Reasons to Avoid Index Funds
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- Опубликовано: 26 апр 2019
- Meet with PWL Capital: calendly.com/d/3vm-t2j-h3p
I generally assume that most of you watching these videos are already fully on board with the idea that index investing makes sense, while stock picking and actively managed funds should be avoided like the plague. Most Canadians are, apparently, not on board with that idea. As of the end of 2018, only 11.5% of Canadian investment fund assets, that is mutual fund and ETF assets domiciled in Canada, were invested in index funds.
Referenced in this video:
How this familiar stock outperformed Apple, Amazon, Google and Netflix over the past 7 years - www.cnbc.com/2017/12/21/this-...
On Persistence in Mutual Fund Performance - personal.psu.edu/qxc2/fin597/5...
Luck versus Skill in the Cross-Section of Mutual Fund Returns - www.jstor.org/stable/40864991...
Searching for Peter Lynch - www.thestreet.com/personal-fi...
Legg Mason's Bill Miller leaves firm amid faded glory - www.reuters.com/article/us-le...
Can You Beat Warren Buffett? (Better Question: Why Try?) - www.pwlcapital.com/can-you-be...
Read up on more investing advice, insights and white papers here.
www.pwlcapital.com/teams/pass...
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PWL Capital Blog Post: www.pwlcapital.com/index-fund...
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I’m very impressed that a person involved in the finance industry is telling us to invest with index funds instead of trying to make an angle for himself. You have my respect, sir!
Couldn't agree more
99.9%should watch this.
Those were my thoughts as well
Then why do you need them? Sure maybe for retirement and planning purposes but if you are in index funds then why pay someone when you are 45?
A lot of people are not confident, scared, not have time, lack knowledge, don't watch Ben Felix's videos, don't trust the system, don't know what a ETF is, etc. There are a lot of reason why a person would use a "finance professional".
The only bad thing about index funds is that your broker doesn't get a fat commission. =) =) =)
And no fund manager gets a fat salary.
.
Exactly.
100%
Do you guys that warren buffet was a fund manager
He beat the market and give his investor a lot of money
I think it's fair to give them some commission
@@user-fi2fk2ei7o There is only 1 Warren Buffett and thousands of brokers who invest for the commission and not what's best for the customer. They app chainmail that they can beat the market, but half of them can actually do it. They used top make their money because they had access to trade but in the modern world, everybody has this access. So like any career field, technology kills those that are "rent-seeking" and rewards those that are smart.
I got clickbaited and am not even angry...thanks for showing different points of views!
Apologies. I'm glad that the click bait ended being a positive experience.
Haha ben , i got stumped , as i was unable to understand what u were saying
But now i understood you that go for index funds
Same.
haha truely! The title should read *No Good* Reasons To Avoid Index Funds (ETFs)
People were actually happy to get clickbaited
Best clickbait video I ever enjoyed.
Sorry for the baiting, but I'm glad everyone left happy.
Agree 😂
Exactly
Haha got us
Huh. Well at least he apologized.
Based on the title, I went into this video like: “WTH is this younger looking Georges St-Pierre wannabe gonna tell me to convince me I should avoid Index Funds.” I left thinking: wow, this Mr. Felix is a decent man, and I very much appreciate his straightforward advice, logic, and use of stats to back up his position. Subscribed - thanks.
Put some respek on Johnny Sinn's name
Ahaha, he does look like GSP
GSP is the goat
I've also heard Ben referred to as "white obama" hahahahaha! Love the guy!
Me: Man I should watch this video to see both sides before I start investing in index funds.
Me, two minutes later: Oh.
That's exactly what I thought :)
That was exactly what I thought when I clicked on the video 😂😂
I also thought same.! 🤐
Two seconds later*, but you still watched it 😅
Same 😂😂
One important lesson here: only a handful of stocks drives up the index. If you miss these stocks, you will fall behind the index.
Kaiser Buddha that is correct. However for example, although the SnP 500 has 500 companies, majority of the gain comes from a handful of the major companies, of which is where majority of the portfolio is invested. For example. Apple, Microsoft and google are just 3 out of 500 companies, and in theory if you took them out you would only be losing 0.006 of the portolio, however you would see a significant reduction on profits as those 3 companies are a some of the few that actually drive the index. So the index heavily relies upon those major companies doing well, and the other hundreds of companies, although do contribute profit (hopefully) are also there to reduce risk through diversification. Hopefully that answers ur question!
@@alexvec296 he had no question...
His monetization comes from his youtube channel. Gives him a lot of freedom to speak the truth.
It matters the index and many Index funds out perform mutual funds and picking stocks
If you want to beat the Index, but a 2x leveraged Index fund.
Every time I tell my bank that I want to invest in an Index fun, they tell me not to do it, and right away the always tell me to invest in their mutual funds..... Now I know why? Bunch of bloodsuckers
gotta leech off of society, cause world-wide market crashes and then ask the government to bail you out with tax-payer money.
Isn't that pretty much what all of Wall St. is about?
That happened to me in 2015,I wanted to open a brokerage account with BMO and they refused, instead they wanted me to invest in mutual funds, they looked at me like if it was only people with money.
Wow man. I can't get over how well edited this video is. The visuals and graphics are really well done and keeps the audience engaged. Your examples are well thought out too. Very concise.
That moment when a portfolio manager tells us not to hire stock fund managers.
You do realize he just throws together passive products for old people while "explaining" it like a particularly articulate robot? A much more appropriate title would be passive allocator, but not so glamorous, is it.
@@petermaag9622 who said any finance job was glamorous? when did that word even come into this video or comment. You sound kinda butthurt.
@@petermaag9622 who cares it works
I genuinely hope more people find your channel, Ben ! Well researched, data backed videos. Love this channel !
White Barack Obama talks investing.
Can't unhear it now
I’ll have to embrace it.
@@BenFelixCSI it is nice to see good looking guys who shave their head when they don't have to. I have the same haircut but I have a horseshoe so it is the only good look on me.
Obama has a canadian accent?
@@musama8771 Wasn't he born there?
Great introduction to long term investment: focus on indexes... with lower fees. Vanguard and some ETFs.
Haven't subscribed faster to someone in a very long time
I discover your channel last week and I have watched almost all your videos already. I'm a physicist, and you make me discover how scientific finances could be, sadly not the first approach when you look to learn more about economy.
Thank you for your extensive researching and properly citing and referencing from peer reviewed journals.
I was an online poker pro for several years and this rings a bell. A lot of players could beat the other players. Not many could beat the rake.
So true
I would share this video with those who can benefit (every average investor), but we know the typical response.
By the way, I like Bogle's response to "What about Buffett?"
He says "Name another."
That’s a great answer!
Warren Buffett agree with Ben Felix ! :) www.cnbc.com/2019/02/26/warren-buffett-wants-90-percent-of-his-estate-invested-in-index-funds.html ! And so do I ! PS: Greate video by the way ! Please keep up with the good job !
fast forward to 1 year later: even Buffet makes mistakes
@@angeloskoulas3988 Great point!
Cathie Wood darling
Your voice and spellings are perfect, Im from Spain and it use to be hard to me to understand economic videos. I like the way you speak English
Welcome to Canada
@@itsthat8496 Are all the guys this handsome in Canada?
I think active fund managers have spent a lot of time and money investing in themselves to learn how to make a living in investing. Passive index funds jeopardizes their career and to some extend they’re passion.
I think you're probably right.
That is so well written and accurate Wayne
Wayne Leafstone *extent
Tazzz 69 Dazzermind *i hope that makes you feel better about your life
How is long time investing in the SP500 jeoperdazing my career?
Man, you are awesome!!! Simple, easy, rational, straight to the point! The best ever videos should be mandatory at schools!
Thank you!
Love those animations and quality content, keep it up!
I was sceptical at first but you have a pretty logical perspective.
Hi Ben. What about when Peter Lynch said individual investors are more likely to beat the market than large mutual or hedge funds?
*TD Bank has left the chat*
RBC has left the chat
Actually TD's e series were a huge revolution prior to the emergence of Good (cheap) canadian index funds..especially since they are a Mutual fund and free to purchase
Can you explain this joke, i dont get it
@@apracity7672 Big 5 banks' mutual funds charge high commission and expense fees. ~2% vs ~ 0.5% in ETFs
Hahahahahahahahah faaaacts
Index is the way to go. Doesn’t mean I’m not 50/50 vsmgx/vgstx lol. I believe in index investing but don’t have a problem with active indexy funds. Great vid
Excellent video! I happen to do VTSAX and VFIAX for IRA and Roth IRA (admiral shares0.04% expense ratio on both). Curious to know what you think. I think this is similar to what Buffett laid out in his will except he has 10% in short term bonds in addition to 90% s&p index fund such as vanguard
I clicked in hopes of hearing a differing viewpoint just because it’s always good to hear other ideas. But when you revealed what you were really going to talk about I was like “oh thank god”
Ahhhh... I'm always happy when there is new content on your channel. Really appreciate your consistently well-thought out sober content. Always great with my morning weekend coffee. After I finish watching, I always share to an FB FI community, because I agree with others that your channel should be getting much more attention.
Thank you! I appreciate you sharing the videos. Thanks also for the kind words.
Ben I just discovered your channel today and WOW your research and clearly stated and well illustrated tips are amazing and will hopefully guide me further in my investing future!! I can't wait to watch the rest of your videos, subscribe, and follow your podcasts. Thanks so much for being out there.
No one told me how good are the index funds then I started investing. Thanks to the videos like yours and other people about ETF that provides us, ordinary people, invest smart!
Came for the clickbait, stayed for the useful info. Thanks.
Lately, stock picking has been very challenging. Ben's comment regarding the lack of correlation between a good company and the stock return is absolutely correct. I'm down on my stock picks even though the companies i have invested in have a large backlog and lots of free cash flow to carry them through this downturn in economy, but that seems irrelevant these days when you see people dumping cash into cruiselines again based on very little good news....However, I am ahead on my index ETFs. I've seen consistent and sometimes not-so-modest returns on them over the past 4 months (specifically info tech ETF and emerging markets >10% return over past month). Less headache and less time spent chasing the great stock! Thanks for the accurate and honest insight Ben!!
I agree. A company doesn't have to have a strong balance sheet. Speculation drives stock price so much that you really have a hard time using old methods to know what to buy. PE ratio almost seems irrelevant. It just gives more proof being in an index is smarter.
I think it's because you're comparing your return on one stock, or a handful of stocks, to the performance of 500 stocks. Even Facebook and Google drop sometimes. You can't compare a down month for five stocks to how 500 stocks do in aggregate over the same period.
Please. Would you teach your watchers on where we can find all of those papers your frequently quote. I would like to read all of those and more like it. Great work!!
Type in google scholar . Carhart(1997) and Fama(2010)
Great video Ben!
But I was wondering, what do you think about Renn Tech?
You're one hundred percent right when we are talking about large-cap, equities exposure. No active manager can consistently beat the market in a US-large-cap stock-picking strategy. There is a case to be made in smaller markets however (NZ for example etc.) With that said, there is a role for active management when it comes to alternative asset strategies that aren't accessible through normal index funds. These active funds can improve risk-adjusted returns through their diversifying effect (Distressed Credit, Merger Arbitrage, Global Macro etc.). But then again, you don't see any 'financial advisors' getting clients access to the AQR's of the world.... so I agree with your overall premise.
I came here after reading Tony Robbins "Unshakable".
Really sad & angry at the same time, thinking I'm in mutual fund for years now, and my investment just about to break even.
Thanks a lot Ben, u give me an idea how to invest smarter than before.
love this. factual, straight to the point, research-backed. You, sir, should continue with this because this kind of knowledge empowers people like me who know very little about the topic. Liked and subbed. thank you
the title seems misleading, however, the information presented is concise and informative.
A great share of my portfolio is invested in index funds, whereas for a small portion of my money I try to pick growth stocks wit using the dcf method in combination with a monte carlo simulation.Developing my valuation model is a
continuous process, checking correlations, means, standard deviations assuming distributions for inputs and so on, but it's a hell of a lot of fun.
Hey Ben,
I have a question about markets that are not so mature, like the Indian or other emerging markets. It is often advised that, in emerging economies, it doesn't make sense to invest in index funds since actively managed funds consistently have an alpha > 3-4%. How do you think the index fund investment advice applies to not so mature markets like Europe/USA/other western countries?
Have a nice day:)
3:50, powerful insight about domino's pizza besting the tech giants
As a young adult struggling with financial issues, thank you Felix🙏
You genuinely deserve much more attention than you're already getting. Such a great source of content. I always recommend your RUclips channel to friends that want to get into investing. Thanks for your effort and great explanations.
Thank you! I appreciate you sharing the channel.
His Podcast "Rational Reminder" will delight you as well.
@@fifh89 Thanks, I'll be listening to all of them :)
Solid Advice! I am into my second year of only investing in ETF's. I like both the Returns AND the diversification.
Yep. Lots to like about ETFs.
I've been investing for over 30 years and find myself agreeing with everything he says in the video. I am now 100% in index funds and wish I had done so years ago. No more individual stocks for me. They may as well be lottery tickets. And my recordkeeping is greatly simplified.
Do you have any recommendations on ETFs to invest in?
Good video. The reason why we often hear finance professionals complain too much money goes into index funds and complain about index funds overall is because they make a living from the very high fees they charge their "customers". They need more suckers who will pay tremendous fees to "manage their money", not less. It's 2019, it only takes a bit of research online and a few clicks to become an investor. No need to pay some fund managers to do it for you.
Hi Ben,
Thanks for your awesome videos. Super useful.
Would your decision to use index ETF's change if you were able to use a CCPC (e.g. a physician), to focus more on dividend stocks or 'high dividend ETF's' given the tax advantages of these within a CCPC or would you still suggest the index ETF approach?
Would you focus on Canadian equity in the CCPC or still take a global approach?
I would not focus on Canadian dividends in a CCPC. The Part IV tax is refundable if you’re paying yourself dividends but the full amount of the dividend counts toward passive income. Canadian stocks have high yields too.
There are some things to be aware of, like the taxation of foreign dividends in a CCPC, but even then there are no guarantees when it comes to optimizing for tax efficiency (asset location).
I generally believe that it makes sense to keep the same mix across all account types.
Wow. This was really an interesting point of view. I'm glad it was in my recommendations. New subscriber!
Excellent video I did not realize such a small number of stocks are responsible for the real return of equities. Explains why I have not managed to beat the market over my investing lifetime. I don't feel so bad now. I still only have a small holding of index funds but have other reasons for that.
Ben sometimes financial information causes a headache for me but that doesn’t stop me from watching your videos 😅
Thank you for your video! Can you please send the link to the vanguard article? thank you!
I knew there will be something fishy about this topic as I have just watched your "Index Fund Bubble" video :D
And yes, everytime there is an article about how index funds are bad, usually there is an active fund manager who is trying to convince the reader... and I am not surprised by that as index fund investing is getting cheaper and cheaper thus making it easier to achieve gains through easy investing.
You Sir have earned a subscriber to the channel ;)
please explain your thoughts on all the recent talk about an index fund bubble
Bad comparison www.pwlcapital.com/its-wrong-to-compare-etfs-with-cdos/
Ben Felix that article does not explain why an index fund bubble does or does not exist. The idea would be that the rise of index funds makes assets overpriced relative to what they would be priced if they were based on valuation models/ manager discretion. Please explain what you think about the fund flows issue
@@samgeschickter454 We don't have a systematic definition of a bubble, and so the only way to know if something is bubble is gut feelings. Remember, a bubble isn't a bubble until it pops.
Thanks for the video. I am looking towards Etf after investing individual stocks for a long time. And also interested options investing. But your video gave more confidence in Etf.
I know great value-quality youtube chanels when I see them and this is one of them.
great reminder video. I wouldnt say I've been told index funds are riskier directly, mostly because almost anyone I've talked to that claims to be a financial planner hasent even really been able to explain what index ETF's are. Which has so far been reason enough for me to stick to self directed index fund investing.
That's a pretty good reason.
Hey Ben, what do you think about the low volatility anomaly, and volatility as a factor in general? Could be a topic for another video.
It’s coming. Two videos from now. Really interesting topic.
Really enjoy your information and style in which it is presented, Ben. Thank you and keep up the good work.
Thanks!
LOVE the channel and share the viewpoints with my employer, a very large asset manager.
One question I’ve always had regarding index vs “active” are we including sector funds vs broad funds? As example if we have a large cap growth fund, I’d expect it to underperform spy, but if an asset manager basically breaks apart an index and then rebalances ahead of the index…isn’t that a way to find alpha? I though the whole
Idea of factor investing was to overweight certain factors that historically favor growth…is that considered active weighting/investing or does that get included in the “index” fund…
Thank you in advance!
Thanks bro. New to your channel. Great content & production!
Thank you!
Well that would be impossible to do considering I'm in my late 50s and I'm more interested in investments that could set me up for retirement in my 60s, my goal is at least $2million.
As you plan your retirement, be sure to
talk with a financial advisor who can help you make the most of your retirement investing scheme.
@@LehmannAlicia Very true, If you're looking for help
building a retirement nest egg, you most likely want a certified financial planner with expertise in retirement planning. With the aid of a coach, I grew my reserve from $160k to almost $600k during this Red season.
@@LukeDiogo How can one find a verifiable financial Planner, I buy the idea of employing the services of a Financial Advisor because finding that balance between saving and living requires counsel.
@@LehmannAlicia KRISTIN GAIL CUNNINGHAM. On the internet, that’s the financial advisor I use. She’s verified; you could also read more about her and then communicate with her. it’s always good to do your research before putting your money into any investment.
@@LukeDiogo Thank you so much! Found her webpage and left a message. Hopefully, she responds.
Just subscribed and loving this videos 👏👏
So clear and concise Ben. Great content.
8:17 Even Warren Buffett has not managed to beat the S&P500 over the last 10 years. The days of finding undervalued stocks the way Buffett used to are long gone now. The market is far more efficient than it was 40 years ago.
We could have said the same thing about Buffett leading up to the tech crash. Buffett has done poorly relative to the S&P 500, but so have value stocks as a whole. If Buffett comes out beating the market for the next decade he will be more of a legend than he already is. If he doesn't, it will be another big blow to active management.
@@BenFelixCSI He should outperform the S&P500 over the next 10 years purely because he's sitting on a cash pile of $128bn and if a recession comes he will be in a position to pick up some bargains. If no recession comes (which is unlikely) he will probably just underperform as he has done lately.
@renegade_ace HAHAHAHAHA, change game!
@@hTyKn1 but WB didn't bought anything on the crash
Very interesting.
In 2005, I started investing each month and used 50% of my money to buy units in an index tracker. The other 50% went toward individual shares. Guess what? By 2010, my tracker had outperformed the individual shares.
Since then, I have invested in 5 separate global index funds - to keep costs down - and they are still performing nicely.
Having read a few Jim Slater books, I learned early on that 'managed' funds were not only more expensive, they rarely outperformed the index.
Here in the UK, the only managed product that I would have considered is the 'FundSmith' Fund, which is managed by Terry Smith.
Yes I agree. Thank you. A person is better off holding the majority of money in a low fee index and stock picking the remaining portfolio
@Ben Felix. Index funds are fine but you didn't mention which one. S&P 500, total US market or International? Do you think concentrating only on one country is almost as suicidal as individual stocks like happened to Japanese Nikkei when Japan was not so much different from how USA is now.
I love the point that the time to reach statistical significance effectively makes it impossible to find skilled active managers even if they do exist.
Agreed. Fascinating.
What about the argument (via michael burry) that the growth in index fund investing (in the US) over the years is inflating the value of those stocks in the index. In a negative market event, the rush out of lower volume stocks as a result of index selling could create a lot of negative volatility.
Additional Money is in and deflating the money no matter where it is comming from, no matter how it is allocated and no matter where to it leaves again. Not a tracker problem imho.
Tracker are despite their big noise are still a minority in the market. The last number I heard the value for all tracker on MSCI World combined is still within the standard deviation of the MSCI. Since there is more indexes with overlapping positions it would be interesting to see a global study of the total tracker value compared to the market. Maybe an economics undergrad would take the time to put it together.
But let's imaging the market is 100% trackers. The market would freeze to it's relative buying power. But as soon as as Tracker would go in high double digits the market would get so inefficient that the mystical "skilled manager" would actually have a good chance to beat the market -> Money gets reallocated to preferable "not so unicorn anymore funds" and the rat race starts over again.
With the current distribution of privately held stocks, managed funds and trackers I personally bet on the tracker.
Btw. Sorry it took 11 months to find the post and felt triggered enough to answer ;-)
Haha! Love how you titled this! So glad you couldn't convince me!
Ben. Would love to have your insight on real estate investing versus index funds for 20 year long term time line
Why do industry "experts" attack index funds? They know in their hearts the truth: Indexing over a long time will produce superior results, especially when you consider sales charges and expense ratios. Consider academia. Most support indexing. They draw their conclusions from hard, stubborn data. As a long time indexer now retired, I walk around with a smile on my face. Pick out a broad based fund (I like the Total Stock Market Index), stick with your plan, consistently invest, ride out the periodic storms, and then prepare for a nice retirement. Thank you Ben, for your always informative and excellent videos.
Thanks Sam. I think part of the problem is that many industry participants truly believe that indexing is a bad approach to investing. People are very good at rationalizing their world views, especially when those views are tied to their income.
The reason why I prefer ETF is basically i'm the person who control my money, whereas active fund manager are concerns about their commission fee. So even I screw up my ETF, at least it is my fault and I learn from it, so I will improve my investing strategy in future
Hi Ben. Do you think that investors should buy into indexes now even when they are at or near record highs and we are on a 10+ year expansion? In the case of a downturn it may take long to get back to where we once were, e.g. Nikkei index is still not back to all time highs 30 years later. What can we do if we are just getting into investing?
Great video. Title got me. Will check out your other videos.
"Superstar Fund Managers who flamed out hard to finish their careers" - Woodford Investment Management in England is a prime, recent example.
One of the co founders lives near me in the uk in a really ugly massive house. The whole neighbourhood knows what he’s done and hates him
@@TeamBiird Yes, Woodford sailed very close to the wind in many respects. If not illegal, certainly - to put it mildly - not enhancing to his reputation.
I have been screwed by five different financial advisors. Mr. Felix appears to be the first honest financial advisor I have ever known
F B Screwed by 5 financial advisors ! The definition of stupidity is following the same path & expect a different outcome. I have no idea how anyone can fail so often unless they have dimentia
Jeez, shots fired @Concerned Voter. Let’s try to be respectful.
@@mark.k7206 That is not the proper quote of Alber Einstein's famous assertion. It is insanity, not stupidity!
@@mark.k7206 Okay...
@FB. I would make sure you are putting your money with someone who is a fiduciary. They will be legally required to do what’s in your best interest.
What do you think about single payment or distributed one in buying etf, to cover the overpricing period ?
Hi Ben, awesome content, thank you! I am looking to start investing in index funds but am a bit confused about the whole "index fund etf "versus "index fund mutual fund" thing. I have been looking cursorily over vanguard's website and see they only mainly offer etf indexes. What is the major difference and am I still able to reap the same rewards of indexing if i put my money in an index etf? I really appreciate your help!
In terms of the exposure that you are getting an index mutual fund and an index ETF tracking the same index are identical. The differences are mostly in how you trade the units. I will do a video on this eventually.
Congrats on the promotion. I can now officially say I've watched your entire backlog of videos and I love the content.
I was wondering if you might touch on a subject that is tangentially related to this topic. Potential future video idea? What are your thoughts on entrepreneurship? In theory, it is directly opposed to the idea of indexing since you are investing a large portion (sometimes all) of your portfolio in a single business. Even worse, the startup entrepreneur is usually heavily leveraged in this investment.
I ask because I've been approached by multiple business "opportunities" ( I hate that term, sounds like a sales pitch) and wonder if there's any risk adjusted value in diverting some of one's portfolio into a personally owned business. The only value I see in this is that you are *somewhat* protected on the downside if you form an LLC.
Wow. Thanks for watching all of the videos. I can't sit through the old ones. I like to think the channel has improved since the early days. Perhaps I will look back on today's content in a few years and feel the same way.
I think that entrepreneurship is great but it takes a certain personality type and a decent amount of luck to be successful. I would always be skeptical of people presenting me with business opportunities. Most capitalists would keep an opportunity that great to themselves.
I have been pondering a video on human capital which this would fit into.
I've been reading and watching finance videos for a long time. The simple answer to wealth building is start now and stick to it. Don't worry about the ups and downs of the market that's unavoidable.
Keep about 4 months of living expenses plus a few extra grand in an emergency fund. Online savings accounts usually match inflation for you with a 2% yield.
Then if your employer offers a 401k with a match do that so you get the maximum employee match(If not skip that step). After that's done open a Roth IRA and buy ETFs. If you can't do a Roth open a traditional IRA and contribute enough to drop a tax bracket if possible( consult an account on that).
Why Roth? Do you think you will withdraw more money per year in retirement than you make now? Do you believe that the tax brackets will change so that you pay more in taxes after you retire even if you don't? I don't get that part, but the rest sounds good.
@@briankaul1201 I'll probably withdraw it all, personally. The best strategy is likely a combination of both a Roth account and a traditional account. Doing that would offer the most flexibility in retirement.
@@TheWizard856 So like, tax diversification? That makes sense. So you go traditional 401k, then Roth IRA? What sort of proportions do you plan to put in each and why?
Also, hey man, what are you talking about with inflation protected savings accounts? I thought the only instrument that protected against inflation were TIPS (inflation protected gov't bonds). Thanks
@@briankaul1201 I'd put enough in the 401k to get your maximum employers match. If your not doing that your essentially saying no thanks to a pay increase.
Then I max the Roth. That's about $500 a month of after tax money. I recommend a robo advisor such as betterment or wealthfront to start with. Later if you want more control over your investments and lower fees you can roll it over into a Vanguard account.
The online savings account does not protect your money from inflation. It does pay you 2% on it though and most years that covers inflation for you.
@@TheWizard856 Gottcha. Ok cool. Well that's some food for thought. Thanks man.
i was worried with the title but i am now relieved. thats a genius way to get views. great video😀
Great work Ben, you're my favourite channel on RUclips right now. Great researched info, good point of views and no clickbait thumbnails. Keep that way and you'll find a way to the top. All the best.
clicked on this days after buying an etf expecting to see that ive made a horrible mistake.
I’m sharing your videos with my Australian clients with the proviso that they are designed for a North American audience.
Thank you, George!
Great video mate. I always learn so much from your channel!
Thanks!
Came back to watch this a second time... It's so hard to unlearn. Your video is a perfect example of why my wealth-simple account is crushing my Motley Fool "best buy now" managed account. Live and learn, can't complain. "The habit of investing is what makes a person wealthy not the vehicles that they choose" - Someone
Maybe you just need more conviction on those stock picks! Joking obviously. Your experience is statistically expected.
50%OEF 50% QQQ, invest regularly, reinvest dividends, and forget about...
I prefer xlk on a drip. Main positions in Apple and Microsoft.
I prefer xlk on a drip. Main positions in Apple and Microsoft.
-Be me
-Watches like dozens of other videos in this channel
-Invests mostly in ETFs, some small cap
-Reads title of video
*Oh, poop*
-Watches video
*Phew!* Close one!
@benfelix does this apply to all indexes ? Or the the case is only strong for the DOW and S&P 500? Thank you
You explain things about stock market very clearly and simply. A newbie here.
How about building your own index fund and don’t actively trade? :)
Nice question, maybe someone would answer
@@azteroth haha wouldn't that be nice?
Ben, Thank you for your clear and thoughtful insights and arguments! Would you be able to make a video on your views about the Smith Maneuver? If it makes sense for cash damming through a higher interest HELOC to pay for your investment expenses (while getting the interest to be tax deductible) then using the investment income to pay down the principal portion of the mortgage on your primary residence. Does it make financial sense and is it tax efficient in any interest rate environment (i.e. such as the current low-interest-rate environment)? What are the risks to watch out for?
Hi Ben, at 3:40 (quality of a company does not equal quality of stock returns” - could you please give a reference or references? Thanks, mate!
Is may 2019 a good time to enter to market investing in index funds? Taking into account of the current economics state.. or should average investors do a monthly contribution regardless of the economic state?
Elliot Rodger I recommend you read « a simple path to wealth » by JL Collins. Easy read, simple practical advice.
Investing is for the medium to long term. If you need the money in under 5 years, save instead.
knew it was clickbait right from reading the title yet here we are! :)
This is why I think Ramsay is a scammer. He tells people to buy managed funds that beat the S&P... Because he is trying to sell his own managed funds.
wow for real can i get some sort of vid of d. ramsay mentioning this
@@jpaspaspas he refers everyone to his smart Vestor pros and he gets a commission, its been know for years
Hi Ben, could you talk either in a video or in the podcast about the differences in the replication methods of the ETFs? Is one replication method preferred? Also, how much tracking error could be considered acceptable? Thanks!
Ben, Is there any more risk going with the ETF version of a Vanguard index fund? For example VTI vs VTSAX. Why do I feel like I should go with VTSAX over VTI? Your thoughts please. Thx.