{"id":3109,"date":"2015-09-29T05:00:39","date_gmt":"2015-09-29T05:00:39","guid":{"rendered":"https:\/\/raizinvest.com.au\/investors\/volkswagen-fuels-market-fears-etfs-remain-the\/"},"modified":"2024-04-04T19:29:29","modified_gmt":"2024-04-04T19:29:29","slug":"volkswagen-fuels-market-fears-etfs-remain-the","status":"publish","type":"post","link":"https:\/\/raizinvest.com.au\/investors\/blog\/volkswagen-fuels-market-fears-etfs-remain-the\/","title":{"rendered":"Volkswagen fuels market fears, ETFs remain the most reliable ride"},"content":{"rendered":"
\"image\"<\/figure>\n

The summary:<\/b><\/p>\n

Last week, controversy surrounded
\nVolkswagen, as it was revealed that the German automobile manufacturer has
\ncheated on emissions testing for their cars. They have defrauded customers,
\nbroken regulators\u2019 rules in a big way, and will face suitably big fines as a
\nresult.<\/p>\n

What effect has this had on the
\nshare price?<\/b><\/p>\n

Since the news was revealed,
\nVolkswagen lost around 1\/3rd<\/sup>\u00a0of
\ntheir market value.<\/p>\n

This story gives us a timely
\nreminder of why\u00a0diversification is key,\u00a0<\/b>and the benefits of
\nbuying into\u00a0ETFs.<\/b><\/p>\n

Imagine your portfolio was made
\nup of\u00a0100%<\/b>\u00a0VW shares. Last week you lost\u00a0~33%\u00a0<\/b>of
\nportfolio value.<\/p>\n

Now imagine if you had some
\ndiversified to 50% VW shares. You\u2019ve just lost ~16.5%. This assumes that nothing
\nelse in your portfolio loses value.<\/p>\n

Now if you had diversified a lot
\nmore (maybe using an ETF), to just 1% VW shares. You only lost ~0.33%. Again
\nthis assumes that none of the other shares that compose the ETF loses (or
\ngains) value.<\/p>\n

It\u2019s a simple example, but it
\nshows the dangers of exposing yourself too much to any one stock. These
\nscandals specific to one company do happen, and companies lose big chunks of
\nvalue regularly. By using ETFs you can give yourself a smaller exposure to a
\nlarge number of companies, eliminating the risk that one bad holding will harm
\nyour hard earned savings.<\/p>\n

Raiz uses 7 different ETFs to
\nconstruct our portfolios for you, read more on ETFs\u00a0here<\/a>, and sign up to Raiz using the
\nlink below.<\/p>\n

https:\/\/www.Raizinvest.com.au<\/a><\/p>\n

 <\/p>\n

\n

 <\/p>\n

Don\u2019t have the Raiz App?<\/h3>\n

Download it for free in the App store or the Webapp below:<\/p>\n

\n
\"download-raiz-app\"<\/a>
Click to download the Raiz app<\/a><\/figcaption><\/figure>\n

 <\/figure>\n

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Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz Invest or Raiz Invest Super.<\/em><\/p>\n

Past return performance of the Raiz products should not be relied on for making a decision to invest in a Raiz product and is not a good predictor of future performance.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The summary: Last week, controversy surrounded Volkswagen, as it was revealed that the German automobile manufacturer has cheated on emissions testing for their cars. They have defrauded customers, broken regulators\u2019 rules in a big way, and will face suitably big fines as a result. What effect has this had on the share price? Since the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[1],"tags":[],"yst_prominent_words":[128,3257,98,351,151,224,245,1155,355,313,97,82,117,166,125,239,136,729,1156,1154]}