Showing posts with label ETFs and Mutual Funds. Show all posts
Showing posts with label ETFs and Mutual Funds. Show all posts

Wednesday, December 15, 2010

Markets 12-15-10

Markets have been waffling up recently. Interesting move is the Bond market. Bonds have need dropping over the past couple of weeks and the investment community is trying to understand why. Are rates going up due to economic reasons? If so, the Bernanke QE2 is completely ineffective since rates should have dropped after the Fed moves several weeks ago. Some have suggesting rates Bonds are dropping since investors are selling and going into stocks. This is hard to verify in looking at the data.
Big question is Are we at the start of a steady drop in bond prices and increase in interest rates? While I mentioned a while back that the best investment in the future will be to Short Bonds. However, I still think  it is a bit early for this since we are looking at more downgrades of European countries, which will make US Treasuries the investment of choice, and a number of US States should start hitting the Press as possibly going into default in the future - which would also cause a flight to Treasuries.

Since the Bond Market is fuzzy now, it might be prudent to implementing a Short Bond investment now. Rules prohibit me from making a specific investment recommenation on this site.

Wednesday, October 27, 2010

Annual expenses lower in ETFs vs. Mutual Funds

 Question asked during Adult Ed Investment class tonight.
Question was why are ETF annual expenses lower than mutual fund expenses, even indexed funds.
"Lower costs
Expenses can have a significant impact on returns for investors. ETFs, in general, have significantly lower annual expense ratios than other investment products. ETFs are less likely to experience high management fees because they are index-based, not “actively” managed. And, since they trade on an exchange, ETFs are insulated from the costs of having to buy and sell securities to accommodate shareholder purchases and redemptions".
I took the above excerpt from the articles on my website. You might want to read all the articles since they are fairly comprehensive.
here is the page which has 4 articles on it so scroll down: