Buying ETF- what should I consider?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Galleygal
Posts: 7
Joined: Tue Jun 07, 2022 10:56 pm

Buying ETF- what should I consider?

Post by Galleygal »

If I’m buying an ETF (VTIP in this case), do I need to concern myself with anything other than the market price when I place the trade? For instance, the spread or intraday price, etc.

Concerning VTI, if I purchase today and tomorrow is Ex-Date, I believe I will not get the dividend, correct?

It seems there is more to buying ETFs than mutual funds, so maybe a beginner should stick with mutual funds. This is all in my IRAs.

I think I have paralysis by analysis. I’m a novice who pulled my portfolio out of “managed” last week and it’s in cash and I’m afraid of making a mistake.
User avatar
retired@50
Posts: 8409
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Buying ETF- what should I consider?

Post by retired@50 »

If you already know and understand mutual funds, then I see no reason switch to ETFs.

If you want to educate yourself on the topic of ETFs, that's okay too, but do it at your leisure, not the day before you place a trade. :shock:

More reading... For the day after you've purchased the mutual funds in your IRA.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
https://www.bogleheads.org/wiki/Bid/ask_spread
https://www.bogleheads.org/wiki/Net_asset_value

https://www.fidelity.com/learning-cente ... ounts-etfs
https://www.fidelity.com/learning-cente ... ds-volumes

Regards,
This is one person's opinion. Nothing more.
exodusNH
Posts: 4307
Joined: Wed Jan 06, 2021 8:21 pm

Re: Buying ETF- what should I consider?

Post by exodusNH »

Galleygal wrote: Wed Jun 22, 2022 10:53 am If I’m buying an ETF (VTIP in this case), do I need to concern myself with anything other than the market price when I place the trade? For instance, the spread or intraday price, etc.

Concerning VTI, if I purchase today and tomorrow is Ex-Date, I believe I will not get the dividend, correct?

It seems there is more to buying ETFs than mutual funds, so maybe a beginner should stick with mutual funds. This is all in my IRAs.

I think I have paralysis by analysis. I’m a novice who pulled my portfolio out of “managed” last week and it’s in cash and I’m afraid of making a mistake.
In your IRA, it doesn't matter when you buy VTI. The dividend has no tax consequences. If were in a taxable account, you'd want to wait until tomorrow to buy VTI to avoid "buying the dividend."

VTIP and VTI are both very liquid and trade within a small spread. Just submit a market order between 11 AM and 2 PM to avoid the rapid movements at open and close.
Topic Author
Galleygal
Posts: 7
Joined: Tue Jun 07, 2022 10:56 pm

Re: Buying ETF- what should I consider?

Post by Galleygal »

Thanks to both of you. And you’re right Retired@50. I’m getting in the weeds.
Call_Me_Op
Posts: 8651
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Buying ETF- what should I consider?

Post by Call_Me_Op »

Most important thing in my view is to use limit orders - never a market order. Also, if possible, stick to ETFs with higher trading volume.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
User avatar
KingRiggs
Posts: 965
Joined: Wed Dec 12, 2018 12:19 pm
Location: Indiana

Re: Buying ETF- what should I consider?

Post by KingRiggs »

If one sticks to heavily-traded ETFs like those recommended for the 3-fund portfolio, limit orders will do little other than add complexity. Market orders work just fine.
Advice = noun | Advise = verb | | Roth, not ROTH | | "Remember, there's always money in the banana stand." - George Bluth, Sr.
Post Reply