Learn about ETFs and mutual funds
Listener question – Are ETFs or mutual funds better?
What they are:
Trades like a stock, continuously priced throughout the day
Broad index or sector
Long or short
Funds pooled together
Priced at the end of the day
Decisions made for you
Only know what stocks are in it quarterly
Don’t need a brokerage account, can go direct to the fund
Can cause unwanted capital gains
Manager is paid to beat the indexes, but they don’t always accomplish it.
Can invest regular deductions from your bank account ie. $25/mo.
Question is which one will provide better performance?
Use ETF’s for indexes.
Use mutual funds for good manager’s track record.
Asset allocation model – core + satellite, creating a combination portfolio