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There is no difference in returns with mutual funds vs ETFs assuming the expenses are comparable.
It's really just preference for how you want to manage it. If you want to be able to trade during market hours like stocks in small amounts, then ETFs are obviously better. If you prefer larger more infrequent investments, then mutual funds work fine.
Mutual Funds because they reinvest the dividends automatically and you have a panel of experts picking the stocks so you get higher returns.
The problem is that the experts have been failing to beat the benchmarks for years. Index funds are better.
According to John Bogle it is a mathematical certainty that over a lifetime you cannot beat the indexes with active management.
"In study after study, year after year, it has been shown that the vast majority of actively managed mutual funds underperformed their benchmarks" -- Jim Cramer
"Numerous studies show that very few mutual fund managers can outperform an index fund when expenses are taken into account, and those few who will outperform cannot be identified in advance" -- Whitecoat Investor
There is no difference in returns with mutual funds vs ETFs assuming the expenses are comparable.
It's really just preference for how you want to manage it. If you want to be able to trade during market hours like stocks in small amounts, then ETFs are obviously better. If you prefer larger more infrequent investments, then mutual funds work fine.
Many mutual funds have early redemption fees, ETFs don't have that restriction(?). Also you can get hit with taxes from the mutual fund capital gain distribution, what about ETFs?
The question is way too vague. Mutual funds and ETFs can invest in a lot of different things.
What I'm asking is which one do "you" prefer--you made the most money in.
I think stocks requires not only guts but also patience, sometimes you need to wait for several years for your stocks to come back, and those spikes are both tempting and scary.
I don't see any advantage to a mutual fund. I haven't seen any conclusive evidence that they can get bettter returns. Maybe they can do better with risk management, but not returns.
I'm a ETF guy.
With you 100%
The averages have done tremendously well over time. Why not just mirror that with major market index ETF's?
Surprised so many people still buy mutual funds
The averages have done tremendously well over time. Why not just mirror that with major market index ETF's?
Surprised so many people still buy mutual funds
Why? Assuming you're the buy and hold type of investor, who doesn't spend time nearly every day managing his portfolio, and who is more likely to be attracted to mutual funds over individual stocks or bonds, what is the advantage of an ETF index fund over a ordinary mutual fund index fund? Not challenging your opinion necessarily, but the advantage isn't clear to me if you're not into active trading.
Why? Assuming you're the buy and hold type of investor, who doesn't spend time nearly every day managing his portfolio, and who is more likely to be attracted to mutual funds over individual stocks or bonds, what is the advantage of an ETF index fund over a ordinary mutual fund index fund? Not challenging your opinion necessarily, but the advantage isn't clear to me if you're not into active trading.
I'm definitely not into active trading.
By definition "active" mutual funds are buying and selling securities so there are transactions costs baked into the performance. Also mutual funds declare gains every year so there is a tax implication every year.
ETF's just have the expense ratio which is like .05 in the case of VOO or .09 with SPY
I'm always willing to learn though so correct me if I'm wrong.
I'm definitely not into active trading.
By definition "active" mutual funds are buying and selling securities so there are transactions costs baked into the performance. Also mutual funds declare gains every year so there is a tax implication every year.
ETF's just have the expense ratio which is like .05 in the case of VOO or .09 with SPY
I'm always willing to learn though so correct me if I'm wrong.
I'm no expert either. It seems the only differences are (1) that you can trade them day to day, and the value of ETFs changes during the day like stocks, whereas mutual funds are valued at the end of the day, (2) the tax implications may differ, but I don't see how -- doesn't the brokerage send a yearly statement for the IRS as well?
Reason I asked is because I'm wondering whether there is some advantage to be had shifting some of my mutual fund accounts into ETFs. So, far all I see is that you can trade back and forth during the day, which I am not interested in doing anyway.
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