In this happy project, we like you to try out buying ETFs. It is so satisfying to be part of something big, and so, perfectly suites as a happy project.

We are sure that you heard the saying, “Money can’t buy happiness”? While it’s true that material possessions alone can’t bring true joy, having financial stability and security can certainly contribute to overall happiness and peace of mind. One way to work towards happiness can be, financial stability and therefore by investing for example in exchange-traded funds, or ETFs.

What is an ETF?

First, let’s define what an ETF is. An ETF, or exchange-traded fund, is a type of investment vehicle that tracks the performance of a particular market index, commodity, bond, or basket of assets. ETFs are traded on stock exchanges. For example, the NYSE on the Wall Street.  ETFs are traded just like stocks, and they offer investors a way to diversify their portfolio and access a wide range of assets in a single investment. Consequently, an ETF is a type of investment fund that holds a collection of stocks, bonds, or other assets, and is traded on an exchange like a stock. Just imagine ETFs as a big basket filled with many stocks. So instead of buying stocks individually, you buy when you order an EFT, this ready-made collection. So, ETFs offer a simple and affordable way to diversify your investment portfolio, as they allow you to own a piece of many different companies or assets at once.

Why might buying ETFs make you happy?

1. ETFs can help you save for the future: By investing in ETFs, you can set aside money for your future goals, such as retirement or your children’s education. This can bring peace of mind, knowing that you are working towards a secure financial future.

2. ETFs can offer long-term growth: Many ETFs are designed to track the performance of a particular market index, such as the S&P 500. Over time, the stock market has historically provided strong returns, which can help your investment grow. Seeing your investment grow can bring a sense of accomplishment and happiness.

3. ETFs are convenient and easy to buy: ETFs can be purchased through a brokerage account, just like stocks. This means you can easily buy and sell ETFs online, making the process of investing convenient and accessible.

4. ETFs are affordable: ETFs often have lower expense ratios compared to actively-managed mutual funds, which means you pay less in fees. This can help you keep more of your investment returns, which can bring a sense of satisfaction and happiness.

Where to start?

So if you intend buying an ETF or stocks, or any other stock exchange traded financial product, you need a depot. Due to cost efficiency, we can advise you to get a depot via an online broker. Online broker are relatively cost-effective and will provide you all the infrastructure you need to get your first ETF. If you get more serious, you still can get a depot from your bank.

The big one, the MSCI World ETF

Coming back to the ETFs, have you heard of the MSCI World ETF? It’s a popular investment option that tracks the performance of the MSCI World Index, which is a benchmark index that measures the stock market performance of 23 developed countries. If you’re looking to get a broad and diverse exposure to the global stock market, this ETF could be a great choice for you.

One of the main benefits of investing in the MSCI World ETF is the diversification it offers. The fund holds a diverse portfolio of stocks from various sectors and industries, so you’ll be getting exposure to a wide range of companies from developed markets all over the world. This can help to reduce risk and potentially improve the overall performance of your portfolio.

Another great thing about the MSCI World ETF is that it’s easy to invest in. It’s traded on stock exchanges like regular stocks, so you can buy and sell shares just like you would with any other investment. And because it’s an ETF, you’ll get all the benefits of professional management without the high fees that often come with actively managed funds.

All in all, we can say, the MSCI World ETF is a solid choice for investors looking to gain broad exposure to the global stock market and diversify their portfolio. So if you’re interested in this investment option, it’s worth considering adding it to your portfolio.

Check out the details

Apart from the MSCI World ETF which is somewhat weighted with respect to the amount of US companies it includes, you might want to check out other ETFs, such as the STOXX 600 ETF, or an emerging markets ETF to rebalance that bias.

Probably the most well-known companies that manage, and sell ETFs include Ishares, Xtrackers or Amundi.  Unfortunately, ETFs are not 100 percent free. There is a fee that the companies charge, for managing the ETFs. This fee is the so-called TER (Total Expanse Ratio). The TER ratio should be below 0.2 at least for the “big” ETFs, such as the core MSCI World ETF. For any further information, check out justETF.com for an overview of all listed ETFs. There you will find The best ETFs.

Apart from the costs of the ETF, you have to decide if you want that the ETF is distributing dividends or reinvesting the dividends to buy new stocks, which is up to you. There is somewhat of a huge debate on this topic, so we leave this up to you. In addition, we think that buying an ETF, where the ETF is actually backed up by real shares of the individual companies i.e. physically backed, feels somewhat safer than a synthetically generated ETF. However, this is just our personal opinion.

… some final thoughts