Me! Again... (fund help)

I'm back to drain you all again.

Some of you are probably pretty familiar with my situation and activity so far (or lack of activity).
I'm starting to think that at this stage in my life the best thing I can do financially is to increase my earnings and start saving. I have some money in a few funds, which have dropped by about 50% since I invested in them.
I don't think I'm going to bother investing in shares at this stage, as I don't really have the capital to make it worth while (in my opinion). At least not yet.
Although I still have my Macquarie fund. I'm currently using their cash account for the interest rate.

I'm thinking of opening a new fund or two (considering vanguard) and setting up a regular contribution plan. I want something long term and don't plan on touching the money for 5-10 years, but still making regular deposits.
Any ideas on what sort of fund would be appropriate?
(I'm thinking of a high growth fund, and possibly re balancing it down the line to generate some passive income)

I'm not sure whether to leave the other money I have invested or to withdraw it and use it to start up my new savings fund...

Thanks for any help.

check out netwealth.com.au they allow you to invest in virtually any fund you like and have regular contributions go into each of them. They also invest into the wholesale fund versions which offsets some of their fee's. They also have research tools to help you select a fund.

If your not sure on a mix of funds, just choose their generic growth fund which diversifies into various sectors.

You also get 1 tax statement and everything is in 1 neat place.

Or if you want to get started into shares, just buy a comsec aussie share pack.

remember investing doesn't need to be complex. I would choose a main primary Australian large company share fund, and invest regularly into it. choosing more specialized funds, you carry a larger risk of the chosen sector doesn't perform.

I think to decide this you need to do some calculations.
consider the following;

How much money are we talking about here: that needs to be kept in mind for the context of the next few considerations.

What will the capital gains tax be like if you sell the existing funds. (i am guessing it will be nill because you have made a loss). What will the overall effect of this tax have on your overall tax considerations for this financial year which is the year you will incur the tax.

What are the ongoing fees like on the existing fund you are in, and how does that compare to the fees in the fund you are thinking of switching to. Think in terms of the timeframe and amount you are investing.

What are the applicable entry and exit fees in switching.

What is your investment timeframe, how flexible is it. Do some rough calcs of management fees over the expected term of investment.

And also - does the existing fund, or the fund you want to change to meet your risk profile and investment goal. Hopefully you will be moving toward a more suitable fund.

Hmm, thanks guys.
That gives me something to think about.

I'm checking out the netwealth site now.

I always said I would leave the invested money where it was and see what happened. But if it will be better off somewhere else then I'm happy to move it.
I really don't understand the tax implication etc... but I haven't made any money so I don't think it will be a big issue.
I really need to get an accountant though.

It started off as $15,000, but is down to $7,500 or so...

Anyway, I appreciate any and all help.

Oh. What are your thoughts on managed funds V's Passive funds??

I know about ETF's, but are there passive funds I can invest in?
What are your thoughts on these?

You wont have tax to pay on a loss. Tax is paid on a profit, so if you did close these loss positions, no tax is paid.

This is why its important to dollar cost average your entry into the market with regular monthly contributions.

I'm sorry your investing experience has started with such a loss... but we all have been caught with our pants down

But things are cheap now, and the long term investor shouldn't be concerned about short term price increases or drops. When the price goes down, you buy more units with your $.

If you want to be safer, invest into a non-geared Australian share fund which invests mostly in top 200 aussie companies.

If your not confident in fund selection, choose one of those netwealth (or other brand) multi sector funds.

But I'm glad to see the recent losses have not scared you off, these will be valuable lessons you will learn, as have I!!

Vanguard index funds are passive - operate just like the index tracking ETFs, just using a unit trust structure rather than an exchange traded share structure.

Great. Thanks again everyone.

I like the idea of using index funds for some reason.
But I also like the look of the netwealth facility.

More decisions to make I guess...

If you feel comfortable with index funds, go for it!

I prefer to choose a fund which has a longer term average return above the index..

You need to read the PDS and find something YOUR comfortable.. also look at the netwealth multi-sector funds.. those funds should provide with a smoother ride as they are spread across several sectors. not just 1 'index'.

Have a very close look at the fees - even if you do get in to wholesale funds, the fees with wrap accounts can still be far higher than if you were to just invest directly in some ETFs or passive index funds - you have to be sure the benefits justify the costs.