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If you read this blog regularly then you know I’m a huge proponent of ETF’s or Exchange Traded Funds. It was love at first sight and I’ve been a faithful partner since the days of Y2K.

Back then very few people were familiar with this strange 3 letter acronym, but that has slowly changed over the years; these days many of the personal finance blogs I come across talk openly about the benefits of investing in exchange traded funds.

From my perspective, there is a lot of anecdotal evidence to support the increasing popularity of exchange traded funds but the empirical evidence is undeniable. I think it’s fair to say the cat is out of the bag.

I found this article a few days ago on financial-planning.com and want to share it with you:

Continue Reading “ETF Assets Grew by $187 Billion in 2007″

I’ve written a lot about why I love ETF’s and in the last paragraph of Tuesday’s post I advocated people think about using them to build out their entire investment portfolio.

Now I know there are investors, advisors, market pundits that may have a different opinion on that, but I believe that in the universe of possibilities this is a very viable alternative.

My entire business is built on ETF’s. Well, let me rephrase that, a great majority of the investment portfolios are ETF based. Please remember before putting these portfolios in place I always start with a financial plan. From there, I get all the answers I need to construct a customized investment portfolio, not the other way around.

Continue Reading “3 Ways To Build a Model Investment Portfolio Using ETF’s”

A lot of people don’t know what ETF’s are and sometimes it’s hard for them to wrap their minds around the concept.

For many of my ETF related posts, I often provide a link to a page that gives you a snapshot and a generic definition, but I’m not sure that’s enough.

So I want to go over a few key concepts when it comes to the mechanics behind ETF’s. Much of this will come from my personal experience with fielding ETF based questions.

Continue Reading “ETF’s, Superman and Popularity Contests”

Back on November 20th I wrote a piece called An ETF Tax Swap Idea for the holidays! In that post I talked about avoiding potential mutual fund capital gain distributions and moving into ETF’s.

As a part of that post, I included a link to a page detailing the 2007 capital gains distributions for ING, so as to provide further evidence of what a fund investor can expect.

One thing I did not do in that post was provide any information on the kind of year end distributions you can expect for owning an ETF in 2007.

So I’d like to address that…

Continue Reading “ETF Capital Gains Distributions are Virtually Non Existent”

Many mutual funds distribute their capital gains near the end of the calendar year, typically in November and December.

If you’re a mutual fund shareholder, it’s important to check with your fund family to see whether or not your fund is going to have a capital gains distribution at year’s end; if so on what day it will occur.

Many funds will give you an estimate ahead of time, detailing the size of the distribution. Here’s a link to a page that details the different short and long term capital gains for the fund family ING and when the fund distributions will occur.

As you can see, there’s a huge difference between the total capital gains for the ING Diversified International Fund (.17%) and the ING International Small Cap Fund (7.89%). Do you think it might be important to be aware of something like that if you’re an ING fund holder? I’d say so.

Continue Reading “An ETF Tax Swap Idea for the Holidays!”

I just finished writing a plethora of posts about the different kinds of mutual funds. I also managed to sprinkle in quite a few informative tidbits about ETF’s, as well.

After re-reading a few of them, I realized there’s a lot of information to digest.

I don’t regret writing as much as I did, but I can see how the casual reader might get lost in it all. So I’ve decided to condense the most important points about the different investment options into one post.

Here’s what you can expect to receive from each:

Continue Reading “Breaking down your investment options”

This is a piece I’ve been looking forward to writing for some time. And what does that mean to you? I’m really not too sure, other than it’s probably going to be a longer post than normal, so lets get to it.

But before we start I have to tell you… I’ve never sold a No Load mutual fund in my life so I ask that you bear with me. That’s an inside joke…

I’ve never sold a no load mutual fund because they are NEVER SOLD by financial advisors. I’ll explain why that is and a whole lot more on the list below…

Continue Reading “10 things you need to know about No Load mutual funds”

Well today marks my triumphant return to the blog after a month away from the keys. All I can say is its good to be back and back with a vengeance.

I’ve spent the last few weeks cleaning up the blog and have made significant strides in resolving most of the technical issues that stopped me in my tracks. Like everything else in the universe, Chance favors will continue to evolve over time.

Lets get down to business…

Many posts ago I talked about offering up a series of posts on mutual funds. Well, I’d like to pick it up there. Over the next few days I will be offering a lot of information on the topic, as well as, links to other sites where you can get even more pertinent information.

Continue Reading “A Cost Comparison- The Real Cost of Mutual Funds v ETF’s”

What should an investor do, opt for a passive investment strategy or go with a more aggressive actively managed strategy?

This is a tough question to answer and the debate will rage on and on and on and on. There are alot of powerful interests, with alot of money, on both sides of this debate, both fighting tooth and nail to debunk the other.

For the better part of three decades, from the early 1970’s through the 1990’s, actively traded mutual funds ruled the roost (this was really the only game in town)

Emergence of ETF’s

In the last 10 years the investing landscape has changed dramatically, with stiff competition now coming from ETF’s. Actively managed funds are competing for their livelihood, with ETF’s capturing an ever increasing share of their market. What does that tell you?

Continue Reading “Active Investing v Passive Investing? It’s a secondary decision in my book”

Yesterday one of the things I wrote about was the tax efficiency of ETF’s. Well, I wanted to add a bit more to that today, since I found a compelling little graph that highlights the power behind having tax efficient investments.

The burden of taxes is receiving more attention in recent years, particularly when it comes to the impact of taxes on portfolio performance. This is particularly so, with actively managed funds, where high turnover and potentially greater tax liabilities can really eat into returns. I will talk more to these points during mutual fund week, coming soon. (I wrote a post on the future of US tax rates too)

Continue Reading “Understanding the Tax Efficiency of ETF’s”