What Dave Ramsey Doesn't Like About Investing In ETFs
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- Опубликовано: 27 июл 2023
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My husband and I are very worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, years nonstop just for a crooked system to take all you worked for. I need a way out. I was told to invest, but I have no idea on what to do and where to begin.
It is pretty easy, just get yourself the services of a good expert in that area of investment you want to go into.
I am retired and I am enjoying my retirement. This is because I invested and started my retirement plan early. Although my work time never gave me the chance to mange my investment, I employed the services of a financial manager, and I am enjoying it now.
I need all the help I can get. Any good recommendation will be very nice.
Her name is Leticia Zavala Perkins.
Thanks for the recommendation, Leticia Zavala Perkins, I am going to look her up right away. How do I get her contact?
I am at the beginning of my "investment journey", planning to put 85K into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice?
Adding JEPI and JEPQ are smart additions in my opinion. As for staying committed to higher-risk investments, it's all about balancing your risk tolerance with your long-term goals.
The market is not necessarily a rollercoaster if you know your way around the market, there are various opportunities in the present market to accrue good profit, If you are not too savvy with the market, just buy and hold on strong companies with good earnings, or consult with advisors on ETFs and actively managed funds. that’s what works for my spouse and I. We've made over 30% capital growth minus dividends.
I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advis0r? I'll be happy to use some help.
Rachel Sarah Parrish is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
*DONALD NATHAN SCOTT.*
To have a discussion about ETFs vs mutual funds and not mention fees is dishonest.
Exactly. Some mutual funds can beat the market, even after fees. But they’re often not well known (for obvious reasons). ETF is the best choice for most people due to the cost savings 💵
Bingo also the managers fees or commission.
This is honestly my biggest gripe with Dave's advice. He never mentions fund fees and preaches actively managed funds while never answering why outside of him picking funds with good track records, despite there being lots of data showing that the majority of funds do not perform based on their past performance.
Other than that, I listen all the time. Just something that bugs me.
Remember these guys aren't licensed financial professionals. Buyer beware.
Exactly
Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Just ''buy the dip'' man. In the long term it will payoff. High interest rates usually mean lower stock prices, however investors should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder.
The truth is that this is really not as difficult as many people presume it to be. It requires a certain level of diligence, no doubt, which is something ordinary investors lack, and so a financial advisor often comes in very handy. My friend just pulled in more than $84k last month alone from his investment with his advisor. That is how people are able to make such huge profits in the market.
nice! once you hit a big milestone, the next comes easier.. who is your advisor please, if you don't mind me asking?
nice! once you hit a big milestone, the next comes easier.. who is your advisor please, if you don't mind me asking?
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks
You buy low cost index funds if you are saving for your retirement, or high priced mutual funds if you are saving for your financial advisor’s retirement. Take your pick
Best. Comment. Ever. Love this. I am pinching this and using it to educate my friends :) thank you
You’ve missed the point of this video.
You can have an S&P index fund or an S&P ETF. They’re two different things. Dave is talking about why someone would specifically want an ETF.
An ETF allows you to buy and sell at any minute during the day. An index fund can only be bought and sold at the close of market.
@@JakeM218 No he didn't. The point Ramsey did not make was the enormous cost difference that, unless you have 0 self control and start trading like you are in vegas, the ETF is always the better option because much less of your money gets eaten up by sky high costs
@@Sadreath You believe he’s comparing active funds vs passive funds. He’s not in this video. He’s comparing just the wrapper. You can have the same items inside each type of wrapper.
VUAG Vanguard S&P500 ETF 0.07% fee
UBS S&P500 Mutual Index fund 0.09% fee
There’s barely anything in it in terms of fees. An Index allows you to buy and sell it at a single point each day, whereas an ETF is adjusted on a minute by minute basis during trading hours.
@@JakeM218ETFs are more tax friendly for taxable accounts, which is a main advantage over index funds. That said, it’s splitting hairs for most people, especially those who don’t have a gigantic income level/bracket.
I have been a dividend focused investor for a long time. This does not mean I don't own growth stocks, I do. A well rounded portfolio should be a mixture of both categories. One way to minimize the anxiety out of stock market investing, is to make sure you keep a large cash cushion. I invest in the market, but never put all my money in market.
Dividends are dope. Personally, I sometimes use my dividends to buy other dividend and growth stocks for diversification instead of reinvesting in the same stock. To each their own methods though. The good thing is that you’re investing in the first place and that’s what’s important.
I agree. Based on personal experience working with an investment advisor, I currently have $1m in a well-diversified portfolio that has experienced exponential growth. It's not only about having money to invest in stocks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Consider your large cash stash "dead money".
the yield on bonds have decreased especially on the long end (30 and 10 Y) indicating that the demand is still there even if the supply remains huge showing a preference for safety. I'm still at a crossroad regarding whether or not to liquidate my $138k
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
I agree with you. I started out with investing on my own, but I lost a lot of money. I was able to pull out about $200k after the 2020 crash. I invested the money using an analyst, and in seven months, I raked in almost $673,000 *.*
Please will you be kind enough to share the details of the man that helped you? *.*
Actually its a Lady. Yes my go to person is a 'MARY KALIOPE BRAUN'. So easy and compassionate Lady. You should take a look at her work.
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks
With the ETF approved, institutions will need to buy Bitcoin for their ETF. There will be marked increase in demand, can i get in and still make profits? i have set aside $250k to get fully invested this year
Yes of course you still can. Reminds me of the guy who bought bitcoin in like 2011 and everyone was calling him a chump, then the market boomed and after a few years and he made a killing, whereas many people got burnt because they doubted.
The only issue you might have is the fear of missing out, just like everyone else. A good number of people discredit the effectiveness of financial advisors in exploring new markets, but over the past 10years I’ve had a financial advisor consistently restructure and diversify my portfolio/expenses and I’ve made over $1million in gains… might not be a lot but i'm financially secure.
wow massive gains! my partner recently hinted on going same direction.. what did you invest in, and who is your investment advisor please, if you don’t mind me asking? in dire need of asset allocation
Sonya lee Mitchell is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I searched her up, and I have sent her an email. I hope she gets back to me soon. Thank you
Lately I’ve been mad at myself for selling my 90 shares of NVDA at 303usd each last year may. I’m considering liquidating a few other investments to rebuy and trade but afraid to do so, I also have about a half a million in savings making me next to nothing, thoughts? Ideas ?
Everybody needs a margin of safety in their portfolio and you should take to note; its time in the market vs timing the market.
Reduce risks on your portfolio, shore up your core holdings, and take some profits while balancing your portfolio allocations. I for one found working with a proper fiduciary very rewarding, I’ve had my portfolio up over two years now, its what my spouse and I do.
Pls ma’am a little more info on your adviser
I’d say Lina Dineikiene, look her up. Truly exceptional.
I’d say Lina Dineikiene. Simply exceptional
Purchasing a stock may seem straightforward, but selecting the correct stock without a proven strategy can be exceedingly challenging. I've been working on expanding my $210K portfolio for a while, and my primary obstacle is the lack of clear entry and exit strategies. Any advice on this matter would be greatly appreciated.
the strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset/knowledge to pull such trades off.
Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.
Please can you leave the info of your investment advisor here? I’m in dire need for one.
@@ChristopherHoward-kf7yk *Monica Shawn Marti* is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment
@@lawrenceHart-ys2ct Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
1. ETFs are just more liquid meaning you can buy or sell it during market hours. They act like stocks.
2. Mutual Funds are only once a day and one price a day (usually after the market close) and usually require funds to be added regularly.
3. Both can either be passive or active, which impacts fees.
And on point number 1, if you are dollar cost averaging on a particular interval into ETFs, you will need to actually log into your account during trading hours and make the purchase. With mutual funds you can set purchases on autopilot (for that one price mentioned in point number 2) and forget about it. So choose the right vehicle based on your needs and preferences. If you don't see yourself buying on routine intervals and are planning to lump sum into the market, sometimes an ETF can be preferred.
@@costco_pizza Exactly. EFTs just give the investor more flexibility (good or bad depends on circumstances). Maybe EFTs are better if there is fluctuating income, like commission based.
@@costco_pizza
Yes. Very important point
Also, my experience with Vanguard has been that ETFs are great to get their "admiral" low-fee funds without the $3,000 minimum investment which is a barrier to entry for many new investors.
@@mitchellmatthews97 vanguard low fees are a big edge over their competition.
The most important thing that should be on everyone mind currently should be to invest in different sources of income that doesn't depend on the government. Especially with the current economic crisis around the word. This is still a good time to invest in various stocks, Gold, silver and digital currencies.
The key to big returns is not big moving stocks. It's managing risk in relationship to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.
Even with the right technique and assets some investors would still make more than others, as an investor, you should’ve known that by now, nothing beats experience and that’s final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I’m buying again
I’ve actually been looking into advisors lately, the news I’ve been seeing in the market hasn’t been so encouraging. who’s the person guiding you?
Having a counselor is essential for portfolio diversification. My advisor is Megan Nicholle Granda who is easily searchable and has extensive knowledge of the financial markets.
Having a counselor is essential for portfolio diversification. My advisor is Megan Nicholle Granda who is easily searchable and has extensive knowledge of the financial markets.
An important point that I think Dave is missing is that mutual funds typically have higher expense ratios than ETFs. For this reason, although they are similar as diversified baskets of stocks, ETFs are generally better given the low fees.
Mutual funds can be preferable over ETFs in scenarios where you value professional management, want automatic reinvestment of dividends, or seek the ability to make frequent, smaller investments through features like automatic investment plans. Additionally, if you prioritize simplicity and don't plan on trading frequently, the convenience of mutual funds might outweigh their higher fees.
@@tb7-rf1fb yeah literally all of that is the opposite and complete bullshit. Mutual funds are horrendous
@@tb7-rf1fb Over time professional management has not out performed the market. Keep it simple buy indexed ETF's and you will be rewarded also by lower fees. No one has insight in to the future so why try to actively manage anything?
I have everything in vanguard VUG and in VOOG. They do great with ridiculously low fees.
@@tb7-rf1fb Yes! this is one thing I didn't consider with ETFs. Since my dividend is not enough to buy one whole share I can't reinvest them.
I pretty much invest in the S&P 500 ETF VOO every month. Buying and holding and never carrying about selling. The fees are incredibly low for it.
Keeping everything in US maybe a little risky long term. I also invest in S&P but split for a global index fund like VWRL.
Not a bigger returns but safer imo and steady.
Same, just by VOO and you’re getting a vast majority of the US Stock market
VOO is the only fund that consistently made money for me. I love it and expense ratio is way lower than mutual funds
What is the point of doing this instead of just buying into the index itself?
@@patalenoi bekieve VRWL fees are significantlt higher. So i just do Sp500. The way i see it, if the american economy fails, the world bas bigger problems
Edit: also, VRWL is 65% american, so not as diverse as the name suggests!
I'm favoured, Getting my own Truck has always been my Dream for my business. I just acquired 2 recently, earning $32K weekly has been really helpful. I can now give back to the locals in my community and also support Charity Organizations. I really appreciate your videos
There are many other interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell the shares or ETFs you want to acquire.
True. Having the right financial planner is invaluable. My portfolio is well-matched for every season of the market and recently hit 90% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, though this could take till Q3 2024.
That's impressive, have you always had guidance?
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with Jennifer Lea Jenson for the last five years or so, and her returns have been pretty much amazing.
You work for a 40yrs to have $1m in your retirement, meanwhile some people are putting just $10k in a bitcion coin for just fe months and now they are multimillionaires thanks to Charlotte Grace Miller
she's mostly on Instagrams, using the user name
FXMILLER195 💯.. that's it
I have both. My ETFs often have much lower fees, and I like being about to trade an ETF instantaneously rather than waiting for the next valuation-point, which might see the market having shifted by 1%. I agree with Dave on the importance of avoiding over-trading.
If youve ever listened to Jack Bogle youll know that mutual fund fees absolutely decimate compound interest over time. A 2% management fee over time will leave you with 33% of what you could have earned in retirement investments at age 67!! If you are buying mutual funds, keep the expense ratio as low as possible. I never buy anything above .5%, and most retirement investments are less than .2%.
ETFs like VOO is much better than mutual funds since the management fee of VOO is like 0.03% while mutual funds can be 1-2%. that 1% difference over a long period of time is a huge difference.
Just DCA into broad market ETFs and/or low cost index funds. Make sure to set cash aside (cash is good) to buy the dips. Then hold forever. Easy, no sweat investing. If you like individual stocks, I would not allocate more than 20% of your investment money into them.
I would never have an actively managed mutual fund. You take 3 hours to do some research and realize an ETF cheaper and its very easy to invest in.
I was advised to diversify my portfolio among several assets such as stocks and bonds since this can protect my portfolio for retirement. I'm seeking to invest $200K across markets but don't know where to start.
the strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset/knowledge to pull such trades off.
Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.
Please can you leave the info of your lnvestment advsor here? I’m in dire need for one
Laila artine kassardjian' is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
Totally reasonable answer. The title is a bit clickbaity since he specifically says he doesn’t hate ETFs
Successful investing is hard work because it means disciplining your mind to do the opposite of human nature. Buying during a panic, selling during euphoria, and holding on when you are bored and just craving a little action. Investing is 5% intellect and 95% temperament.
Government policy has thrown the future under the bus for decades. The day of judgment is near. I predict an 80% drop in the stock market. Investors will abandon stocks in favor of real estate. There will be no money in banks... You must devise a strategy for survival.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
I've shuffled through investment coaches and yes, they can be positively impactful to an individual's portfolio, but do your due diligence to find a coach with grit, one that withstood the 08' crash. For me, Melissa Rose Francks turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.
Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon.
Index ETF is better due to low cost versus mutual funds.
Active managed mutual funds almost never beat the index! So buy the index ETF.
"I don't want you to be buying and selling all the time" - Thank you for that Dave! 🙂
When my dad died I took over my mom's finances and wasn't really confident in what I was doing so I talked to a broker and he put me in a fund that rebalanced every quarter. There were tons of transactions and it all seemed like nonsense when I started looking at the paperwork. Now that I've bought and sold stocks myself, I'm a lot more confident in my knowledge and abilities, and would just do it myself, if I could go back. I didn't lose anything, but I don't remember really having any real gains.
I wanted to invest 2/3's of my HSA money before I retired, so I asked my financial guys what I should invest it in. At first, they wanted to make sure I really wanted to do that and I told them that I did because I had a large amount of money that wasn't earning anything in the cash account. So they told me to invest it in a specific ETF which I did. Fast forward 7 years later and I'm very glad I made that decision because the money has grown a lot and it is so nice to have a bucket of money for medical/dental in retirement. So far I haven't had to use any of the ETF money, so I'm just letting it ride and I feel more secure knowing it is there in case I need it.
I did something similar a few years ago when I opened a brokrage account, and started investing outside my retirement. Having a large amount of assets that you can sell any time gives great piece of mind.
I literally have 3 different accounts where my money is automatically invested into etfs idk wtf your talking
If you are not buying and selling, I would just buy simple index funds and just hold them. I don't care if Dave doesn't like them, they work and they are low cost.
I agree. Mutual index funds makes it harder to get in and out of them. This helps denture spontaneous buying and selling shares.
ETFs and Mutual Funds are the same but ETFs tend to be cheaper if they are passive
They can also be very complex.
Thank you for you insight.
There is one particular thing with investing that I would challenge Dave on, which is actively vs passively managed funds. Sure, some 20% of actively managed funds do make more than passively managed funds, but the odds are against you from the start. Then when you factor in the 10x higher fees, you lose most or all of your advantage.
Maybe a handful of people in the world can do it year over year for decades as well, which is a long-term investor’s timeline.
@@NeedofBeingVersed you are right, there are a handful of people that can do it. I just don’t trust that I can find those couple individuals that can do it or that the ones that have shown huge returns for the last couple decades will continue to do it consistently
@@tylersanders2388 100%. I agree with you, just worded it poorly. It just isn’t worth trying to find the needle in a haystack when an inexpensive and reliable alternative is available.
This is exactly the reason he tells the layman to find a balanced portfolio and invest with dollar cost averaging. Simple and always a winner in the long run.
Warren Buffet talked about passive index funds beating the vast majority of actively managed funds. They can run all their calculations and discuss and hem and haw over their decisions, but you can get just as good if not better results just investing on a set schedule in a good quality index fund or ETF. Decide which sector of the market you want to invest in and stop worrying about it. Time in the market is far more important than timing the market, although once in a while, blatant opportunities present themselves. I managed to catch the 2008/2009 market at the very bottom, and the COVID scare and whatever the heck happened on about October 23rd last year. Desert Storm and 9/11 were two other events where I just didn't have any money available to jump on anything, but I wish I had.
This is a great question, and Dave gave a great answer for people who listen to this show and are on the baby steps.
Worth mentioning is that many ETFs, especially ones from Vanguard and the like, are based heavily on their mutual fund siblings. There's really very little in the difference except how it's traded, management fees, and the like.
My only problem with ETFs (at least in regards to Vanguard) is that you can't invest automatically into them. So if you have a Roth IRA with Vanguard, and you have an automatic deposit every month, then you have to go into your account each month and buy your ETFs so the money is actually invested. Their mutual funds allow you to invest into them automatically.
All that said, I chose to invest in ETFs and make the extra effort, to save on fees. But for many people the convenience of set-and-forget is probably worth going with Mutual Funds.
Etfs have a slight dividend lag too,which over time can make a difference
@@smileychess From what I've read at ETrade, it is possible to automatically invest in ETFs.
@@damondiehl5637 - As mentioned in my comment, Vanguard doesn't allow you to automatically invest in ETFs. I wasn't talking about ETrade.
@@smileychesspossible now with Fidelity. Others are coming on board
Mutual fund fees will kill you. ETFs are better
ETFs, especially the Vanguard ETFs have the lowest fund fees you can buy. The fund managers do not have to make any decisions except to buy the same stocks that comprise the Index that they are tracking. The SPY is a good example. You are buying the S&P 500.
Fidelity fees are even lower than Vanguard 😉
He’s talking about the ETF wrapper and what it means.
You can invest in an S&P500 index fund, or an S&P500 ETF.
They follow the same stocks and have similar fees, but he’s discussing why someone would actively choose an ETF over an Index fund.
ETFs and Mutual Funds are just different wrappers intended to hold positions. Only difference is the way they trade. Both can be either active or passive in the underlying investment and fees differ on an individual basis. As an investor it’s important to understand first, what is the underlying fund goals and what it is tracking, etc. Or what the fund manager is using for the selection process. Second, what am I being charged in fees. Everything has an expensive ratio and sometimes a load fee or spread cost in buying/selling. It pays to be an educated investor, buy and hold, day trading is not investing.
EFTs can have very complicated contracts that even have shorting or promissory’s built into them.
I think one advantage of etf is you don’t have to put thousands in to start like a lot of mutual funds
Did the person that wrote title watch video? Solid core advice from Dave.
How has he not gotten in trouble with the SEC for this nonsense?
Dave shows his incompetence a lot when it comes to investing in the markets. Great for financially illiterate people who need help battling debt, terrible for those who are financially smart and have the capital to invest properly.
Thank you so much for this clean explanation!!
ETFs produce the same results as mutual funds except lower fees.
ETFs have higher fees?
@@marceneljlower fees
Not necessarily true. There are high fee ETFs. There are low fee mutual funds. The actual distinction is actively vs passively managed
@@dkaik BS!
@@ilcasti oof. How does it feel to be that confidently wrong? lol.
ARKK ETF - 0.75% ER. VTSAX mutual fund - 0.04% EF.
An example of an ETF approx 20x more expensive than a mutual fund (remember; all index funds (note I didn’t say index ETF) are mutual funds. Not all mutual funds are index funds). The difference? Actively managed (ETF) vs passively managed (mutual fund). How about you try that again, except this time don’t say something incorrect.
In a non-retirement account ETFs can give you control over when you pay capital gains tax . You only pay when you sell. You still have to pay the tax on dividends but at a favorable rate if you hold them long enough. Which is why I use index ETFs in my non-tax-deferred brokerage account. A plug for Vanguard, if you use their ETFS your trades are free. And I have found them just as liquid as mutual funds .
@@JamesWitcher-wg5vdlol
This. You actually get a benefit of accumulating tax deferred gains, which contribute to compounding. Effectively, owning an ETF in a taxable account is an interest free loan from the IRS for the long term investor.
Most mutual funds don't throw off capital gains in my experience
@@thedopplereffect00according to articles I’ve read, ETFs are better from a tax perspective relative to capital gains in a given year. It has to do with the sale of individual stocks in a mutual fund when people sell shares in the fund where an ETF doesn’t act the same way.
The difference in capital gains distributions between ETFs and mutual funds is staggering. In 2022, just 4% of all ETFs distributed capital gains compared to 44% of mutual funds@@thedopplereffect00
My ETFs: SVOL, JEPI, QYLD, RYLD pays me $1100 monthly dividends. ETFs are less expensive to own than mutual funds. Plus, they trade continuously throughout exchange hours, and such flexibility may matter to certain investors. ETFs also can result in lower taxes from capital gains since they're a passive security that tracks an index.
ETFs, which are passively managed, tend to have significantly lower expense ratios than actively managed mutual funds. What drives up a mutual fund's expense ratio? Costs such as a management fee, fund accounting and trading expenses, and load fees related to their sale and distribution.
Great advice about holding on to the ETF a long time, but not sure why mutual fund fees werent discussed. Buy and hold, right on!
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.
investors should exercise caution with their exposure and exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields.
I agree. Based on personal experience working with an investment advisor, I currently have $385k in a well-diversified portfolio that has experienced exponential growth. It's not only about having money to invest in stocks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
Glad to have stumbled on this conversation. Please can you leave the info of your investment advisor here? I'm in dire need for one.
I work with "Nicole Desiree Simon" as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
Nicole Desiree Simon is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Dave Ramsey “mutual funds and etfs are almost identical” (when holding long term). His biggest sign off on etfs yet.
Yeah that was a mask off moment for papa Dave. Let's check the expense ratios 😂
stay away from credit cards
He’s not talking about the contents of each fund. He’s talking about what specifically an “ETF” wrapper is.
You can invest in an S&P Index fund, or an S&P ETF. They both follow the same stocks, but they are slightly different in how they operate.
An Index, like a mutual fund is only sold once per day. An ETF price changes minute by minute during opening hours.
@@JakeM218 my point was for the past decade Dave has endorsed that actively managed mutual fund with added expenses is the way to invest, he has specifically argued with callers against etfs as a concept. So this video is quite the positive change.
@@nugsin4
So you check expenses of ETFs do you also check the underwritten contracts that the EFTs are structured. Just wondering since you like to check things out.
After investing in ETFs, I will never buy another mutual fund. Although they are similar products, the small differences between them easily propel ETFs into the better choice.
Sometimes a mutual fund will require a high minimum investment, like $5M, but an associated ETF with the same composition will require no minimum investment. For that reason, a large chunk of my retirement savings are in ETF's. I also like how I can place an order at the market price at that instant, instead of at the market close.
ETF and mutual funds are very different. Mutual funds are usually actively managed and charges huge fees close to 2% that makes a huge difference. They systematically underperfund index passive funds.
Concerning Passive mutual funds, they are less liquid than ETFs but that doesn't make a difference since you should use them for buy and hold anyway. The advantage with ETFs is that there price is low so it is easier to dollar cost average. Though some passive mutual funds provide fractional shares.
Dave, the reason you dont sell your mutual funds at your age is becaue you are a millionaire with multiple streams of income. You dont have to which is not the case for everybody else.. lots of us need that money to survive.
💯
If you need money from a mutual fund to survive, you are in the wrong game.
@insideoutsideupsidedown2218 so people who spend their whole lives buying mutual funds in their retirement accounts are not supposed to use it when they reach retirement age? I see
@@insideoutsideupsidedown2218you a bozo
@@marcenelj
You do not liquidate every investment you have once you reach 65 years of age. You still would be wise to hold some of them.
Tell me you are getting kickbacks from fund managers without telling me you are getting kickbacks from fund managers....
He does not need it. Mutual funds for the vast majority of people are better especially if they diversify them. ETFs are extremely complicated and not as clear cut as some suggest.
He's speaking to someone here who does not regularly trade; if you day or swing trade and like ETFs, it's probably wise to have several. Safety is the advantage (as with mutual funds)
To paraphrase Ben Graham: you can’t guarantee the future returns of a fund, but you can guarantee the expense ratio.
ETFs are often much cheaper than mutual funds, so I choose ETFs.
Combination of VOO and SCHD will outperform his mutual funds all day LOL
From what i understand Dave recommends Mutual funds that may beat the market but also have higher management costs.
The main reason togo with an etf is the low costs. Were talking under 0.1% management costs.
I am moving to individual stocks in my portfolio. There are no fees or commissions. I know what I own. I am not paying fees and the dividends are consistent compared to what you get from an index fund. The yield on cost can increase with dividend stocks which is a very good thing.
So her investment person told her what it was. But she "called" Dave to find out what it is.
Trust factor
My wife will do the same thing😂.
Is that what Dave Ramsey say’s?
@@Dividendflywheel
Is it not called a second opinion?
Or do people not like that today?
I have both and i buy and hold for a long time...the big difference is "FEE". Mutual fund fee is much higher than ETFs
With Money Markets funds, shareholders are assessed taxes on the net capital gains incurred
by the fund manager in maintaining the fund. This is sometimes called the capital gains distribution
Why Ramsey doesn't say about cost of mutual funds? Theyre the most expensive from index funds or ETFs, because you gotta pay for actively managed fund
ETFs are better than Mutual Funds period.
Some ETFs are slightly more tax efficient than Mutual Funds (Vanguard)-this can be beneficial in taxable accounts. Also there are some ETFs that specialize such as a basket of laddered bonds. Depending on where you buy the investment check the cost of the EFT vs the equivalent Mutual Fund. Cost matters a lot. You don't get what you pay for. Agree with Dave-stay away from timing the market with ETFs (or anything).
I think investors should always put their cash to work, especially In 2024, we'll start to see more market diversification. I'm hoping to invest about $350k of my savings in stocks this year. Hope to make millions in 2024.
Since risk is at an all-time high right now, perhaps you should be a little more patient but remember the bigger the risk the bigger the results. Alternatively, you can consult a trained financial expert for strategy.
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024.
who is your advisor please, if you don't mind me asking?
Her name is “Aileen Gertrude Tippy” can't divulge much. Most likely, the internet should have her basic info, you can research if you like
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
ETFs - liquidity & Supply and a demand. Mutual Funds, NAV + longer term
2x leveraged S&P and Nasdaq ETFs are the sweet spot in my opinion.
Does your ETFs have shorting contracts?
Would never recommend - ok for gambling, as risk mangement has left the room. Have done leveraged investments and made good money. But only for marginal trades. And I recognize the upside has been luck.
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Victoria Taylor
Wow. I'm a bit perplexed seeing her been mentioned here also Didn’t know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has be super.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states.
Really you people know her? I was even thinking that I'm the only one she has helped walk through the fears and falls of trading.
I'm new at this, please how can I reach her?......
SHE'S MOSTLY ON TELEGRAMS, USING THE USERNAME
Best response from Dave!
Stats show (search yourself), that most of mutual funds don't beat ETFs/Index investing, plus you will pay a higher commission. Some mutual funds just buy ETFs. That's definitely unfair not to mention commissions.
You can buy and sell inside of an ETF account responsibly to account for taxes and other variations. Yes, buying and selling based on news of performance is bad. But you can change your composition based on government policies and other factors (instead of just stupidly looking at one number that goes up and down all of the time). Buying and holding is great, but there are intelligent ways to buy and sell only if you have an expert with amazing connections managing it for you and can optimize for taxes and fees while still getting you better returns overall than simple buy and hold strategies.
ETF’s are great for taxable brokerage accounts, because they generate less internal capital gains taxes. If you hold a large amount of money in a mutual fund that is in a taxable account, you may be surprised at the end of the year with an unexpected tax bill should the mutual fund sell off some of their stock.
Capital gains tax is only on joint filers after you make 89k on it that year.
RC Aviator; we agree on this 100%😊. We had different (not divergent) opinions on an earlier topic.
• also the actions of other investors in a mutual fund (who panic and sell at market bottom), forces fund managers to sell perfectly good stocks at a loss. This negatively impacts the returns of investors who are left in the mutual funds.
• I remember John Bogle discussing this as an inherent flaw in how mutually funded investment of mutual funds construction.
I think it could at least be mentioned that there are successful ways to trade and speculate..... There are effective ways, risk-mitigated methods to control risk and play the short game as well.
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Generally ETFs are way better as they usually charge much lower fees
I had a mutual fund for 3 years and switched to ETFs recently and my gains are already higher in only 6 months (I know this could drop significantly but I'm confident in my knowledge/research). I buy and hold just like Dave.
ETFs are more volatile by definition
Nothing to do with whether it's a mutual fund or ETF. It's probably just market timing, 2023 the sp500 ended up 20%, nearly recovering to the peak in 2022.
It's also possible your old funds were terrible and your ETFs are good low cost index funds.
Complete and utter nonsense. I bet on red ….. I switch to black and I won.
I am trying to avoid making any new buys at this point in other not to get sucked into a bear market trap. I was really hoping for my investments this year, but all my plans have been disoriented, I've been studying the market prices and I realized some investors made a fortune from the recent recession and I wondered if such success rate could be achieved in this present market. Any recommendations?
Cryptocurrency crashed the last couple years, so it should be starting a new run to a new high.
I grew to a 7 figure well-diversified portfolio just by following Trisha Jean Webb's recommendations. I buy quality firms, anticipate to hold them regardless of what happens, pay up but not too much, keep track, sell only when necessary, and be ready to course correct. also ignore the forecasts and market views which are at best entertaining but completely useless. keep investing and you will be fine.
@@craigrussell2045 checked for your FA and found her web page. she is very impressive, I wrote her and I'm waiting on her reply.
@@craigrussell2045 So Trisha Jean Webb avoided serving prison time for fraud?
You buy during a bear market…….. in phases ………..
I like mutual funds better because it uses the entire amount I have to invest. Plus, you don’t overpay when buying a mutual fund. Either way, please only invest in index funds. I only own US Total Market index funds, which cover large, medium, and small US based Companies. Extreme diversification and low risk. Love it!
uses the entire amount and dont overpay? im not quite sure i understand. at the very least, the same should be true for etfs at least provided the broker allows fractional shares.
@@omegazeroINFI Everytime you buy an ETF, you must purchase it from someone else. They will sell it to you for more than the market price, because they must make money. This is what I mean. And not all brokers allow fractional shares, that's what I hate about ETFs.
@@huskiefan06certainly isn't the case if you're buying something like VTI directly thru Vanguard
@@huskiefan06 Nonsense. You're referring to the bid/ask spread. On any large liquid ETF that's going to be fractions of a penny.
@@johnkump392 I'd rather not lose those fractions. They add up, especially if you're buying multiple times per year
The fees of mutual funds keep me from investing in them. ETFs and stocks are the way to go. Mutual funds you’re typically paying somewhere around 5% up front, and then 0.75% or so annually. You can buy VOO with no upfront fee and 0.03% expense ratio.
VTSAX has a .04% MER
@@perotal Not bad either. Just have to get out of the traditional A/C shares.
SCHD is also good
@@IgorLisx dividend investing is retarted
The msci world ETF is very diverse ca.1600 different companies in about 23 countries cost is at around 0.2% which is very low look for an accumulating one which reinvests the dividends average growth in a 15 year period about 7%. In around 7-8 years you would double your investment. A low or no charging broker (if you can find in the US) saving plan into that fund is very advisable. This would be a long term passive investment.
ETF's tend to be more tax efficient (irrelevant if in an IRA), and may have lower management fees.
ETF's generally have restrictions on frequent trading; you get out, you have to wait 30 to 60 days to get back in.
Remember, 5 out of 5 certified financial planners recommend using a certified financial planner.
ETFs are no actively managed and carry lower fees. A mutual fund is actively managed and carries higher management fees. It's that simple.
So many people are missing the point of this video. He’s not talking about contents.
You can have an S&P500 Index fund and an S&P500 ETF. Both with similar fees, but the difference is how the ETF wrapper works.
An index fund nor a mutual fund is bought and sold at the close of market. You initiate a sale and whatever the price goes to at the end of that day is what you get.
An ETF price is updated on a minute by minute basis when the market is open. You can therefore sell at 9:05am, then re-buy at 10:51am etc. It’s much better suited to people who like to trade multiple times per day.
Mutual funds has a high fees because it is under the management of active managers. Unlike ETFs it tracks the index trend of its holdings by issuers.
As an ETF investor, I agree with Dave on this 2:10-2:20 but I wouldn't attach that to an ETF but more for investors who are trying to make a quick buck.. which I find rather strange. But that's not what ETFs are for. They provide steady cash flow with steady share price growth and if you do your research, there are some pretty decent tax efficient ETFs out there. Steady on fellow ETF investors
I buy qqqm, voo, and schd every other week no matter what.
I am working with Ramsey smartvester pro and they have all told me to do ETFs.
Better to hold ETFs than Mutual fund in a brokerage account. The difference in capital gains distributions between ETFs and mutual funds is staggering. In 2022, just 4% of all ETFs distributed capital gains compared to 44% of mutual funds.
IMO, Trading ETF can be challenging, considering a lot of factors. Hence, if you only want to hold it long term then it's as good as getting mutual funds.
Thanks your message is very timely.
Yesterday I was talking with a potential advisor and her sales pitch was to 4 times a years look at what sectors (energy, industrials, etc) are doing the best and invest in the winners IE change your investments 4 times per year.
I have been a buy and hold investor for 30 years and I was almost taken in by her sales pitch.
Buy and hold has worked well so why should I change now that I have won the retirement race.
Today's winners are tomorrow's underperformers.
I am a speculator on about 25% of what invest in. I also do the same type of speculative investing for things to fall in price as well. Things can’t always just increase in value like Ramsey said if the capital isn’t available to invest. Look at the situation we are in currently, most are half broke and only a small percentage of people are financially in a good place.
ETF’s are easier to place in my brokerage account because I can just buy them with the mutual funds if they aren’t supported by my brokerage account then I’m stuck paying transaction fees whenever I purchase the funds.
Financial advisers always have access to better and new mutual funds than direct investment mutual funds. However I use both for different accounts.
Warren Buffett bet millions (donated to charity) that a mutual fund wouldn't beat the stock market. He won. You're giving your money to the people who "manage" the funds that are losing to SPY or QQQ that also have much lower expense ratios than mutual funds.
I've also never got a notification from my broker that encourages me to trade more, not sure where that idea comes from.
I'd rather lose my money like an honest man, YOLOing on 0DTE options. I wonder what Dave's opinion on YOLOing is.
Mutual funds do make it more difficult to trade in and out of the market, but I think its only fair that you explain the other advantages of an ETF. If we are going to educate lets be fully transparent, even if it doesn't benefit the "Smart Vestor pros" commissions. Mutual funds have higher fees, require larger investment minimums, less liquid as mentioned, and most actively managed mutual funds don't beat their most comparable index over time. However, there are some stellar managers that earn their fee and outperform. Most people wouldn't know how to identify those funds and managers which in short means most people are better off buying the indexed ETFs.
Dave says not to speculate and time the market. What does he think actively managed mutual fund managers do?
Not all mutual funds have high fees. Depends on if theyre active or passivley managed. My Schwab passively managed mutual fund has lower fees than most ETF's. My SWPPX with a .02% fee has a higher YTD return than VOO and is cheaper than VOO's .03% expense ratio.....
That's true but the mutual funds that Ramsey recommends are actively managed so they have higher fees
@@lepoj idk but ive never heard dave recommend any specific fund to invest in, just categories...
Some ETFs have high expense ratios, looking for ones with a low expense ratio (.25 or lower IMO) is a good idea. My average expense ratio is .08.
@@Dan51320Legally he can't say which ones. He doesn't have a license to do so. If you do some digging online, you'll find that his SVPs recommend mutual funds like American Funds like AGTHX
@@lepoj i know he cant say which ones. but nonetheless if youre going with one of his advisors then youre going to pay higher fees regardless of investing in ETF's or mutual funds.
There's ALWAYS risk in investing, so YES, there is a fraction of gambling.
I like mutual funds more because you can set up automatic investments where with ETF's you have to make every buy a manual purchase on your side.
thats not correct. you can invest in both automaticly - just choose the right broker
Being able to set buy and sell limits intraday puts the ETF miles above a MF, which gets one price hours after market close.
Jack Bogle had the same thoughts on mutual funds vs ETFs.