[Fearful]

waiting for bottom,

“The expense ratio is 0.4% which is less than the loss on a bid/ask spread or bank buy/sell rates.”

A bid/ask spread of 0.4% is high-normal, usually found in smaller cap stocks. For example, on a large cap stock, one might well see bid $100.00, ask $100.02. That is 0.02%

The ETFs have bid-ask spreads of their own. These spreads can be quite large for the small cap, thinly traded ETFs.

The fees are not one-time, as in the purchase or sale, but are annual. 0.4% is a significant rate margin. Yes, it is better than most mutual funds, even low cost ones, but it is still significant. If you are seeking 4% yields, and you lose 0.4%, well, that is 10% of your return!

If you attempt to actively trade bonds, you will endure a lot of transaction costs, and in this case an ETF or mutual fund would be better. If you buy and hold to maturity, and you can find bond dealers able to sell you bonds at decent YTMs (i.e. not taking too much margin for themselves), that is ultimately the best route.

Since you are holding in a tax-advantaged account, some would recommend buying mutual funds instead of ETFs. One headache of mutual funds is their distribution of capital gains, making tax reporting difficult. ETFs do not have that issue. On the flip side, mutual funds do not have the bid/ask spread, and on some thinly traded ETFs that can be a real issue. Also, there are many more international mutual funds than international ETFs.

A lot also hinges upon how large of individual transactions you are able to offer. If you can have a diversified portfolio with $100K+ transactions, you will probably be able to do better with individual securities than with funds. If slicing up your portfolio left you with $10K individual investments, you are probably better off with funds.

This is all regarding fixed income; foreign equities can generally be traded via ADRs; the capital does not need to leave the US$ at all.

That is about the extent of my knowledge of foreign investing. If I learn something significant I’ll post it.

[Fearful]

waiting for bottom,

“The expense ratio is 0.4% which is less than the loss on a bid/ask spread or bank buy/sell rates.”

A bid/ask spread of 0.4% is high-normal, usually found in smaller cap stocks. For example, on a large cap stock, one might well see bid $100.00, ask $100.02. That is 0.02%

The ETFs have bid-ask spreads of their own. These spreads can be quite large for the small cap, thinly traded ETFs.

The fees are not one-time, as in the purchase or sale, but are annual. 0.4% is a significant rate margin. Yes, it is better than most mutual funds, even low cost ones, but it is still significant. If you are seeking 4% yields, and you lose 0.4%, well, that is 10% of your return!

If you attempt to actively trade bonds, you will endure a lot of transaction costs, and in this case an ETF or mutual fund would be better. If you buy and hold to maturity, and you can find bond dealers able to sell you bonds at decent YTMs (i.e. not taking too much margin for themselves), that is ultimately the best route.

Since you are holding in a tax-advantaged account, some would recommend buying mutual funds instead of ETFs. One headache of mutual funds is their distribution of capital gains, making tax reporting difficult. ETFs do not have that issue. On the flip side, mutual funds do not have the bid/ask spread, and on some thinly traded ETFs that can be a real issue. Also, there are many more international mutual funds than international ETFs.

A lot also hinges upon how large of individual transactions you are able to offer. If you can have a diversified portfolio with $100K+ transactions, you will probably be able to do better with individual securities than with funds. If slicing up your portfolio left you with $10K individual investments, you are probably better off with funds.

This is all regarding fixed income; foreign equities can generally be traded via ADRs; the capital does not need to leave the US$ at all.

That is about the extent of my knowledge of foreign investing. If I learn something significant I’ll post it.

[Fearful]

waiting for bottom,

“The expense ratio is 0.4% which is less than the loss on a bid/ask spread or bank buy/sell rates.”

A bid/ask spread of 0.4% is high-normal, usually found in smaller cap stocks. For example, on a large cap stock, one might well see bid $100.00, ask $100.02. That is 0.02%

The ETFs have bid-ask spreads of their own. These spreads can be quite large for the small cap, thinly traded ETFs.

The fees are not one-time, as in the purchase or sale, but are annual. 0.4% is a significant rate margin. Yes, it is better than most mutual funds, even low cost ones, but it is still significant. If you are seeking 4% yields, and you lose 0.4%, well, that is 10% of your return!

If you attempt to actively trade bonds, you will endure a lot of transaction costs, and in this case an ETF or mutual fund would be better. If you buy and hold to maturity, and you can find bond dealers able to sell you bonds at decent YTMs (i.e. not taking too much margin for themselves), that is ultimately the best route.

Since you are holding in a tax-advantaged account, some would recommend buying mutual funds instead of ETFs. One headache of mutual funds is their distribution of capital gains, making tax reporting difficult. ETFs do not have that issue. On the flip side, mutual funds do not have the bid/ask spread, and on some thinly traded ETFs that can be a real issue. Also, there are many more international mutual funds than international ETFs.

A lot also hinges upon how large of individual transactions you are able to offer. If you can have a diversified portfolio with $100K+ transactions, you will probably be able to do better with individual securities than with funds. If slicing up your portfolio left you with $10K individual investments, you are probably better off with funds.

This is all regarding fixed income; foreign equities can generally be traded via ADRs; the capital does not need to leave the US$ at all.

That is about the extent of my knowledge of foreign investing. If I learn something significant I’ll post it.

[Fearful]

I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

[Fearful]

I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

[Fearful]

I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

[Fearful]

I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

[Fearful]

I would not view this as “foreign currency trading”. One way to think of it is hedging your dollar value risk. If, say, half of your consumption is of goods from overseas, then you ought to hold half of your investments in non dollar denominated assets. If the value of the dollar declines, your the purchasing power of each investment dollar will decline, but the overall amount will increase. If the dollar increases, the investment total will decrease, but the purchasing power will rise.

One problem with the ETFs is that they take fees. You can actually buy international bonds and CDs directly. I am not clear on what the fees are for doing that, and have been trying to find out via Schwab.

[Fearful]

I dunno. I think he is kind of making an interesting point, alluded to by others’ comments: If buyers are not buying houses, sellers do not bother putting them on the market.

But the point people are exploring when they look at inventory is not demand behavior, but supply behavior: Must-sell inventory shifts the supply curve forcibly to the right. If there were significant must-sell inventory, you might expect to see substantial increases in inventory.

Perhaps this increase is partly negated by the decrease in other inventory from the demand shift; this is the sellers’ “battening down the hatches to ride out the storm”, as we have anecdotally seen in the coastal areas.

See, I took Econ 101 also.

[Fearful]

I dunno. I think he is kind of making an interesting point, alluded to by others’ comments: If buyers are not buying houses, sellers do not bother putting them on the market.

But the point people are exploring when they look at inventory is not demand behavior, but supply behavior: Must-sell inventory shifts the supply curve forcibly to the right. If there were significant must-sell inventory, you might expect to see substantial increases in inventory.

Perhaps this increase is partly negated by the decrease in other inventory from the demand shift; this is the sellers’ “battening down the hatches to ride out the storm”, as we have anecdotally seen in the coastal areas.

See, I took Econ 101 also.

[Fearful]

I dunno. I think he is kind of making an interesting point, alluded to by others’ comments: If buyers are not buying houses, sellers do not bother putting them on the market.

But the point people are exploring when they look at inventory is not demand behavior, but supply behavior: Must-sell inventory shifts the supply curve forcibly to the right. If there were significant must-sell inventory, you might expect to see substantial increases in inventory.

Perhaps this increase is partly negated by the decrease in other inventory from the demand shift; this is the sellers’ “battening down the hatches to ride out the storm”, as we have anecdotally seen in the coastal areas.

See, I took Econ 101 also.

[Fearful]

I dunno. I think he is kind of making an interesting point, alluded to by others’ comments: If buyers are not buying houses, sellers do not bother putting them on the market.

But the point people are exploring when they look at inventory is not demand behavior, but supply behavior: Must-sell inventory shifts the supply curve forcibly to the right. If there were significant must-sell inventory, you might expect to see substantial increases in inventory.

Perhaps this increase is partly negated by the decrease in other inventory from the demand shift; this is the sellers’ “battening down the hatches to ride out the storm”, as we have anecdotally seen in the coastal areas.

See, I took Econ 101 also.

[Fearful]

I dunno. I think he is kind of making an interesting point, alluded to by others’ comments: If buyers are not buying houses, sellers do not bother putting them on the market.

But the point people are exploring when they look at inventory is not demand behavior, but supply behavior: Must-sell inventory shifts the supply curve forcibly to the right. If there were significant must-sell inventory, you might expect to see substantial increases in inventory.

Perhaps this increase is partly negated by the decrease in other inventory from the demand shift; this is the sellers’ “battening down the hatches to ride out the storm”, as we have anecdotally seen in the coastal areas.

See, I took Econ 101 also.

[Fearful]

Thought I’d chime in on the schools:

Cupertino high school API 873 Asian, 788 white, 817 overall
Torrey Pines high school API 913 Asian, 855 white, 852 overall
Torrey Hills elementary 986 Asian, 934 white
Collins elementary 967 Asian, 925 white

I don’t take API scores all that seriously, but at least on that basis it is hard to argue the Cupertino schools are that much better.

Back on topic: I’m white but have known well quite a few Asians, and have to agree with much of what FLUB wrote. For example, I was struck by one finance MBA’s insistence on a 15 year mortgage. She wanted to pay it down. I tried to discuss diversifying assets, and so forth, but she would have none of it.

[Fearful]

Thought I’d chime in on the schools:

Cupertino high school API 873 Asian, 788 white, 817 overall
Torrey Pines high school API 913 Asian, 855 white, 852 overall
Torrey Hills elementary 986 Asian, 934 white
Collins elementary 967 Asian, 925 white

I don’t take API scores all that seriously, but at least on that basis it is hard to argue the Cupertino schools are that much better.

Back on topic: I’m white but have known well quite a few Asians, and have to agree with much of what FLUB wrote. For example, I was struck by one finance MBA’s insistence on a 15 year mortgage. She wanted to pay it down. I tried to discuss diversifying assets, and so forth, but she would have none of it.

[Author]

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