Proud Member Of
Random Roger
© 2009 | Gadget Theme Blogger Template
Original WPtheme By Blogger Template | Converted By Gadget Lover
| Distributed by eFree Blogger Help
Original WPtheme By Blogger Template | Converted By Gadget Lover
| Distributed by eFree Blogger Help
18 comments:
I highly doubt we will ever see ETFs available in 401k plans. The 401k providers go to companies and get exclusive deals to only work through them. For me, I can pick funds Fidelity offers or I can not get employer matching and the pretax benefits. Not much of a choice I am afraid :(
Since they have captive customers they will give them access to only the most profitable funds which are generally the mutual funds with higher fees.
Even worse... I've seen a shift in my company's offering, and those of friends that I talk with, that they are moving away from dividend paying mutual funds to more generic non dividend paying funds. Every now and then I get company emails that the 401k plan is changing and fund X is no longer an option and my money is pushed into fund Y. This is a way for the large banks and 401k providers to keep more money for themselves obviously.
OK, I will disagree with you at the risk of being wrong.
If tax considerations are a significant factor in the future and we eventually get a lot of inflation (I feel certain we will eventually get a lot of inflation even if it takes several years to start). Then picking some high dividend ETF's and holding them for life for taxable accounts seems like the right move to me. This way you would avoid capital gains on the inflated increase of all securities.
I do not think this is the right time to start a high dividend etf portfolio for life approach but I do think that time will come.
As far as 401k or IRA plans go, then your standard approach is appropriate and better
anon 5:54,
we are sort of talking about different things I think. I believe you are talking about strategy and I am saying the entire paradigm could be much different.
There was an article in last week's Barron's about liability-driven investing, possibly the next big trend in portfolio planning for retirement. "The key," it said, "is to match your assets with your likely expenses."
Really?
Overly simplified, it argued against a traditional 60/40 mix in favor of one bond-heavy portfolio to deliver a dependable income stream, supplemented with another that blends endowment-style holdings to deliver growth. The strategy has supposedly been sweeping the world of pension fund managers.
Your video today reminded me of how much more sophisticated my own portfolio has become, to the point where an article like that is almost analogous to Ten ETFs for Retirement. It's due in large measure to your open-minded sharing of process and tools, Roger.
Thanks for all you do for us.
thanks for the kind word. i considered writing about the article you mention but it seemed to just be saying have your stocks and bonds in different accounts.
I understand you to say we should drop mutual funds and move to ETF's? It seems to me depending on the asset manager track records for mutual und managers would be more visible than individual maney managers?
I look for a conservative approach that grows money in a sustainable manner. So ETF's now are better vs. a mutual fund managed by a good manager or team approach AKA "Dodge and Cox??
Roger,
Don't know if you saw the show, but the Fast Money guys and gals mentioned the Gold Cross signal 50/200 day cross over. Are you in this camp that 93% of the time this is bullish going forward over a 3 / 6 / 12 months investing period with returns of 6% / 10% / and 19.2 %. Forgive me if i am off on the %, but it was something like that. is this a reliable figure and do you use it when it comes to wading back in?
Thanks,
bwjr
I think that is where the world is headed yes. I also think there are advantages to ETFs like what I stated--the end user being the allocator and manager. Many people were let down by their mutual funds because they had the wrong expectations.
the stats are what they are but guarantee nothing. influential? yes. gospel? no.
Regarding the lack of visiblity on mutual funds, I think you stated that you have removed yourself from reading the retail trade magazines (for good reason). In effect you have removed yourself from the advertorial content of these magazines, which is heavily biased toward mutual funds, since they pay the bills through advertising. I read Kiplinger's to understand what the retail trade believes ( much as you watch CNBC) since I don't watch TV. The retail magazines provide some limited ETF coverage and equity articles, and generic tax articles as well.
Thanks for the Peru ETF review.
Sam
I enjoy the way you use Twitter; it's like an investing stream of consciousness.
Re: the Calpers allocation, the Barron's interview was a little hard for me to follow, but it sounded like they were actually increasing their allocation to private equity. That seems to fly in the face of the cover story on the endowments, who find themselves locked into illiquid investments in that space, among others.
I'm a little surprised that Swensen and El-Erian don't take more heat for the pickle that their former employers find themselves in. Do you think they're at least partially culpable (and maybe timed their exits perfectly?)
thanks for the twitter shout. itry to give a quick description, the link and an opinion oh and the occasional cereal comment which usually focuses on sports.
the simplest answer seems to be that they simply misjudged the liquidity squeeze. Swensen is still at Yale. All these funds rely on a lot of things and in 2008 a lot of things simply didn't work. I don't know if culpable is the right word. it might be the right word but i would hope they learn from this which despite the pain now benefits them in the future.
With an increasingly intrusive government, I believe that there will be fewer choices,not more, available to investors. Freedom, unfortunately, is being used as a dirty word to enhance the victim mentality in large part across-the-board in the U.S.
Is it possible by 2019 we will have the S&P Government-run 500 as an index?
T
Oh c'mon T, I swear, the inability of so many reasonably well-educated Americans to articulate the conceptual distinction between license and liberty -- the ability to do whatever you want and the will to refuse an illegitimate command (can anyone imagine a greater difference, really?) -- never fails to amaze me.
But never mind: Setting aside the assertion of an "increasingly intrusive government" -- presumably as compared to the widespread domestic spying of previous (Republican) administrations and the vast data mining operations of laxly regulated corporations (with relatively untrammeled access to individual consumer information) -- there is a deep principle in ecology that should be kept in mind: Restricting a path does not reduce choice, it increases it, always; but this increase is latent because risk also is increased since taking an alternative, ill-defined path is a creative act.
I have made a considerable amount of money over the past quarter century because most (but alas not all) of the economic and market distortions and oppressive restrictions initiated and supported under Movement-Conservative and Pseudo-Libertarian ideology were predictable but I gladly forgo this pleasure for the far greater pleasure of seeing Americans (at least potentially) become explorers and adventurers again; we were such a saucy crew at one time and I yearn for a last hurrah.
Shorter version: If there is an government-run 500 index you can bet your sweet bippy there will be a Chindia 500 index kicking the pluperfect doggy-doo out of it and an online-brokerage with access to both including a way to play the spread (for a fee of course).
Whatever.
ROFL!
For me, leaving mutual funds for ETFs would be a huge taxable event. I suspect it would be the case for many others as well. As a buy and hold indexer, my major concern is the expense ratio. If Vanguard offered a way to convert open end mutual fund shares to ETFs, then maybe. My new money still flows into mutual funds. I don't think passive mutual funds will be going the way of the dinosaur any time soon. Active funds that you kind of refer to...well people are just wising up that active management detracts from long term returns.
What I have been wondering about is when will the number of ETFs trading on various exchanges exceed the universe of stocks that trade? The industry is filling the demand speculators have created. This too shall pass. Major consolidation will happen someday.
when will etfs out number stocks? there are hundreds of etfs and thousands of mutual funds. what about all those speculators?
Post a Comment