price of US$240.09. This purchase follows Mr Warren Buffett advice on S&P and my personal experience with Vanguard mutual funds (VBINX). Unfortunately, as a foreigner, Vanguard or the FED has prevented me to purchase mutual funds outside of US. Previously I could purchase mutual funds. I have purchased VBINX more than 10 years ago (in 2007) even before the financial crisis in 2008/2009. The dividend from VBINX was reinvested throughout the years and this mutual fund has been one of the best performed fund over a long period of time. Back in 2007, the Dow Jones was just 13500.

With this in mind, I bought VOO with the intention to hold it for long term, as what Mr Buffett has advised, with dividends reinvested.

The other thing that surprised me was the commission that Charles Schwab earns is just US$4.95. Back in 2007, it was US$14.95. Competition has eroded trading firms commission. Of course, there could even be cheaper commission rate, but I am happy with the support service that Charles Schwab customer service provides.

VOO has an expense ratio of just 0.04%, one of the lowest in its category. This is fantastic for long term investor. The ETF has another advantage in that its price moves with the market and unlike mutual fund where the index is given only at the end of the trading day.