You’re probably familiar with mutual funds. They are arguably the most common type of investment choice for 401(k) and other retirement accounts. But ever since the first exchange-traded fund (ETF) appeared in 1993, investments into ETFs have been steadily overtaking those into traditional mutual funds. Why is this happening? Are ETFs better than mutual funds?…
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One year ago I wrote about the stock market predictions that major investment banks and brokerages seem to feel is a necessary part of their marketing (see https://www.cognizantwealth.com/2024/01/10/a-review-of-2023-stock-market-predictions/ ). Why they spend the time, effort, and money to come up with these guesses is a mystery to me, particularly because those predictions are almost always…
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At the turn of the 21st century the majority of mutual funds that invested in equities (stocks) utilized what is called active management. That is, fund managers chose some subset of all publicly-traded companies in which to invest and also decided when to rebalance the various positions held in the fund. The purpose was to…
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The short answer is yes. If a mutual fund or exchange-traded fund (ETF) becomes unprofitable, fund company management may choose to shut it down. And given how competitive the fund market is, with well over ten thousand funds available today, this happens more often that you might think. What are the risk factors? One of…
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I previously wrote about the impossibility of successfully beating the S&P 500 through market timing. But many people are still afraid to invest in stocks, especially when the market is setting new highs, for fear of buying just before a major market drop. If you can’t time the markets, what can you do to avoid…
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