Exchange Traded Funds: 7 Reasons They Beat Most Mutual FundsWritten by David A. Twibell
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Fourth, ETFs give you more flexibility than mutual funds. They can be bought and sold through your broker without restriction during trading day, just like a traditional stock. This provides investors with significant flexibility compared to mutual fund investors, who cannot engage in transactions during market hours. Fifth, ETFs allow you to more easily customize your portfolio than you can with passively managed mutual funds. Today, there are over 150 ETFs sponsored by a variety of institutions, including SelectSector SPDRs (State Street Global Advisors), iShares (Barclays Global Investors), HOLDRs (Merrill Lynch), and VIPERs (Vanguard). These ETFs focus on dozens of different market sectors, from bonds to technology, and everything in between. As a result, investors can mix and match them to achieve a desired portfolio balance, emphasizing certain sectors while staying away from others depending on market environment. Sixth, ETFs are more cash efficient than mutual funds. Since ETFs don’t need to maintain a cash position to satisfy redemptions, they can be fully invested in securities. This usually allows them to outperform a mutual fund with a corresponding basket of securities, but which incurs a substantial cash drag. Finally, ETFs offer more sophisticated hedging options for experienced investors. Because ETFs can be bought on margin or sold short like a stock, they allow experienced investors to implement sophisticated hedging, market-neutral, and other alternative investment strategies. Exchange traded funds aren’t for everyone, though. Because they are traded on stock exchanges, you incur a brokerage commission when you purchase or sell them. As a result, if you are making small regular contributions to your investing account, you’ll end up being swamped in commissions. For more information about exchange traded funds, you can go to ETFConnect (www.etfconnect.com) or American Stock Exchange website (www.amex.com). Or, feel free to take a look at my recent white paper entitled Exchange Traded Funds: Investment And Hedging Strategies at (www.flagship-capital.com).
David A. Twibell is president of Flagship Capital Management, an investment advisory firm in Colorado Springs, Colorado. Flagship provides portfolio management and wealth planning services to individuals, corporations, and non-profit entities. For more information, please visit www.flagship-capital.com.
| | Choosing A Forex BrokerWritten by Geoff Turnbull
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Support Forex is a 24 hour market, so your broker should offer 24 hour support. You might not be trading at 3am, but that could be what time it is in your brokers head office on other side of planet, so make sure there will be somebody there to pick up phone if things go wrong. You should also check if you can close positions over phone - essential in case your PC or internet connection crash at a critical moment. Backing Finally, before opening an account do a little homework and find out about company. Forex brokers are regulated, but that doesn't mean they all have equal backing. If market collapses, you want to know that they've got reserves to cope with it and will still be around when you decide to withdraw your cash. If a broker is elusive when it comes to questions about their parentage and financial backing, then steer clear. In Conclusion Choosing a forex broker isn't difficult, but don't rush decision. Check out a few, and always get a demo account first to make sure you're happy with way everything works before sending off your opening balance.
Geoff Turnbull is a full time day trader, and a contributor to http://www.forexheaven.com
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