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Hi all this is just a question about how this will work. Let me begin with an explanation. My wife and I have a brokerage account that we had two mutual funds with just over 30k in it. The funds have done okay but I wanted to try ETF fund so I made a withdrawal from one of the mutual funds and today I placed the market trade of VXF. The cost per share was $109 and change. So today the market is obviously down from yesterday but it is going up some. So how do I handle the ETF? Is this a buy and hold forever or buy and wait for a large increase in share prices? Does it automatically buy additional shares from profits? Thanks for the advice.
No one can tell you when to sell . No it does not reinvest profits . You can set it up so vxf will reinvest any dividends
Thank you. I knew no one would be telling me to sell. VXF is the extended US stock market outside of the S&P 500 in ETF form. I didn't know if it had dividends or how that would work. I had to explain to my wife what I was doing and why so I will be able to explain further when she asks.
I plan to add to it from my withdrawals over the years to come. Adding to the fund seems simple enough but selling the shares is something different.
They apparently pay a dividend. Since ETFs trade like stocks, dividends are not reinvested unless your firm allows it and you specify it. That is likely a bad idea because every reinvestment will be considered a new purchase and you would pay a regular trade commission for it (and you can't buy fractional shares like a mutual fund).
Also, you said you placed a market trade order today. That means you will buy at whatever price the ETF is when traded. Next time, consider a limit order when you buy and especially when you sell. You don't want to be in the buy or sell queue when the market has a blip.
As chaofan says, you really should have answered these questions before purchase.
Thank you. I knew no one would be telling me to sell. VXF is the extended US stock market outside of the S&P 500 in ETF form. I didn't know if it had dividends or how that would work. I had to explain to my wife what I was doing and why so I will be able to explain further when she asks.
I plan to add to it from my withdrawals over the years to come. Adding to the fund seems simple enough but selling the shares is something different.
Selling it should be just as easy as purchasing.
Most every stock that issues dividends provides for a "DRIP" -- Dividend ReInvestment Program. That is a good thing for many investors - it is analogous to compound earnings. While VXF is not a stock - it has the attribute available for DRIPing its dividends. Just talk to the technical support desk / web support desk at your broker and they can walk you through setting it up.
Selling an ETF is just like selling an individual stock: you place an order. That order can be a "market" order (execute now at the market price), or a limit order (execute at a minimum of $X.XX per share).
As I am not really an investor, I mostly do not post but just lurk and try to glean some wisdom from people experienced in this kind of thing. As I have mentioned before, for several decades I was a very hard-working professional, with a mindset along the lines that one should earn one's keep by providing services rather than play games of fortune. Accordingly, I have placed my retirement money into conservative vehicles, which will compensate for inflation by delayed onset of payment (such as delayed fixed annuities - some of them delayed up to 30 years), or appreciation (real property in expensive cities, which I can furthermore use for living while they are appreciating). Additionally, for many years I was not in a position to lose any money short-term, because (due to my long-standing immigration/citizenship case with the immigration court) there was a possibility that I would need a large amount of cash on a short notice, to start my life from scratch in a different country.
So, having a mindset linking the value of services to amount of earning, I have a bit of difficulty understanding how will even the massive stimuli for expansion of economy (as we are seeing now) result in enough of profit in sales of products and services to continue supporting the present extremely high value of stocks. The US product (and to a large extent even service) market is saturated, ie, people with any amount of purchasing power already have everything they need, so who will be buying the products of this extremely expanded economy? Don't you need to be able to increase your sales in order to increase your profits? If you have no increase in the number of people who need to buy your products, how will you increase your profits? For that reason, I am wondering how can this extremely expanded stock market sustain itself. Correct me if my thinking is wrong, and explain what will continue keeping this stock market afloat.
Back to my individual investing situation. So, after earning enough to support myself at my level of consumerism, from conservative financial vehicles, til the age of about 105 (and indefinitely at a lower level of consumerism :-), and after partial early retirement, I am continuing to earn some very non-essential $, which I have decided to place into an ETF account at a convenient moment. I will be making only one single deposit into that account, and leave the money there for a very long time, definitely longer than 20 years (if I even live that long, considering that I am 58 :-). In that situation, I will of course wait for a low point in the market, because I will be making an investment one time, and one time only, and it would not make any sense to invest at the top of the market. I think this is the right approach for parking an inessential money into an ETF (btw, it will be a growth ETF, with preferably no dividends or very small dividends, as I will not be using it for living off of it, since I will be living off of conservative vehicles, but just as a place to park money most profitably for a few decades) - what do you guys think of my plan?
Thank you to the poster who rep'd me with a link to some information. I will go to it.
To jiminnm so far in 3 days I have made $2.00 a share. Not bad for a rookie. However I know and read the report from Morningstar. I know they do not rate it high and I am okay with it. It is play money and not a lot of it either.
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