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Financial Products & Services / Exchange-Traded Funds (ETFs)
|Subject: Re: What Are the Tax Advantages (If Any) of ETFs||Date: 9/27/2005 3:37 PM|
|Author: jbking||Number: 1060 of 2213|
OK, what else is there?
Well there are also closed-end funds, http://www.cefa.com being a resource about them, and structured products if you look on http://www.amex.com , note that is the site about the American Stock Exchange and not American Express. There is also real estate if you want a whole other avenue of potential investments.
These ETFs are being promoted as a good way to invest - but in the short term?
Sure, there are those that trade ETFs in the short term. Since you can buy and sell them like stocks you can use limit orders for when to buy and trailing stops for when to sell compared to mutual funds which can only be bought at some future NAV. What is so bad about this if you have the $10K or so to trade and want to spread this over a few ETFs?
The broker sites I've been accessing are promoting ETFs the same they promote DRIPs; i.e., you can invest small amounts of your money over a long period of time. Problem: each time you do this, you pay a commission.
Some sites like Sharebuilder allow for fractional shares and thus aren't quite as bad as others where you would have to buy in whole numbers of shares. Of course this is the question of what are we calling small here. For some folks anything under $1,000 is small while others would say under $100 is small...
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