Tax, if not careful, can shoot low-cost investing in the foot.
Selection, strategy and portfolio construction aside, how do we answer the initial question: ETF or mutual fund (aka. unit trust)?
If you scratch beneath the surface, it’s not all rosy in the world of bond index ETFs. There are structural challenges in investing in bonds passively
‘Passive’ and ‘index fund’ are usually joined at the hip, but in reality, the underlying components of an index fund are far from passive...
The rise of low-cost ETFs has been a huge boon to investors, but it is important to understand some of the other more hidden transaction costs..
Wouldn’t it be great if every time you made a poor decision in life, you could just rewind and erase it? Turns out - this actually happens in the fund
I recently tried to shop on Lazada. I typed ‘cushion’ into the search box, and it returned 963,138 items. Did I want the nautical stripes, flamingo..
The car salesman has finally convinced you to join the Tesla cult. As you take your new Model S out for a spin, you’re asked to pay a 3% fee for the key (upfront fee), and another fee if you decide to sell the car (exit fee). Of course you expect to pay operating costs such as electricity, maintenance, insurance (expense ratio), but then you find out part of those operating costs are actually paid back to this salesman who sold you the car for as long as you own it (trail fee).
Everything about the other person is perfect in the first few weeks of dating. Short of kicking puppies, there is pretty much nothing your new person can do wrong. Even habits that you already know will annoy you one day are temporarily adorable. But just like a new relationship, most investors don’t care about the details of what they invest in and don’t try to find out more. Although ETFs aren’t exactly new to the market, growth in the industry has been astronomical over the last few years. As everyone fawns over ETFs and jumps on the bandwagon, it’s important to take the love goggles off and make sure you know what you’re buying.