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lilredrooster
lilredrooster
Joined: May 8, 2015
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April 13th, 2022 at 7:49:35 AM permalink
Quote: Ace2



You invest in mutual funds? That's almost like playing 6:5 blackjack when there's a 3:2 table right next to it.
link to original post




I believe that is a very wrong and misleading statement

mutual funds can invest in several hundred stocks - the idea is to spread the risk

if you can beat the wiseguys trading stocks - more power to you - I don't even want to try

your capital gains obligations will be much greater - and the tax bill for short term capital gains is much more than for long term capital gains

the capital gains obligations on the funds that I've held have been close to zero


.
"𝘣𝘦𝘭𝘪𝘦𝘷𝘦 𝘩𝘢𝘭𝘧 𝘰𝘧 𝘸𝘩𝘢𝘵 𝘺𝘰𝘶 𝘴𝘦𝘦 𝘢𝘯𝘥 𝘯𝘰𝘯𝘦 𝘰𝘧 𝘸𝘩𝘢𝘵 𝘺𝘰𝘶 𝘩𝘦𝘢𝘳"______Edgar Allan Poe
billryan
billryan
Joined: Nov 2, 2009
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Thanks for this post from:
Johnzimbo
April 13th, 2022 at 8:49:29 AM permalink
Quote: lilredrooster

Quote: Ace2



You invest in mutual funds? That's almost like playing 6:5 blackjack when there's a 3:2 table right next to it.
link to original post




I believe that is a very wrong and misleading statement

mutual funds can invest in several hundred stocks - the idea is to spread the risk

if you can beat the wiseguys trading stocks - more power to you - I don't even want to try

your capital gains obligations will be much greater - and the tax bill for short term capital gains is much more than for long term capital gains

the capital gains obligations on the funds that I've held have been close to zero


.
link to original post




I think they are saying mutual funds are bad compared to ETFs. In general, ETFs are more nimble, have fewer fees, and do a better job of avoiding Capital Gains. While investing in mutual funds is certainly better than getting kicked in the head, for most people ETFs are better.
Of cause, many people don't understand the differences between the two and may not be certain what they actually have invested in.
Given a choice between not investing and investing in a mutual fund, the correct choice is clear. When it comes to choosing between mutual funds and ETFs, the choice is less clear to most people, although the ETFs are usually the right answer. The problem is that when something has worked for you in the past and produced decent returns, it is hard to recognize you are losing out on money on an investment you think is doing well.
The difference between fiction and reality is that fiction is supposed to make sense.
ThatDonGuy
ThatDonGuy
Joined: Jun 22, 2011
  • Threads: 110
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April 13th, 2022 at 8:58:25 AM permalink
Quote: billryan

Quote: lilredrooster

Quote: Ace2



You invest in mutual funds? That's almost like playing 6:5 blackjack when there's a 3:2 table right next to it.
link to original post




I believe that is a very wrong and misleading statement

mutual funds can invest in several hundred stocks - the idea is to spread the risk

if you can beat the wiseguys trading stocks - more power to you - I don't even want to try

your capital gains obligations will be much greater - and the tax bill for short term capital gains is much more than for long term capital gains

the capital gains obligations on the funds that I've held have been close to zero


.
link to original post




I think they are saying mutual funds are bad compared to ETFs. In general, ETFs are more nimble, have fewer fees, and do a better job of avoiding Capital Gains. While investing in mutual funds is certainly better than getting kicked in the head, for most people ETFs are better.
Of cause, many people don't understand the differences between the two and may not be certain what they actually have invested in.
Given a choice between not investing and investing in a mutual fund, the correct choice is clear. When it comes to choosing between mutual funds and ETFs, the choice is less clear to most people, although the ETFs are usually the right answer. The problem is that when something has worked for you in the past and produced decent returns, it is hard to recognize you are losing out on money on an investment you think is doing well.
link to original post


Any ETFs that the market boffins here recommend?
unJon
unJon
Joined: Jul 1, 2018
  • Threads: 14
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April 13th, 2022 at 9:04:59 AM permalink
Quote: ThatDonGuy

Quote: billryan

Quote: lilredrooster

Quote: Ace2



You invest in mutual funds? That's almost like playing 6:5 blackjack when there's a 3:2 table right next to it.
link to original post




I believe that is a very wrong and misleading statement

mutual funds can invest in several hundred stocks - the idea is to spread the risk

if you can beat the wiseguys trading stocks - more power to you - I don't even want to try

your capital gains obligations will be much greater - and the tax bill for short term capital gains is much more than for long term capital gains

the capital gains obligations on the funds that I've held have been close to zero


.
link to original post




I think they are saying mutual funds are bad compared to ETFs. In general, ETFs are more nimble, have fewer fees, and do a better job of avoiding Capital Gains. While investing in mutual funds is certainly better than getting kicked in the head, for most people ETFs are better.
Of cause, many people don't understand the differences between the two and may not be certain what they actually have invested in.
Given a choice between not investing and investing in a mutual fund, the correct choice is clear. When it comes to choosing between mutual funds and ETFs, the choice is less clear to most people, although the ETFs are usually the right answer. The problem is that when something has worked for you in the past and produced decent returns, it is hard to recognize you are losing out on money on an investment you think is doing well.
link to original post


Any ETFs that the market boffins here recommend?
link to original post



VTI
VXUS
VTV
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
billryan
billryan
Joined: Nov 2, 2009
  • Threads: 217
  • Posts: 13347
April 13th, 2022 at 9:10:29 AM permalink
Quote: ThatDonGuy

Quote: billryan

Quote: lilredrooster

Quote: Ace2



You invest in mutual funds? That's almost like playing 6:5 blackjack when there's a 3:2 table right next to it.
link to original post




I believe that is a very wrong and misleading statement

mutual funds can invest in several hundred stocks - the idea is to spread the risk

if you can beat the wiseguys trading stocks - more power to you - I don't even want to try

your capital gains obligations will be much greater - and the tax bill for short term capital gains is much more than for long term capital gains

the capital gains obligations on the funds that I've held have been close to zero


.
link to original post




I think they are saying mutual funds are bad compared to ETFs. In general, ETFs are more nimble, have fewer fees, and do a better job of avoiding Capital Gains. While investing in mutual funds is certainly better than getting kicked in the head, for most people ETFs are better.
Of cause, many people don't understand the differences between the two and may not be certain what they actually have invested in.
Given a choice between not investing and investing in a mutual fund, the correct choice is clear. When it comes to choosing between mutual funds and ETFs, the choice is less clear to most people, although the ETFs are usually the right answer. The problem is that when something has worked for you in the past and produced decent returns, it is hard to recognize you are losing out on money on an investment you think is doing well.
link to original post


Any ETFs that the market boffins here recommend?
link to original post



I like the ones that do well better than the ones that don't.
A lot of it is circumstantial. For example- I'm 63 and have the money I need to live a nice life. My needs are a steady income and the preservation of my nest egg. Someone else may be forty and invested all their life and is well on their way to financial security, while anothers life savings may be $12,000 in crypto. My recommendation to each would be different.
One person might have $100,000 and only need to make 4% on it to live while another person needs to double that amount quickly.
The difference between fiction and reality is that fiction is supposed to make sense.
TigerWu
TigerWu
Joined: May 23, 2016
  • Threads: 22
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April 13th, 2022 at 9:27:14 AM permalink
Quote: unJon


VTI
VXUS
VTV
link to original post



VTI expense ratio: 0.03%
VXUS expense ratio: 0.07%
VTV expense ratio: 0.04%

Versus similar index/mutual funds:

VFIAX 0.04%
VTSAX 0.04%
VBTLX 0.05%

Broad market index funds aren't really any more expensive that ETFs from a fee perspective. I'm not a big tax wonk so I don't know about comparing them from that aspect.
Ace2
Ace2
Joined: Oct 2, 2017
  • Threads: 28
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April 13th, 2022 at 10:04:09 AM permalink
SPY

Cost of under 0.1% compared to a managed fund charging 1% that cannot beat the S&P long term

When compounded over the long run, that 1% fee makes a big difference. Youíre paying 1% to a fund that is basically guaranteed not to beat the S&P (which you can get for close to free)

90% of my stock holdings is SPY. The other 10% is a few mutual funds I've owned for many years...they are in a taxable account and would generate large capital gains tax if I sold. Otherwise I would convert them to SPY
Last edited by: Ace2 on Apr 13, 2022
Itís all about making that GTA
billryan
billryan
Joined: Nov 2, 2009
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April 13th, 2022 at 10:48:15 AM permalink
Your portfolio shouldn't be trying to beat the S&P. Depending on your age, part of it should be in bonds and other instruments. The closer you get to retiring, the more you want to reduce your exposure to stocks. Having 100% stocks or funds is cool when you are thirty, but foolish when you are sixty.
The difference between fiction and reality is that fiction is supposed to make sense.
Ace2
Ace2
Joined: Oct 2, 2017
  • Threads: 28
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April 13th, 2022 at 11:27:31 AM permalink
Quote: billryan

Your portfolio shouldn't be trying to beat the S&P. Depending on your age, part of it should be in bonds and other instruments. The closer you get to retiring, the more you want to reduce your exposure to stocks. Having 100% stocks or funds is cool when you are thirty, but foolish when you are sixty.
link to original post

Who recommended 100% stocks or funds (at any age)? However, the portion of your portfolio allocated to stocks should probably be measured against (and invested in) a broad index like the S&P
Itís all about making that GTA
billryan
billryan
Joined: Nov 2, 2009
  • Threads: 217
  • Posts: 13347
April 13th, 2022 at 11:54:12 AM permalink
Quote: Ace2

Quote: billryan

Your portfolio shouldn't be trying to beat the S&P. Depending on your age, part of it should be in bonds and other instruments. The closer you get to retiring, the more you want to reduce your exposure to stocks. Having 100% stocks or funds is cool when you are thirty, but foolish when you are sixty.
link to original post

Who recommended 100% stocks or funds (at any age)? However, the portion of your portfolio allocated to stocks should probably be measured against (and invested in) a broad index like the S&P
link to original post



Why?
The difference between fiction and reality is that fiction is supposed to make sense.

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