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What is the problem

wet_suit_one

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Aug 6, 2005
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With exclusively investing in a dividend ETF for the long term? You get regular cash flow, solid companies (and the lousy ones leave the index) and capital gains.

Yeah you may not get the maximum return, but you get a guaranteed positive cash flow with solid large companies that dominate the market and ...

So where's the downside?

Inquiring minds want to know.

Thanks.
 

blackrock13

Banned
Jun 6, 2009
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With exclusively investing in a dividend ETF for the long term? You get regular cash flow, solid companies (and the lousy ones leave the index) and capital gains.

Yeah you may not get the maximum return, but you get a guaranteed positive cash flow with solid large companies that dominate the market and ...

So where's the downside?

Inquiring minds want to know.

Thanks.
Not much you pretty much summed it up. The problems arise when someone wants to invest only in 'ethical funds'; no can do as you don't really know if the companies listed aren't owned byanother mega umbrella company who doesn't really fit the definition.

You still have to have wide exposure to the markets to spread your risk.
 

hinz

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Nov 27, 2006
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Can someone tell me the difference between ETF and Index funds?
index funds-passive mutual funds that track the benchmark and the performance will match to the index minus MER, usually less than 1% and no load. There's no guess work from the fund managers, i.e. no extra cash to pay those managers to gamble your money or trailer to bribe your "adviser" to pick this "investment" for you.

ETF-index funds traded like stocks. The MER is usually 50 basis point less than index funds but you need to pay commission ($4.95 to $29) at discount brokerage. In a way you get FE and DSC everytime you trade and it's not a good candidate for dollar cost averaging and dividend/distribution reinvestments.

The rule of thumb is if you have less than $100K investable asset, it makes more sense to invest in index funds. Anything more than $100K you are better off to use ETFs.

As far as Dividend ETF is concern, the downside is there's no guarantee to increase the dividends like clockwork. There's always risk of dividend cuts and even scrapping the dividends altogether. For the prefer, there's no upside potential while sharing the same downside risk.

BTW, the MER for dividend ETF here in Canada is still 15 to 25 basis points more than their American cousin. This is also true for "vanilla" indexes both sides of the border, say XIU (0.17%) vs. VTI (0.07%)
 

duang

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Apr 17, 2007
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index funds-passive mutual funds that track the benchmark and the performance will match to the index minus MER, usually less than 1% and no load. There's no guess work from the fund managers, i.e. no extra cash to pay those managers to gamble your money or trailer to bribe your "adviser" to pick this "investment" for you.
Give it up already buddy. It's getting tiresome when you fixate on your little obsession about advisors all ripping you off. Go back to therapy. It's too bad because you have lots of good points but you're just weakening your credibility with your unbalanced perspective on this one point.

Just because you are scornful of advisors doesn't mean everyone is as capable of managing their own financial affairs. You're obviously intelligent; why can't you understand that it's not so black and white as you like to pretend?

Relax and just share your nonjudgemental insights instead of trying to drag everyone to your isolated viewpoint.

D.
 

chiller_boy

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Apr 1, 2005
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Give it up already buddy. It's getting tiresome when you fixate on your little obsession about advisors all ripping you off. Go back to therapy. It's too bad because you have lots of good points but you're just weakening your credibility with your unbalanced perspective on this one point.

Just because you are scornful of advisors doesn't mean everyone is as capable of managing their own financial affairs. You're obviously intelligent; why can't you understand that it's not so black and white as you like to pretend?

Relax and just share your nonjudgemental insights instead of trying to drag everyone to your isolated viewpoint.

D.
Except that his viewpoint is not so isolated. Probably covers about 80 percent of 'advisors' And in this area I dont want a nonjudgemental viewpoint, and I suspect, neither do you.
 

duang

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Apr 17, 2007
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Except that his viewpoint is not so isolated. Probably covers about 80 percent of 'advisors' And in this area I dont want a nonjudgemental viewpoint, and I suspect, neither do you.
You think 80% are scammers and trying to rip you off? That's a pretty jaded view point. Do you assume that 80% of mechanics, doctors, etc. are crooked and out to get your money with no regard for your best interest? Don't know how to comprehend how you can think only one in five is honest and trying to help you.

Doesn't sound very realistic to me. Sounds more like hyperbole.

D.
 

hinz

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Nov 27, 2006
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Do you assume that 80% of mechanics, doctors, etc. are crooked and out to get your money with no regard for your best interest?
Hmmm..unless you can find a mechanic who is honest, willing to explain possible solution in plain English and show me the car's problem before I could make sound decision, otherwise mechanics in general have the same respect as ahem used car salesman and financial advisers relying compensation based on commission only.

If I am not mistaken, CTV W5 has an undercover show with APA to catch the rip offs from the mechanics working for chains like Mr. Lube, Green & Ross from coast to coast.

As far as the doctors are concern, they definitely are the top of food chain when it comes to get the respect...unless the doctors are working in the following places,

http://www.telegraph.co.uk/news/wor...-health-by-unleashing-waves-of-superbugs.html

BTW, I am not aware my 'mentor" last name is Trahair when it comes to fixating rip off from the financial advisers...;)
 

duang

Active member
Apr 17, 2007
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Hmmm..unless you can find a mechanic who is honest, willing to explain possible solution in plain English and show me the car's problem before I could make sound decision, otherwise mechanics in general have the same respect as ahem used car salesman and financial advisers relying compensation based on commission only.

If I am not mistaken, CTV W5 has an undercover show with APA to catch the rip offs from the mechanics working for chains like Mr. Lube, Green & Ross from coast to coast.

As far as the doctors are concern, they definitely are the top of food chain when it comes to get the respect...unless the doctors are working in the following places,

http://www.telegraph.co.uk/news/wor...-health-by-unleashing-waves-of-superbugs.html

BTW, I am not aware my 'mentor" last name is Trahair when it comes to fixating rip off from the financial advisers...;)
My point is that of course there are some people in every field that will rip you off in some way by overcharging or supplying inferior services but I think it is unbalanced to obsessively assume that the vast majority of people [overall or in any one category] are deceptive and only interested in making money with no regard for their clients.

Are all cops racists? Are all lawyers despicable people? Are all financial advisors crooks? Are you a simpleton?

You personally might want to spend ten minutes discussing the relative merits of the oil filter your mechanic is recommending and then checking the price on the web to make sure he's not overcharging you but there are a lot of people who will trust that person to provide good advice and service at a fair price [if you understand the word 'trust'].

Just stick to dispensing your advice about ETF's and such: you have lots of good insights. Give up on winning everyone over to your overly suspicious outlook.

D.
 

hinz

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Nov 27, 2006
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My point is that of course there are some people in every field that will rip you off in some way by overcharging or supplying inferior services but I think it is unbalanced to obsessively assume that the vast majority of people [overall or in any one category] are deceptive and only interested in making money with no regard for their clients.
Not obsessive enough to go postal, like the survivalist down South waiting for 2012 and arming themselves to the teeth, with can of beans, lavish supply of water and gold bars....:rolleyes:

Are all cops racists? Are all lawyers despicable people? Are all financial advisors crooks? Are you a simpleton?
-Not all cops are racists but at times they push the envelope by using racial profiling to combat rising crime spree of a particular neighborhood. People tend to use too much PC nowadays.
-Not all lawyers are despicable but a few high profile one like Ed Greenspan is considered one by some. Plus many politicians are lawyers by trade, go figure.
-Not all financial advisers are crooks but they tend to give impression that they are on the client side/interest no matter what, which is not true. They all need to earn a living one way or another. The bottom line for their employers and themselves always come first.
-No, I am not a simpleton. Otherwise, how could I tell the intricate details?

You personally might want to spend ten minutes discussing the relative merits of the oil filter your mechanic is recommending and then checking the price on the web to make sure he's not overcharging you
Like Mike Holmes said, any ethical and honest professionals would be more than willing to describe and tell you in plain English.

BTW, I usually "do my homework" before getting the things done, not after. Just like deciphering and figuring out which SP/MPA is the real deal or nothing but hype here. It's simple but not easy.

Moreover, getting knowledgeable and making yourself better prepared does not mean challenging to every professionals recommendation. You cannot do everything on your own but they are certain to think twice before trying to take advantage on your ignorance.

but there are a lot of people who will trust that person to provide good advice and service at a fair price [if you understand the word 'trust'].
Trust becomes worth-less after the Lehman Brothers Collapse. I mean worth less, not worthless.

The Bankruptcy could be summarized in the following acronyms,

AIG, DTA, NWO-All Investment Gone, Don't Trust Anything, No Way Out

I am sure there are more than few baby bloomers who share similar sentiment, probably more extreme than mine.

Just stick to dispensing your advice about ETF's and such: you have lots of good insights. Give up on winning everyone over to your overly suspicious outlook.
No argument here but at least they are needed to be forewarned before they do finger pointing to their advisers as somebody to blame for their own fault.
 
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oil&gas

Well-known member
Apr 16, 2002
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Ghawar
My point is that of course there are some people in every field that will rip you off in some way by overcharging or supplying inferior services but I think it is unbalanced to obsessively assume that the vast majority of people [overall or in any one category] are deceptive and only interested in making money with no regard for their clients.

Are all cops racists? Are all lawyers despicable people? Are all financial advisors crooks? Are you a simpleton?

............
D.
I think the comparison of financial advisors to other professions such as lawers and medical doctors in the context
of this discussion isn't entirely valid.

For one thing all family doctors are required to have equivalent qualification and expected to provide similar level of services.


The financial advisors average investors talk about are often salesman--the kind
of agents from an institute like Investors Group and manulife
who sell you all sorts of investment products, solutions and
other related financial services. These
advisors are not likely to be held
accountable of their conduct like
the professionals in other fields.
As a rule never expect your advisor
to be as responsible for your financial
health like your doctor is to your
physical health.

On the surface of it an Investor Group representative's
job is to be your financial advisor. In actuality their primary objective is to sell you funds, fund of
funds (and possibly even fund of funds of funds I believe). Your IG agent surely would not want to
see you lose money--it is in their interest for you to make money. Your profit won't be
your agent's primary responsibility but it is highly unlikely that he will intentionally rip you off.
An IG agent I got to know once bragged about how much better
gains made by his clients after switching away from other institutes like Scotia Macleod
and RBC. I am sure he never ripped his clients off. He didn't have to. The hefty management
fees charged by IG funds (which possibly boast the highest MER among mainstream players)
and in case of early redemption (within 5--7 years) the outrageously high deferred sales charge
should more than compensate for any financial advices he offered.

I do not mean to slam this kind of financial advisors for I believe they do have
a role to play in management of the not so well-informed investors money. The problem
is just that their role isn't generally well understood by the people who use their services.

There are of course bona fide financial advisors around. But they are substantially
more expensive than your typical financial planner. The other problem is that it would
take a investor with considerable knowledge to use such financial advisor effectively.
In such case the need for an advisor is optional.
 
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Mencken

Well-known member
Oct 24, 2005
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No problem with ETF's, dividend fund in particular. Had this option been available when I first started investing for RRSPs I would have been a long long way ahead of where I am now.
 
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Mencken

Well-known member
Oct 24, 2005
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Can someone tell me the difference between ETF and Index funds?
Cost I would guess. And possibly ease of trading. Check the fund's prospectuses...and compare costs, whether or not fund can be liquidated or sold quickly, and how distributions/dividends are handled.
 
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