The coffeehouse investor is an attractive investment philosophy along he lines of “if you can’t beat them …” The basic principle is to match the market’s returns and not have to spend time sweating the details.
So where do we find index funds in Australia? There’s only a couple of players, ultimately. Vanguard are the 800-lb gorilla of the market, while StreetTracks are offering an alternative called exchange-traded funds (ETFs).
Here’s some links to get going with:
- http://www.streettracks.com.au/ now known as http://www.spdrs.com.au/
At some point I’d like to spreadsheet out the differences between ETFs and funds for varying starting stakes and top up amounts and schedules.
Despite the brevity of this post, this is a very deep topic and a powerful investment philosophy that spares you the constant time and effort managing a direct portfolio. Take a look, it will be good for you to know this exists, even if you have no intention of using it at the moment.
[links updated 3 December 2009, for more on the topic read ‘Conflicting advice’ on the Golden Goose]