ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

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typical.investor
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ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by typical.investor » Mon Apr 15, 2019 8:03 am

ByThePond wrote:
Mon Apr 15, 2019 7:29 am
Earl Lemongrab wrote:
Fri Apr 12, 2019 11:40 pm
ByThePond wrote:
Fri Apr 12, 2019 5:17 pm
ETFs are grape bricks.
Aptly and hilariously put. Much like ordering a diet coke to accompany a double beef Whopper and super-sized fries. Pretty un-Boglehead IMO.
Absolutely ridiculous. I can't stand these comments about "anti-Boglehead". There are MANY of us on the forum with good index portfolios that are composed of ETFs. Why would you be so insulting to the people here?
Sorry you feel that way.

However, I agree with Nisiprius that there is an element that seems contrary to buy-and-hold inherent in an instrument that is designed to be traded. Not that they can't be useful.
I don't think that's ridiculous at all. Nothing "anti-Boglehead" at all, and nothing insulting implied.

Being called "absolutely ridiculous" , however, IS explicitly insulting.
It is ABSOLUTELY RIDICULOUS to suggest ETFs are similar to Grape Bricks which were a means to circumvent the law.

I am an American and as such, am effectively prevented by law from both buying mutual funds and investing in overseas funds as I work where my employment has taken me. To suggest that, in following the letter of the law, I am similar to a person who deliberately chooses a product that is designed to break the law is absolutely ridiculous. It's beyond absurd and patently offensive.

I have not chosen ETFs as a vehicle to circumvent the law. Isn't that what Grape Bricks were? A way to break a law you didn't agree with. Why should I be viewed through that moral lens?

I would also suggest it's contrary to Bogleheadism to pay more than you have to for a fund and to pay more in taxes than you should.

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goodenyou
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ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by goodenyou » Mon Apr 15, 2019 8:41 am

Maybe ETFs are like medicinal marijuana. Used by some for (possibly) the right reasons, but abused by others.
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ByThePond
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ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by ByThePond » Mon Apr 15, 2019 9:44 am


It is ABSOLUTELY RIDICULOUS to suggest ETFs are similar to Grape Bricks which were a means to circumvent the law.

I am an American and as such, am effectively prevented by law from both buying mutual funds and investing in overseas funds as I work where my employment has taken me. To suggest that, in following the letter of the law, I am similar to a person who deliberately chooses a product that is designed to break the law is absolutely ridiculous. It's beyond absurd and patently offensive.

I have not chosen ETFs as a vehicle to circumvent the law. Isn't that what Grape Bricks were? A way to break a law you didn't agree with. Why should I be viewed through that moral lens?

I would also suggest it's contrary to Bogleheadism to pay more than you have to for a fund and to pay more in taxes than you should.
I have to agree with almost everything you say. Including that it's ridiculous to equate ETFs with lawlessness. And others have pointed out other valid reasons to use ETFs.

However, speaking only for myself, I didn't see the grape brick analogy as having anything to do law breaking , although you are right. Rather, It struck me as as illustrating a curious disconnect between two philosophies: buying and holding instruments that were designed to be traded. It's useful, but it sounds funny on the surface. I still think that. Nothing more, nothing less.

Nobody said anything about insulting those who use ETFs, or breaking laws or morality. To take offense at those issues from the analogy is, I think, reading a bit much into it. And I think we're getting dragged into much ado about nothing.

Whakamole
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ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by Whakamole » Mon Apr 15, 2019 9:56 am

goodenyou wrote:
Mon Apr 15, 2019 8:41 am
Maybe ETFs are like medicinal marijuana. Used by some for (possibly) the right reasons, but abused by others.
Not all mutual funds are pure. Anyone else remember the Steadman Funds?

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unclescrooge
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ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by unclescrooge » Mon Apr 15, 2019 1:28 pm

GoldenFinch wrote:
Sat Apr 13, 2019 8:06 am
I only own ETFs at Schwab and I have found them to be annoying. I cannot use them to rebalance effectively because if I sell one, the shares “are not available to trade” for several days. I realize this may be unique to Schwab, but I’ve given up on them for future use.
You would probably experience the same issue with mutual funds

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Re: ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by jbranx » Mon Apr 15, 2019 1:58 pm

{This topic is now unlocked. I deleted a post on "grape bricks" as a member requested and revised a topic heading that I had entered. Moderator Jbranx.}

Dead Man Walking
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Re: ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by Dead Man Walking » Mon Apr 15, 2019 6:17 pm

Before I buy a fund, I look at the fund’s portfolio. I’ve noticed that many active funds often have a position in an ETF that is within the scope of its investment objectives. The manager may be using the ETF rather than cash as he waits for a buying opportunity that interests him. That would be an interesting twist on the old adage that time in the market is the best form of market timing.

DMW

typical.investor
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Re: ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by typical.investor » Mon Apr 15, 2019 8:15 pm

GoldenFinch wrote:
Sat Apr 13, 2019 8:06 am
I only own ETFs at Schwab and I have found them to be annoying. I cannot use them to rebalance effectively because if I sell one, the shares “are not available to trade” for several days. I realize this may be unique to Schwab, but I’ve given up on them for future use.
If you sell an ETF at Schwab, the money is immediately available for reinvestment. It’s no problem.

You can’t sell SCHF and buy SCHB and then sell SCHB before SCHF settles in a few days. Well you can, but it’s trouble, so don’t do it.

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Earl Lemongrab
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Re: ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by Earl Lemongrab » Tue Apr 16, 2019 2:22 pm

ByThePond wrote:
Mon Apr 15, 2019 7:29 am
However, I agree with Nisiprius that there is an element that seems contrary to buy-and-hold inherent in an instrument that is designed to be traded. Not that they can't be useful.
I have no idea why, after this long, you want to come back and restart it. But, yes it's ridiculous to say, "it can be use for trading, so if you use for anything at all you're not a Boglehead."

You keep saying, "designed to be traded" as if it were horrible. That just means that ETFs are designed to be traded on the open market on regular exchanges. It doesn't mean "frequently traded" or "day traded" or anything else. Just that these products are available to all investors without the rules of the mutual fund companies.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

ByThePond
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Re: ETFs vs. Mutual Funds ("Bogleheads Mentioned in the NYT")

Post by ByThePond » Wed Apr 17, 2019 8:28 am

Earl Lemongrab wrote:
Tue Apr 16, 2019 2:22 pm

I have no idea why, after this long, you want to come back and restart it.
I explained myself already. Twice. I think people are making too much of a trivial, lighthearted post. Let's let it rest. I shall.
btw, I don't always read and reply to this site on a daily basis. So sometimes there's a lag in responding.

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