New answers tagged etf
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A properly functioning market will balance supply and demand and sellers by having prices rise in response to excess demand and fall in response to excess supply. Rising prices will encourage sellers to increase production and encourage buyers to find alternatives, while falling prices will encourage sellers to reduce production and encourage buyers to find ...
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If mean-reversion does not exist:
It does not.
Why were the returns for the 10 years following the 2008 recession unusually high?
Because after the market finishes going down, it goes up. That's what it means to "finish going down". Similarly, after it finishes going up, it goes down. That's how we know when it finished going up.
So it went down. Then, ...
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The market is within an epsilon, less than the vig you pay a broker, to being totally random and unpredictable. This was shown in an IEEE paper some 30-40 years go.
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It is always possible if you invest a large amount of money now that value will suddenly decrease. However, you don't want to wait until there is a large decrease before investing, because that could be a long time in the future, and depending on what happens in between, the next big drop might even 'bottom out' at a higher level than present day.
The ...
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Mean-reversion itself is a purely statistical phenomenon that follows simply from the fact that if you make a random draw that is close to the tails of a distribution (further from the mean), the likelihood the next draw is even further along the tail is less than the likelihood that the next draw is closer to the mean. That's all it is. It "exists" in the ...
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Market prices can be high or low compared to the past, but the only thing we know about the future is, that the price is most likely wrong meaning that it's not equal to the true value of the stock which is unknown.
That dot on the chart which indicates the price of a stock is a reflection of the trades that took place at that price. If the price shows $10 ...
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Many stock indexes are capitalized-weighted which makes them momentum funds of current trends. And so the historically recent double-tops or triple-tops don't have a lot of technical meaning. The index will just re-balance on pull-backs and ride the new balance back-up. One potential problem would be that there are no trends but just that everything is down. ...
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The common expression in retort would be "Time in the market beats timing the market."
Meaning: On average, the stock market rises [because on average, the global economy is expanding as outputs continue to increase] - a common rule of thumb for North American markets would be 7% / year, after factoring inflation. This general rise beats out the average ...
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No one can predict when the market will correct or how far it will drop but you can certainly react to that if you are not fear based or uninformed. This assumes that it's not a one day event like 1987 (down 22%) when everyone is the proverbial deer in the headlights but rather a 50% drop over 15-18 months (see 2000 and 2008).
If you are concerned about ...
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Where I live (Finland), stock market is high but not as high as in the US. On the other hand, there is no good alternative for stocks because bond yields are negative! So, compared to the bond market, the stock market is not at all that high.
The problem in general with timing the market is that if you time the market, you spend less time in the market. ...
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If mean-reversion does exist, am I correct to say that timing the market is likely to reap great rewards?
Sure!!!
Just one problem: you can't time the market.
why do so many people think it's a bad idea to invest when the market is high
Because "they" think that the market will crash Real Soon Now.
and a good idea to invest when the market is low?
...
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I have received hundreds of dividends on preferred stocks over the past 20 years and the vast majority of them pay quarterly dividends that have more than two decimal places. The total amount of the dividend received on the Pay Date was rounded out to the nearest full penny. While it makes no difference who does it, I suspect that it is the issuer who is ...
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If you are an EU citizen and NOT an US citizen, https://justetf.com is meant for you, and I found IE (Ireland)-domiciled versions of several Vanguard and iShares funds. The fees for IE-domiciled Vanguard funds are somewhat higher than the US-domiciled ones, but not outlandishly so - 0.07% vs. 0.03% for Vanguard's S&P 500.
Key: the ISIN should begin with ...
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does the ETF turnover rate still matter ?
Yes. ETFs are not "retail traders" but "institutional traders" and will have different fee structures. Plus they have implicit transaction costs when rebalancing by having to pay the bid price when selling and the ask price when buying (called "crossing the spread").
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Yahoo is notorious for providing bad data. If you go into the Historical Data that they provide you'll see that on one day the closing price is around 28p and the next day it is arould 2,400p
Try this on for size: CHART
Here's a sample of the bad data:
Jul 03, 2017 29.08 29.09 29.08 29.09 27.35 990
Jun 30, 2017 2,547....
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In general that is true, but most ETFs have market makers which will keep the bid-ask spread close to the underlying value.
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On the other hand, ETFs are traded like stocks, so if you want to sell it you might find that no one wants to buy it.
Well someone will almost certainly want to buy it, but maybe for slightly less than its net asset value. Otherwise there would be an arbitrage opportunity to buy the ETF very low and short its constituents.
If liquidity is a concern then ...
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This is true only for "financial ETFs", where John buys a paper which in turn "guarantees" him "ownership" of another paper.
Remember, there is physical ETFs where an actual metal is being reserved for any bought share. But the ETF managers do not hold any responsibility over it, because it is passed to "custodian", who is actually just another "investment ...
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Behind the scenes on the back end, the broker has determined that, due to the increased demand by John, he as an authorized participant must create new ETF shares. He is now short the ETF shares since he sold them to John.
Normally, it is assumed that the broker has the ETF shares he sells, and if he runs out of them, he creates new ones via the ...
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This is actually noted in the fact sheet for the fund:
The management fee is equal to the fee paid by the Vanguard fund to Vanguard Investments Canada Inc., and does not include applicable taxes or other fees and expenses of the Vanguard fund.
This Vanguard fund invests in underlying Vanguard fund(s) and there shall be no duplication of management fees ...
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Most investment funds fees charge according to Net asset values(NAV). I.e., your investment will rise or fall over time, the charges are based on closing asset value.
According to this UK vanguard fees page, the account fees are capped to £375 and free if the NAV is above £250,000. For the complete charges information, you should read this costs table. ...
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No, your MER on VFV is 0.08% the reason why it’s higher than the 0.03% is that if you held the underlying asset VOO you would be subject to foreign withholding fees.
You can actually use this to your advantage though by buying VOO in your RRSP (which allows you to waive the foreign withholding fees because it’s a retirement account) and holding VFV in your ...
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Im assuming you’re in the UK? I’m not sure what the .15% account fee is you’re referring to but assume it’s something your brokerage firm charges?
The ETF itself has an expense ratio of .07%, which is deducted from the etf itself vs deducted from your account.
An ETF has no say regarding what fees are charged to buy or sell its shares. If there is a ...
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Yes.
For example this Investors Chroncile article cites a number of overseas-focused ETFs as options to put in an ISA.
10 passive funds for your ISA
Individual providers will be able to confirm the position for specific funds.
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Anything held in an ISA is tax sheltered and therefore subject to the tax reliefs (income tax, no Capital Gains tax etc.)
This is true even when you hold stocks of non-UK countries directly, e.g. Microsoft.
There are some types of investment that cannot be held in an ISA (for example, until August 2013 you were not allowed to hold AIM stocks within an ISA)....
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