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+--- Thread: ETF's & Index Investing (/showthread.php?tid=1475)
ETF's & Index Investing - cannew - 02-02-2016
There is a great boom in ETF Investing and many of the blogs and advisors are pushing Index Investing. What's not to like, for a small fee you get total or at least great diversification. Cover the US, International and Emerging markets with 3 to 5 ETF's. Some of the International ETF's have up to 7500 stocks! Wow!
I'm not one of the converted. I've selected my portfolio of what I consider good\great dividend growth stocks. Bought them over the years, received a growing dividend and have not had to pay even a LOW fee. Why would I want to hold 100, 500, 2000, or 7000 stocks, most of which I know nothing about and wouldn't buy if I did. Why would I want to just follow market returns, my goal was to generate a growing income from my investments. When I looked into many of the etf's there was even a Return of Capital listed as part of the distribution... giving me back my own money?
Do you have any etf's?
RE: ETF's & Index Investing - Caversham - 02-02-2016
I do not understand the recent craze over index investing. The best mutual funds still outperform index funds, even with their higher fees. I still own some of the T Rowe Price mutual funds I held before I began DGI, and they are still significantly outperforming the market.
I do not understand why people would want to own 1000s of companies of which probably more than 1/2 are worthless junk. Even in the SP500, probably 1/2 the companies are worthless junk. I would rather create my own portfolio that:
* contains the highest quality companies in the world
* outperforms the market in the long term
* generates stable income that grows faster than inflation
* has no fees
DGI does all of those things and more.
All of that being said, I own some index funds in my 401k because we are not allowed to purchase individual stocks within it.
RE: ETF's & Index Investing - Dividendsrule - 02-03-2016
http://thefritzblog.com/why-some-etfs-may-blow-up/
RE: ETF's & Index Investing - Kerim - 02-07-2016
(02-02-2016, 11:03 PM)Caversham Wrote: The best mutual funds still outperform index funds, even with their higher fees.
But good luck picking them ahead of time!
RE: ETF's & Index Investing - KenBob - 02-07-2016
Quality, valuation, and weighting are all issues with index investing. I much rather select my own stocks; however, I also recognize that in the long run I will not be able to manage my portfolio and my wife is unwilling to manage the portfolio. Index funds are the best option under those conditions.
I am accumulating a portfolio of individual stocks, but will have to transition to index investing at some point.
RE: ETF's & Index Investing - Concasto - 02-13-2016
There has been much innovation in ETFs over the years. I strongly feel some of these funds should be in every portfolio. Funds like QVAL from Alpha Architect stick to a quantitative strategy that has shown great out performance over time. Meb Faber's funds are also attractive imo.
Great read for all investment philosophies...
http://blog.alphaarchitect.com/2015/08/17/the-sustainable-active-investing-framework-simple-but-not-easy/
RE: ETF's & Index Investing - navyasw02 - 02-13-2016
(02-13-2016, 06:34 PM)Concasto Wrote: There has been much innovation in ETFs over the years. I strongly feel some of these funds should be in every portfolio. Funds like QVAL from Alpha Architect stick to a quantitative strategy that has shown great out performance over time. Meb Faber's funds are also attractive imo.
Great read for all investment philosophies...
http://blog.alphaarchitect.com/2015/08/17/the-sustainable-active-investing-framework-simple-but-not-easy/
Considering QVAL has only been around since late 2014, I highly doubt any performance analysis can be drawn to this point to show that its worth the .79% expense ratio. Since it has only 41 stocks, the average investor could build this portfolio pretty easily with less cost.
RE: ETF's & Index Investing - crimsonghost747 - 02-14-2016
I've always viewed mutual funds/ETFs as a way for those with little interest/knowledge to invest their money. That is not to say that professionals shouldn't or couldn't use them effectively but for me it's always been more of a "I don't know exactly, so I'll pay someone else to make the choices for me" kind of a deal. I started out with mutual funds but let go off them all a few years back.
And I still use ETFs for that purpose, though I don't currently own any.ETFs are what I would consider in sectors/markets where I feel like I don't have enough knowledge. For example, two years ago I was looking at investing into South America. I didn't have the resources or the knowledge to gather a good exposure there on my own (I was only looking to invest $1000 - $2000) so I was planning on using an ETF.
RE: ETF's & Index Investing - rnsmth - 02-14-2016
SCHD is a dividend growth ETF with very low expense ratio, .07%, decent yield and good dividend growth
RE: ETF's & Index Investing - cannew - 02-18-2016
(02-14-2016, 01:57 PM)rnsmth Wrote: SCHD is a dividend growth ETF with very low expense ratio, .07%, decent yield and good dividend growth
Only around since 2011 and if one looks at the disbursements they are up & down. But as long as you like it!
RE: ETF's & Index Investing - rnsmth - 02-18-2016
(02-18-2016, 12:57 PM)cannew Wrote:(02-14-2016, 01:57 PM)rnsmth Wrote: SCHD is a dividend growth ETF with very low expense ratio, .07%, decent yield and good dividend growth
Only around since 2011 and if one looks at the disbursements they are up & down. But as long as you like it!
If one looks at the dividends on an annual basis rather than a quarterly one
2012 .81
2013 .9038
2014 1.0469
2015 1.1466
Steady dividend growth.
RE: ETF's & Index Investing - Concasto - 02-22-2016
(02-13-2016, 07:23 PM)navyasw02 Wrote:(02-13-2016, 06:34 PM)Concasto Wrote: There has been much innovation in ETFs over the years. I strongly feel some of these funds should be in every portfolio. Funds like QVAL from Alpha Architect stick to a quantitative strategy that has shown great out performance over time. Meb Faber's funds are also attractive imo.
Great read for all investment philosophies...
http://blog.alphaarchitect.com/2015/08/17/the-sustainable-active-investing-framework-simple-but-not-easy/
Considering QVAL has only been around since late 2014, I highly doubt any performance analysis can be drawn to this point to show that its worth the .79% expense ratio. Since it has only 41 stocks, the average investor could build this portfolio pretty easily with less cost.
Well it matters how big your portfolio is in the first place and you would have to rebalance quarterly.
But the biggest advantage of holding stocks via an ETF is tax deferral. The ETF can rebalance without any cap gains costs to you. This is huge.
If you believe backtests are remotely accurate, then a fund like QVAL will beat out dividend growth investing across any long term time frame.