| What is your view on ETFs? |
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| What is your view on ETFs? |
| Don't have any experince |
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16% |
[ 1 ] |
| Have experience and like ETFs |
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33% |
[ 2 ] |
| Would stay away from them |
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16% |
[ 1 ] |
| Don't know or don't care |
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33% |
[ 2 ] |
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| Total Votes : 6 |
JBendar
Senior Member
Cash: $ 49.60
Posts: 271
Joined: 22 Mar 2004
Location: Woodbridge, New Jersey
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| What is your view on ETFs? |
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This is a survey to find out how many people here have traded or invested in ETFs (Exchange Traded Funds). It would be interesting to see how many people like, dislike, don't know, don't care, etc. My experience with ETFs is with a company called Sharebuilder. I am sure you have seen it advertised on many web sites. The purpose of Sharebuilder is to give the investor with limited resources the capacity to become involved with stocks (as well as ETFs). Currently part of my portfolio is with the SPDRs and QQQQs. SPDRs are the symbol for the S&P 500 Index and the QQQQs are the symbol for the NASDAQ 100 Index. Thank you for participating.
JBendar
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Sun Mar 12, 2006 2:54 am |
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Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
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I love ETFs
I wasn't impressed with sharebuilder and actually moved to tradeking. Tradeking has a promo now if you register and make at least one trade one trade before the 15th of next month and keep 1k in your account, they'll give you 100 dollars.
They are 4.95 to buy and sell, which I know sharebuilder is 4 dollars if you do automatic buying, but they buy them only on tuesdays and they will always charge you the absolute highest price for that day. Second you can't buy on margin, stop loss...etc, but you can with Tradeking.
They are pretty new in the game, so most people haven't heard of them.
I shift my outside of retirement investments every now and then, but I'm not a day trader and most of my paper assets are now in ETFs. I have some buy and hold that I don't look at really often with a GTC policy of up to a year and then some that you'll see me buying and selling throught the year. I would never do this with a retirement account though.
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Sun Mar 12, 2006 3:18 am |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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quote:
Originally posted by Jaszbo
I love ETFs...I'm not a day trader and most of my paper assets are now in ETFs.
Then why do you pay more for stuff catered towards active-traders? I don't get it... 
I would use ETFs strictly for mechanical trading...but there are likely better equities for that....so I don't see any purpose for ETFs at all.
I am limited to index funds in my 403(b) and I hate it...lags behind my regular mutual funds by ~40% and utterly pitiful compared to my stock returns (again, why buy ETFs when you can buy real stocks?)
"Expect me when you see me."
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Sun Mar 12, 2006 3:47 am |
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Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
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why not post your single fund you are reffering to that's laggin 40% to an index fund? Let me see with my own eyes the great managers who have been able to do this for 10 years.
Rolo, I believe coaster has posted www.etfconnect.com that can get you started in reasons to go with ETFs. For some people index funds might be better.
To give you one example, say today I am a personw who has 5,000 dollars and I want to invest in index funds. Well the average index fund costs 2,500 to get into and the least expensive index funds I've seen require 1,000 dollars. Say you want 10 different index funds, you want USA, REIT, Spain, Brazil, EAF, China, Japan...etc
ETFS you can get in with hardly any money. It's just one reason, read and you'll educate yourself, just like a Roth IRA
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Sun Mar 12, 2006 2:30 pm |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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quote:
Originally posted by Jaszbo
why not post your single fund you are reffering to that's laggin 40% to an index fund?
I regularly post my holdings in an effort to continuously improve them:
http://www.money-talk.org/viewtopic.php?p=24953
quote:
Originally posted by Jaszbo
Rolo, I believe coaster has posted www.etfconnect.com that can get you started in reasons to go with ETFs.
Why would I pay more fees to get inferior returns?
quote:
Originally posted by Jaszbo
For some people index funds might be better.
I agree with that statement and have stated the same thing:
http://www.money-talk.org/viewtopic.php?p=27543#27543
However, I do not agree with your assertion that, unless you are in the top-20% of degree-holding investment professionals, you should only invest in index funds.
quote:
Originally posted by Jaszbo
To give you one example, say today I am a personw who has 5,000 dollars...10 different index funds, you want USA, REIT, Spain, Brazil, EAF, China, Japan...etc
Only a fool would do that with $5K. The fool would work more and earn far less than any reasonable and prudent investor. Again, you make arguments based on scenarios that would never happen (or should never happen).
The only purpose for an ETF is timing. The original poster having an avatar of a 5-year candlestick of an ETF/market index quantifies my point a bit!
"Expect me when you see me."
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Sun Mar 12, 2006 3:29 pm |
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Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
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Rolo I don't have a single clue why you post things that are not correct or you just simply like to argue.
Please read more about ETFs if you are going to comment about them as if you really know what your talking about. There are things you can do with ETFs that you cannot do with index funds, but instead of me going on and on, why don't you please read about ETFs and if you have questions then ask, instead of just arguing. You only argue, you never ask questions and your position is that you know everything there is to know and that you are always right.
I am no here to convince you or anybody about ETFs as I am not even the person who started this thread.
“However, I do not agree with your assertion that, unless you are in the top-20% of degree-holding investment professionals, you should only invest in index funds.”
Please Rolo we’re talking about ETFs, not index versus managed.
Yes, you can use ETFs in timing of course you can. But your take is that ETFs are only used in one situation and one situation only.
Since I’m certain you don’t read much, I’ll post a single link to get you started
http://finance.yahoo.com/etf/education/10
This compares the return from having an index fund versus an ETF. As you can see the return for the index fund is superior to the ETFs. Yet this scenario takes the assumption of $10 commissions, yet you can invest in ETFs with $4 commission, therefore the return is a little bit closer. Second the return is based on having $10,000 invested with an index funds, most index funds in general require you to have $2,500 and most of them will charge you an annual fee for being below $10,000 dollars. For instance if you want to invest in Vanguard’s S&P500 it would require $3,000 dollars to start and if you were below $10,000 dollars you’ll be charged an additional $10 dollars. As hopefully you already know ETFs carry a lower expense ratio also.
The comparisons are also done on a monthly base; in general biweekly and monthly investments in an index fund do slightly out perform ETFs. There have been studies I’ve seen that show that buying ETFs quarterly do out perform index funds, because the commission is much lower.
I do not find the day trading ability of ETFs as a benefit, but some due. My take on it is that I would rather have the capability than not, even if I don’t exercise the option.
Also there’s ETFs that track certain sectors that they do not have for index funds. Therefore this alone could be one reason to get into ETFs.
You can use multiple techniques with ETFs that you cannot do with index funds. Basically everything you can do with a stock, so hopefully I don’t have to list everything.
I am not saying that ETFs are better than index funds or since you decided to bring managed funds into the discussion. Remember this is a discussion, but you want to make it into an argument.
Even vanguard who’s know for buy and hold used to come down on ETFs and Bogle made a comment that anything that encourages trading is bad for the investor. I’ve seen that vanguard is now one of the biggest players to jump into the ETFs bandwagon. Just last year they put up 22 new ETFs.
ETFs are not for everybody, but you can do things to limit your losses, more diversification with less money, get started with less money and the tax benefits.
One last thing:
“I am limited to index funds in my 403(b) and I hate it...lags behind my regular mutual funds by ~40% and utterly pitiful compared to my stock returns (again, why buy ETFs when you can buy real stocks?)”
I first assumed you were talking about a single fund, but my assumption is that you are not. Second you know better than to say you can consistently beat the market by 40% consistently. If you are referring to one year, there are index funds that had a return of close to 90% last year. Actually one of my ETFs has returned around 65% for the past 3 years, but I know better in the long run.
Your question “why buy ETFs when you can buy real stocks?”
You should know the difference between index funds and stocks, so I’m not sure why you are even asking this question. Your question should be why buy ETFs when you can buy index funds, which is a legit question. Because the same argument for ETFs, you could have written “why buy mutual funds when you can buy stock”.
I’m not sure why you are here Rolo, but I’m here to learn and if you disagree there’s a way to disagree, if I make a mistake or if I’m incorrect, please tell me so, but there’s also a nice way of doing it. You argue about things in a rude manner and time after time when I prove that you stated something incorrectly, you just ignore it or wait for another post to start arguing. I feel it’s very childish and it’s not the reason I came here. We never stop learning and I do have a lot to learn about investing as you can always learn something new about the market or a way of investing and these boards are made for discussion. I feel you are upset, because I stated facts in the past when you stated something incorrectly. There are those new investors who really don’t know as much and when you post something incorrect, I feel I should what was incorrect. I expect the same, because I’m here to learn and if I feel I know something and it’s incorrect, I want to be educated about it.
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Mon Mar 13, 2006 1:01 am |
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Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
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quote:
Originally posted by Jaszbo
You only argue, you never ask questions
Ohmigawd...are you going to throw a frying pan at me or something?
I've asked you plenty of questions that you ignore and you go the self-righteous indignation route. Quit projecting.
quote:
Originally posted by Jaszbo
You only argue, you never ask questions and your position is that you know everything there is to know and that you are always right.
...Since I’m certain you don’t read much, I’ll post a single link to get you started
You do this regularly, yet you accuse me of making personal attacks..?
Fine, gloves off. You can refer me to all the web sites you want and you can accuse me of whatever you wish...
...so long as you accuse me of kicking your ass in investment returns. 25% in 2003 you did? You didn't even beat the ETFs you are talking about! (S&P did 28%; Wilshire 5000, 31%; Wilshire 4500, 42%; and I did 75%)
You spew a lot of words, but I still have yet to find any value in them.
quote:
Originally posted by Jaszbo
There are things you can do with ETFs that you cannot do with index funds, but instead of me going on and on, why don't you please read about ETFs and if you have questions then ask, instead of just arguing.
Okay, other than timing, what CAN you do with ETFs? I've been asking that question since the beginning and you have yet to answer it. You link to a site and explain what I have already stated: ETFs are more expensive than their respective index funds. You quantify MY statements, not yours!
quote:
Originally posted by Jaszbo
I am no here to convince you or anybody about ETFs as I am not even the person who started this thread.
No, but you are a staunch advocate of ETFs with an inability to explain why.
You condemn market-timing, yet illustrate that ETFs are great for timing (which you don't do):
quote:
Originally posted by Jaszbo
Yes, you can use ETFs in timing of course you can. But your take is that ETFs are only used in one situation and one situation only.
...
I do not find the day trading ability of ETFs as a benefit, but some due. My take on it is that I would rather have the capability than not, even if I don’t exercise the option.
...
You can use multiple techniques with ETFs that you cannot do with index funds. Basically everything you can do with a stock, so hopefully I don’t have to list everything.
Yes, actually, you do. I mean, since I don't read much and all, you need to explain it to me because I can only see payng MORE for an index fund via ETF (which you have proven) is to time it (which you do not do). I cannot fathom any other reason for owning ETFs as standard practise. Obviously you cannot explain it to me or you would have done so in order to shut me the hell up...but instead, you avoid the question and get insulting. You are right, you do have a lot to learn; now act like it.
quote:
Originally posted by Jaszbo
Please Rolo we’re talking about ETFs, not index versus managed.
I am talking about ETFs versus ALL other funds: index and managed.
quote:
Originally posted by Jaszbo
Also there’s ETFs that track certain sectors that they do not have for index funds. Therefore this alone could be one reason to get into ETFs.
That is certainly true, like coaster mentioned EEM...but that is the exception rather than the rule.
quote:
Originally posted by Jaszbo
ETFs are not for everybody, but you can do things to limit your losses,
That is called "timing" and you can limit your losses with any fund; that is not unique to ETFs.
quote:
Originally posted by Jaszbo
more diversification with less money, get started with less money and the tax benefits.
Again, not unique to ETFs. You cite a handful of funds for your argument as examples. There are thousands of funds that do not require/charge you for amounts <$10K. All of my minimums are $500 or less and I never pay fees.
quote:
Originally posted by Jaszbo
Second you know better than to say you can consistently beat the market by 40% consistently.
HEL-LO! Yes, consistently, I have consistently been saying I consistently beat the market, consistently. The reason I am here is to ensure that I continue to consistently beat the market, consistently, and consistently remain consistent.
NOTES:
1. In this instance, 40% means my returns are 40% more than my index funds' returns. (1.40 times index fund returns, i.e. 1.4 * ~18% = ~25%, NOT 18% + 40% = 58%)
2. These are my mutual funds only
3. 18% is the annualised return of my TSP account since share prices released
quote:
Originally posted by Jaszbo
time after time when I prove that you stated something incorrectly, you just ignore it or wait for another post to start arguing.
Oh? Show me where I have done that and I will correct it and apologise. Otherwise, retract your statement and apologise.
All this could have been avoided if you just answered my question about why ETFs instead of tapdancing, "I’m certain you don’t read much...There are things you can do with ETFs that you cannot do with index funds, but instead of me going on and on, why don't you please read about ETFs and if you have questions then ask" How pathetic.
"Expect me when you see me."
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Mon Mar 13, 2006 11:06 pm |
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Jaszbo
Preferred Member
Cash: $ 35.90
Posts: 177
Joined: 03 Jan 2006
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Ok, I will explain it to you. I just figure something you just get.
You have 90,000 to invest in the total stockmarket index, where do you go? If you didn't say an ETF then you need help. Please do your research. ETFs for large sums have a lower operating expense and the 4 dollar commision will not do a thing to 90,000 dollars.
Please start reading, because without a question of a doubt you always say thing you really don't know what your talking about. Just pick up morningstar's ETF 100 and read the seciton of why to invest in ETFs, because you are clueless.
Ok, let's talk about your great great great funds that in the long turn have been beating the market. When people refer to beating the market or an index, they aren't reffering to a mutual fund that just selects a bunch of stocks and bonds and have their own allocation. It refers to REIT index beating an REIT managed fund. I am not saying that a certain market cannot be beat, but it's harder. There's some excellent managed funds at T. Rowe Price for instance.
let me just type what morningstar has to say about ETFs
"Vanguard Large Cap Vipers still have lower annual expense ratios than any large blend fund (exchange-trade or not) that retail investors with less than $100,000 in assets can buy" by Dan Culloton. Please, do you understand this or not?
I gave you a case about a person who doesn't have much money and now a reason if somebody who has a lot of money, but less than $100,000 to spend in one purchase.
If I have not explained something to you in the past, please let me know as I do not try to avoid any questions.
I sometimes feel like I'm dealing with a person who just wants to argue.
I really don't know what you even mean by 40%, but I just want to drop it, because it's a silly argument. The S&P500 is the index most people refer to, but there's a lot of other indexes that in the long run beat the S&P500. So when you are refering to 40%, 40% above what?
"..so long as you accuse me of kicking your ass in investment returns. 25% in 2003 you did? You didn't even beat the ETFs you are talking about! (S&P did 28%; Wilshire 5000, 31%; Wilshire 4500, 42%; and I did 75%) "
Listen the 25% I'm talking about is in my Roth IRA. Are you just going back to old posts to prove some point that has no merrit? I've only listed 3 funds from 50% of my ETF that 2 of them I keep for the long term and the REIT I watch when it's over valued you put a trailing loss on it. Then I generally purchase another ETFs that I believe is under valued, I wouldn't even think for a second to do this for my retirement account as the odds are against me in the long run.
If you understand the way I invest is this, if I loose some money in my investments outside of my retirement, it's my risk I took. I don't buy an ETFs bonds at all. I put 100% into stocks, but I would never do that at my age for a retirement account.
Well let's talk about your 40%, is that 40% above the S&P500, becuase it seems what ever you post you work your way around words later. I just want to be very clear at what your saying. You are telling me that for instance if the S&P500 has returned say for the past 20 years 10%, you have made 14%?
Well actually let me take it back, please don't respond...haha I just dont care. Since 1926 the small cap value index has beaten the S&P500 by 4% and it's done it about 86% of the time. Therefore I could have just purchased one single fund and matched your returns and just watched tv throughout the years and yes consistently. I would never advise somebody to do that, but I would never advise what you do either, but returns are returns. A person could get the same returns without all the jumping and without a manager picking the right one. By the way you have heard of the Wall street's journal of a blind folded monkey that does better than most proffesional mangers at picking stocks.
Let me tell you the Roth portfolio that I use is 60% into stocks and 40% bonds. Yes some years it doesn't do as hot and yes some years it does good. For the past 15 years it's only been negative one year and it was only around negative 4% or 5%.
Let me ask you a question Rolo, if you were in charge of the pension plan in any given state what would you do? Remember you need the highest return with the lowest risk. You are in charge of say thousands of people, and you can't have a down year. Would U.S. Global Investors Gold Shares (USERX) be ok?
1996 = -26%
1997 = - 57%
1998 = -33%
1999 = -3%
2000 = -30%
remember these are all negatives, but that's right you would time it and get out just at the right now. Yet for instance the S&P500 in 1990 in a 3 month period accounted for a negative 21% of the entire year. What if you are on a trip, what would you do?
The reason I say this is that it reminds me of the tech bubble. Were you investing then, because the same people were soooooooooooo happy about their tech stock or tech funds and how good they were doing. Then in the crash they were the ones crying and running from the market and thinkign real estate is the only safe investment.
Have you also ever looked at the highest returns for any year. If you want look at performance and see the highest performers of last year, highest of 5 years, highest of 10 years. You noticed none of the ones that are on the highest for the 1 year are on the 10 year. The lesson of performance chasing seems to just go out one year
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Fri Mar 17, 2006 4:10 am |
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