Is it wise just buying straight shares or to invest in ETF?
The reason behind the question is I would like to invest in CSL, for that price I am only getting very few shares. On the other hand if I invest in ETF, I get little bit more shares and along with more diversification.
Bit confused in regards to what is the better option? Shares or ETF, mainly when I try to buy expensive (value) shares.
A: There is no right or wrong answer.
It depends on what sort of investor you are, and how much risk you want to take.
If you buy an ETF that tracks the S&P/ASX 200, then you are guaranteed a return that will be the index’s return, less a small amount (effectively the management fee and any tracking error). Nothing more, nothing less. CSL will in effect make up about 6% of your portfolio.
If you want to develop a portfolio of stocks, your return could be significantly higher than the index. If your stock portfolio is poor, the return could be significantly lower. Your holding in CSL could be potentially 0%, up to as a high as 100%. You also have the opportunity to bias the portfolio to income stocks paying franked dividends, or some other criteria.