ETFs vs Mutual Funds – Which is Better?

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Today we’re going to start by talking about the differences between ETFs (Exchange Traded Funds) and Mutual Funds.  Then, we’ll wrap this series on funds up by talking about when one or the other might be more appropriate.  For those who missed our earlier segments, you can check out our mutual fund primer as well as our article on key things to consider when purchasing a fund.

Investing Objective

One important difference between mutual funds and ETFs is very few ETFs are actively managed, while the majority of mutual funds are.  So, if you are looking to match the performance of a particular benchmark index, your primary options are ETFs or index funds (a specific type of mutual fund).  If you are hoping to beat the index, you will most likely look towards a mutual fund.

Trading

How you buy and sell these assets in one of their biggest differences.  Funds are bought and sold through the fund company and are only traded once per day.   ETFs are traded on public exchanges and trade throughout the Continue reading…

    5 Key Things to Consider When Buying a Mutual Fund

    Key Mutual Fund ToDos

    In the second part of our series on mutual funds, we’re going to talk about 5 key things you need to look out for before you purchase a mutual fund.  If you need a little more background on what a mutual fund is and how it works, you may want to check out “The Basics of Mutual Funds” first.

    Costs

    Costs come in many flavors, some very obvious and some much less so.  The most common types include loads, on-going expense ratios and trading costs.

    Loads

    There are two types of funds: load and no-load funds.  Load is just a fancy term for a sales charge.  Traditionally brokers were the ones selling load funds and their compensation was the load.  Loads can be structured as either   Continue reading…

      The Basics of Mutual Funds

      Mutual Funds - Collection

      Despite the rising tide of exchange traded funds (ETFs), mutual funds are still the most popular investment choice among individual investors.  At the end of 2012, there were over 13 trillion dollars invested in funds.  For our latest investor series, we will be covering the ins and outs of funds in more depth.  Today’s post will focus on some of the important concepts and terminology.  Then, we’ll cover some of the key things to think about when purchasing a fund, and finally, we’ll close the series with a comparison between funds and ETFs.

      What is a Mutual Fund?

      A mutual fund is simply an investment vehicle that pools a bunch of investors’ money to purchase securities according to a stated investment policy.  Investors purchase shares in a fund and the fund has a price, called the NAV (Net Asset Value).  The big difference between mutual funds and most other types of securities is that mutual funds do not trade throughout the day, and their price doesn’t fluctuate based on supply and demand for Continue reading…

        Your financial future – Welcome to our shared mission

        Invest in your financial future

        Hello,

        Welcome to the Wealthminder blog, your source for a better financial future. Over time we hope to provide you with a compelling mix of education and insight. But before we get rolling, I’d like to use this initial post to tell you a little bit more about what Wealthminder stands for and what we hope to accomplish.

        Our mission is in some respects a very simple one.

        Help individuals achieve their long-term financials goals

        Now, I’m sure a lot of you immediately said “Hey Rich, isn’t that what every financial services firm promises?”. And it’s true. But I would ask you, how well do you feel most of those firms are doing at delivering on that promise?

        So, what are our core beliefs and how will Wealthminder be different. Continue reading…