How many ETFs do I actually need? I’m overwhelmed

Jess (0:00)

I feel like I may have overcomplicated things quite quickly. Like I'm only five months in. I'm up to seven ETFs.

Glen Hare (0:07)

I've seen people come to us with 27, 30, 40 ETFs.

Jess (0:12)

Are you scared I'm going to listen to what you say? Just go straight out and do it.

Glen Hare (0:17)

General advice only, obviously.

Jess (0:18)

Is it normal to over complicate your portfolio at the start?

Glen Hare (0:22)

You can start and end more simply.

Jess (0:28)

Welcome back to Get Started Investing, a show that helps you make the most of your money. I'm Jess and this year I finally started investing after spending years completely avoiding thinking about money.

So naturally, as a beginner, I have plenty of questions about investing. As it turns out, so do you.

Each week, I sit down with an expert to answer them. This time we're tackling how many ETFs do you actually need? I reckon one of the hardest parts of starting to invest can be deciding what to actually buy. Should you choose one diversified all-in-one ETF or build your own portfolio using a few different ETFs? This is something I've actually personally been thinking about because just five months into my investing journey, I've actually ended up with seven ETFs and a stop. I started wondering if I'm actually diversifying or just overcomplicating things. So in this episode, I'm sitting down with Glen Hare from Fox and Hare. We're going to unpack a question from community member Hamish, who wants to know the answer to this as he builds his first ever ETF portfolio. All righty, let's get into it. Thanks so much to MLC for sponsoring this episode and helping us keep all of our content free. Glen, welcome back to Get Started Investing.

Glen Hare (1:29)

Great to be here.

Jess (1:30)

Today, we're talking about something we actually haven't talked about together, which is the investing piece of the puzzle.

Glen Hare (1:36)

All right. A fairly big piece of the puzzle.

Jess (1:39)

But just for context, so when I went on my like Jess Gets Investing journey, you were there right at the start, which is when I like set my first goals.

Glen Hare (1:47)

Solving all your life problems.

Jess (1:48)

Giving me life problems.

I've never planned so much of my life. And then you came back last season and we talked about like how to manage money as a couple, which was interesting, but you and I haven't actually spoke about the investing piece. So we had this question and I'm going to play it for you. And I kind of want this to be the base for our chat.

Hamish (2:08)

Hey, Equity Mates. My name is Hamish and I'm looking to start investing in ETFs.

For my core, I'm looking at broad diversified ETFs. I'm weighing up the global all-in-one ETF, something like BGBL or DHHF, versus a combination of more regional specific ETFs, something like IVV, XUS and VAE that minimises overlaps. I'm looking at understanding the pros and cons of these two different approaches. Thanks, Heaps.

Jess (2:37)

All right. Thanks, Hamish.

So he's basically talking about buying a diversified ETF, a global ETF, or building his own portfolio using regional ETFs. Is that right? Yeah. Now, this question caught my attention. I wanted you to be the person to answer it. Because as I said just before, like you were here when I set all of my goals and everything like that. And then I went off and started.

Glen Hare (3:00)

Started your investing journey.

Jess (3:01)

Started my investing journey. But I do feel like I've had a bit of a break now between recording and I feel like, looking back, I think I've overwhelmed myself a little bit. I feel like I may have overcomplicated things quite quickly. Like I'm only five months in and I'm up to seven ETFs and a stock.

Glen Hare (3:20)

Okay. And a stock.

Jess (3:21)

And a stock. I know.

Glen Hare (3:23)

Just a random stock.

Jess (3:25)

No, but I really wanted to use this conversation to chat to you back. So I actually really want to know your views on like what you think a beginner investor should start with. But first of all, is it normal to overcomplicate your portfolio at the start?

Glen Hare (3:38)

Yeah, it is because you obviously want to be doing the right thing. And you listen to something, you read something or one of your mates tells you about something. You're like, oh, I'm not doing that. I need to be doing that. Or that sounds that sounds much better than what I'm doing now. I want some of that.