ETFs call home !!!
I have been dealing with the brokerage industry for over 10
years and during that period I have found many instances that
mutual funds were excellent recommendations for clients. Those
days are essentially over. I know you are aware of ETF's. These
are exchange traded funds. The advantage of ETF's over mutual
funds is clear to me. I am sure there is someone who sells
mutual funds who would disagree.
By far the single most important feature of mutual funds is that
the investor receives immediate diversification even with a
smaller capital base. This is also available with a selection of
ETF's. In the days when commissions were in the hundreds of
dollars per transaction, there could be an argument for long
term lower commissions. Clearly that no longer exists. The fees
for management in mutual funds are too high relative to
performance that only rarely would exceed the market or sector.
ETF's have dramatically lower fees. The fact that mutual funds
are bought or sold only after the market close is one of the
most significant differences between mutual funds and ETF's.
ETF's are sold real time during market hours as the investor
chooses. In a declining market you can switch your mutual funds
into cash. In ETF's you can do that but you also can short them
giving you the opportunity to capitalize on the market decline.
ETF's are new and a reasonable amount of education is important.
You can search for ETF and you will find hundreds of sites. You
can create your own asset allocation with ETF's that you have an
instantaneously revise.