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The board's view on ETF's?
Posted on 7/31/13 at 7:02 am
Posted on 7/31/13 at 7:02 am
I want to add a financial stock to my portfolio but wasn't sure which one to choose. So, I figured I could just invest in a financial ETF such as XLF. Anyone have any pros or cons about investing in ETF's or XLF in particular? Thanks in advance.
2
Posted on 7/31/13 at 8:14 am to Cousin
don't daytrade them, I recently bought my first ETD,DXJ and I sold it 2 days later after i made a nice chunk, and Etrade hit me with an ETF fee for selling it before 30 days.
Posted on 7/31/13 at 8:26 am to ThaBigFella
quote:
don't daytrade them, I recently bought my first ETD,DXJ and I sold it 2 days later after i made a nice chunk, and Etrade hit me with an ETF fee for selling it before 30 days.
Good advice...I planned on buying and holding. You think XLF is a good one to get?
Posted on 7/31/13 at 9:46 am to Cousin
Get a broker account with vanguard buy through them. It doesn't have to be vanguard. Same goes for fidelity, schwab, etc.. I am a fan of vanguard funds however
Posted on 7/31/13 at 11:02 am to Cousin
quote:
You think XLF is a good one to get?
Nope. And I wouldn't recommend a sector specific ETF either.
Posted on 7/31/13 at 11:05 am to Vols&Shaft83
Thanks man
Posted on 7/31/13 at 11:10 am to Vols&Shaft83
quote:
I wouldn't recommend a sector specific ETF either.
elaborate on reasoning for the uneducated but interested masses?
Posted on 7/31/13 at 11:15 am to TigerFanatic99
You will be hit with what is called decay. Over the long haul a lot of those leveraged ETFs will lose value regardless of what the sector it is supposed to be tracking is doing.
Posted on 7/31/13 at 11:16 am to Cousin
Can anyone speak about the advantages of ETF's over mutual funds i.e. vanguard index funds, if any, for a buy and hold/not trading portfolio. And is "decay" only present of the double/triple leveraged ETF's and reverse ETF's or what? Basically looking to piggyback off this thread to learn more.
This post was edited on 7/31/13 at 11:20 am
Posted on 7/31/13 at 11:27 am to Ric Flair
I can /end thread here.
On ETFs vs. Mutal Funds:
Balance ETFs with actively managed mutual funds and potentially a few individual stocks (given you have done your homework. This will bring your overall expenses down while attempting to place investments with funds who beat the market.
On sector specific ETFs:
- Most individual sectors underperform the overall market by themselves, so this is not wise. And if you rebuttal by saying you rotate sectors that will outperform, then you are a fool and you have no idea that you are. Timing and sector rotation are a sure way to screw up, eventually.
On ETFs vs. Mutal Funds:
Balance ETFs with actively managed mutual funds and potentially a few individual stocks (given you have done your homework. This will bring your overall expenses down while attempting to place investments with funds who beat the market.
On sector specific ETFs:
- Most individual sectors underperform the overall market by themselves, so this is not wise. And if you rebuttal by saying you rotate sectors that will outperform, then you are a fool and you have no idea that you are. Timing and sector rotation are a sure way to screw up, eventually.
Posted on 7/31/13 at 12:21 pm to Cmlsu5618
Some ETF funds are mirror images of mutual funds - VDAIX and VIG for example. Lower expenses on the ETF.
I have >dozen mutual funds, and one ETF - XLP (consumer staples). I would have bought the financials, but already had several banks as individual stocks.
I have >dozen mutual funds, and one ETF - XLP (consumer staples). I would have bought the financials, but already had several banks as individual stocks.
Posted on 7/31/13 at 12:27 pm to matthew25
Do EFT's reinvest dividends like a vanguard mutual fund?
Posted on 7/31/13 at 1:09 pm to Ric Flair
quote:
Do EFT's reinvest dividends
I beleive a DRIP (dividend reinvestment) program is up to the holding institution. I can reinvest with my accounts at Merrill Edge.
Posted on 7/31/13 at 2:10 pm to Ric Flair
quote:
Do EFT's reinvest dividends like a vanguard mutual fund?
Sometimes, when I DRIP'd some ETF index funds I had to buy directly from the originator and make clear up front that I intended to reinvest the dividends.
Posted on 7/31/13 at 2:43 pm to matthew25
quote:
Some ETF funds are mirror images of mutual funds - VDAIX and VIG for example. Lower expenses on the ETF.
This is correct.
Be advised though that if you are doing this through a 401(k) your plan administrator will almost always not allow the ETF. For some reason they are afraid you will day trade.
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