ETF Prime Podcast

Listen to The ETF Store Show every Saturday at 4pm on KCMO Talk Radio 710AM as we cover everything you need to know about Exchange Traded Funds and the world of investing.

On our most recent radio show, we delved into an area of investing that some people may find intimidating - investing in bonds (or fixed income).  Our experience is that many people understand what a bond is, but they may not know exactly where to begin when deciding which bonds to invest in.  During our broadcast, we discussed the current bond market in general and more importantly, why investors should strongly consider ETFs for the fixed income portion of their portfolio instead of trying to select individuals bonds or use actively managed fixed income mutual funds.  Using either of the latter two options is typically a recipe for underperformance.

Passively managed funds like ETFs, which track bond indexes like the Barclays Capital US Aggregate Bond Index, can be significantly cheaper than actively managed mutual funds and avoid the risk of manager underperformance.  Gaining broad fixed income exposure very inexpensively, while minimizing the risk of manager underperformance, is the winning combination that we look for at The ETF Store.  We also discussed some specific bond ETFs that you can consider for your portfolio including BND, TIP, MUB, and PCY.  Listen to the full show here to learn more about investing in fixed income ETFs.

Listen to The ETF Store Show every Saturday at 4pm on KCMO Talk Radio 710AM as we cover everything you need to know about Exchange Traded Funds and the world of investing.

On our most recent radio broadcast, we explained why you should consider consolidating all of your investment accounts under one roof if you have accounts with multiple firms or advisors.  While this strategy can make sense in some cases, particularly for high net worth investors, it can be a huge detriment for the majority of people.  Chief among the many concerns of this approach is a lack of an overall investment plan.  It can be extremely difficult to have a well-rounded, properly diversified portfolio if you have too many cooks in the kitchen.  And this is to say nothing of the various fees, mess of statements, multiple account logins, and various calls from advisors that come with this “strategy”.

If you’re someone who has investment accounts scattered across town, it’s time to round them up and put a real investment plan in place.  We explained how The ETF Store can help you do this by combining your investments under a single custodian (such as Charles Schwab) and implementing a customized investment strategy across all of your accounts, potentially with much lower costs (and fewer headaches) than you currently have.  Listen to the full show here to learn more about why you should consider consolidating your investment accounts with one firm and how this could make tracking your investments so much easier.

Listen to The ETF Store Show every Saturday at 4pm on KCMO Talk Radio 710AM as we cover everything you need to know about Exchange Traded Funds and the world of investing.

On our most recent radio broadcast, with tax day 2012 looming, we explained how ETFs can reduce your tax bill.  Because of their legal structure and minimal trading, ETFs typically distribute very little, if any, capital gains to investors.  In contrast, many mutual funds distribute capital gains – sometimes even if the mutual fund is down for the year!

So, why is this case?  Take the following example:  Let’s say there’s a mutual fund shareholder that wants to sell their mutual fund shares because they need cash to buy a house.  The mutual fund manager may need to sell shares of stocks held by the fund to raise cash to meet this shareholder redemption request.  When the mutual fund manager sells shares of stocks owned by the fund for a gain, the mutual fund is required to distribute those gains to all mutual fund shareholders.  So to recap, if you’re a shareholder of the mutual fund and another shareholder redeems their mutual fund shares, you may be penalized with a taxable capital gain distribution even though you didn’t do anything.  That hardly seems fair.  And what’s worse, these capital gain distributions are “phantom gains” in that the share price of a mutual fund is reduced by the amount of the capital gain distribution.  So net-net, shareholders haven’t gained anything other than a tax bill.

Contrast that with ETFs where a shareholder wanting to raise cash can simply sell their shares on the stock exchange with no impact to you.  There are instances where ETFs may reconstitute or rebalance holdings, thus generating a capital gain distribution, but those instances are rare.  Recent data from Morningstar on capital gain distributions showed that over the last five years, looking at the large blend fund category, active mutual funds paid out capital gain distributions equal to 1.92% of the fund value while ETFs paid out 0%.  That’s a big difference come tax time.

We also discussed tax loss harvesting strategies with ETFs and talked about some portfolio construction considerations when using exchange traded products.  Listen to the full show here to learn more about reducing your taxes by using ETFs.

Listen to The ETF Store Show every Saturday at 4pm on KCMO Talk Radio 710AM as we cover everything you need to know about Exchange Traded Funds and the world of investing.

On our most recent radio show, we discussed the importance of minimizing your investment costs and explained why, unfortunately, many brokers are effectively incentivized to push expensive mutual funds in your portfolio.  An easy way to combat these commissioned brokers, many of whom are more concerned about their financial future than yours, is to use an independent Registered Investment Advisor (RIA) who uses passively managed investments such as ETFs.  The ETF Store can be the alternative to your money-grabbing broker – we’re an independent, fee-based RIA that focuses on building highly diversified, low cost portfolios using ETFs.

We encourage everyone to call their advisor today and have them explain to you exactly what you’re paying for your investments and their investment advice.  You might be unpleasantly surprised at what you find out.  Learn more about how to reduce your investment costs by listening to our full show here.

Listen to The ETF Store Show every Saturday at 4pm on KCMO Talk Radio 710AM as we cover everything you need to know about Exchange Traded Funds and the world of investing.

On our most recent radio show, we discussed the recent headlines dominating the financial news including the Dow Jones Industrial Average finally crossing over the 13,000 mark, the potential bursting of the “bond bubble”, the signs of life in the housing market, the stunning performance of Apple stock, and the upcoming presidential election.  In addition, we examined how several ETFs are responding to these headlines and provided some thoughts on how you might position your portfolio.

We also answered several of your questions, including an interesting inquiry on whether it’s better to invest in the precious metals ETFs (such as GLD and SLV) or the related mining ETFs (GDX and SIL).  Listen to our full show here.