Thursday, September 29, 2011

Buy the Index

The index will always go up over time in the long run. This holds true for s&p500, sti, klci, hang seng, asx200 and many more.
Why so? Inflation drives costs up and thus revenue of companies goes up. Population is ever increasing, so these companies sells more.
My pick of index to invest in:
- sti
- s&p500
- asx200
For KLCI, i'd prefer to buy individual stocks directly as i'm more familiar with the local companies here.
How does one buy the index? Well you don't, you buy the corresponding ETF *Exchange traded fund. As its name suggests, it trades on the exchange, just like a common stock. However buying these from the local brokerage will incur high commission charges. I gotta get myself a US online brokerage account to buy these ETFs.
Index > ETF
STI > STI ETF
s&p500 > spr
asx200 > spdr s&p/asx 50, ishars-s&p/asx 20 index fund

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