"Sooner or later, those who win are those who think they can."Paul Tournier
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A Sucker Born Every Minute
An article about choosing safe investments. First published in our client newsletter “The Balanced Report” Spring 1993This old adage should really be rephrased as "There is a sucker born every minute and two to take him". In our work we are constantly ...
How to Maximize Your 401k Mutual Fund Returns
When it comes to 401k's there is an overabundance of sad stories. Here is one that at least has a happy ending-and it's getting happier all the time. Last year (in 2002) a friend of mine-let's call him Jack-phoned and asked if I could ...
Morningstar Mutual Fund Fiduciary Grades: What Investors Need to Know
Morningstar now provides Fiduciary Grades on mutual funds. How does Morningstar determine these grades? How can mutual fund investors use these grades to better manage their portfolios? Mutual fund investors use Morningstar Rating™ as a sign post of ...
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I have been dealing with the brokerage industry for over 10 years and during that period I have found many instances that mutual funds were excellent recommendations for clients. Those days are essentially over. I know you are aware of ETF's. These are exchange traded funds. The advantage of ETF's over mutual funds is clear to me. I am sure there is someone who sells mutual funds who would disagree.
By far the single most important feature of mutual funds is that the investor receives immediate diversification even with a smaller capital base. This is also available with a selection of ETF's. In the days when commissions were in the hundreds of dollars per transaction, there could be an argument for long term lower commissions. Clearly that no longer exists. The fees for management in mutual funds are too high relative to performance that only rarely would exceed the market or sector. ETF's have dramatically lower fees. The fact that mutual funds are bought or sold only after the market close is one of the most significant differences between mutual funds and ETF's. ETF's are sold real time during market hours as the investor chooses. In a declining market you can switch your mutual funds into cash. In ETF's you can do that but you also can short them giving you the opportunity to capitalize on the market decline.
ETF's are new and a reasonable amount of education is important. You can search for ETF and you will find hundreds of sites. You can create your own asset allocation with ETF's that you have an instantaneously revise.
About the author:
The Stocks2Watch® newsletter has been published since 1998.
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8 Stocks Soaring on Big VolumeTheStreet.com(Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Many times when above average volume moves into equity it precedes a large spike in ...and more » |
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