This week’s advisor is Domonic Alafaci, from Collins House Private Wealth. Here’s what he said in response to Danika’s question:

That’s a very good question and it really depends on your relevant personal circumstances, which include your:

• Investment Goals

• Risk Tolerance

• Portfolio Size

• Time Horizon

9 may be ideal or too many depending on the size of your portfolio as Minimum Brokerage costs may work against you. For example a $10 brokerage fee on a $100 transaction means that you will need a 10% return just to break even. That’s assuming you can buy an ETF for $100! However, a $10 brokerage fee on a $1,000 transaction is far more palatable.

Something else to consider is S&P Global’s SPIVA report which demonstrates that owning too many active ETFs may reduce overall portfolio performance as higher costs don’t always mean higher returns. Some active ETFs management fees can be up to 1% pa of your fund value, whereas passive ETFs can cost a fraction of that fee.

As a general rule of thumb, when considering the number of ETFs, you should make sure that your portfolio has the appropriate Asset Allocation, given your Tolerance to Risk. Collins House provides a Free Risk Tolerance Tool which you may want to consider as a starting point.

We’re excited to announce our second book: Don’t Stress, Just Invest

Money is stressful. And the more time you spend on your finances, the more questions that arise. Am I doing enough? Am I saving enough? Investing enough? Will I have enough?

Even after building Equity Mates for the past six years and interviewing hundreds of experts on the podcast, we still ask ourselves these questions all the time.

So we set out to write a book and answer these questions. What we ended up with was an outline of the absolute simplest way to invest and importantly, why we are confident that it was enough.

In Don’t Stress, Just Invest we step through the practical ways you can figure out how much you need to invest, set up an automated investment portfolio, and decide what assets you should invest in.

We’ve written this book for all those people in our lives that want the benefits of investing without dedicating the hours, days or even years it takes to become an investor. Once you’ve read this book and set up your automatic investments you can get on with your life confident that you won’t miss out on the awesome wealth creating power of the stock market.

Don’t Stress, Just Invest is available for pre-order wherever you buy books. And it will be hitting shelves around Australia on the 22nd of August.

We have a star-studded list of advisors waiting to answer your question, so what are you waiting for?

Email [email protected] with your question

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The Rask Value Investor Program with Equity Mates, is Rask’s full online investor training complete with stock market valuation templates, Excel downloads, investing checklists, case studies and hours of HD video.