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Dave Nadig
2:59
Good afternoon and welcome to ETF.com Live!  As always, you can enter your questions in the box below.
I'll get to as many as I can over the next 30 minutes or so, and we'll post a transcript up at the end of the day.
With that, let's get to the stumping of the chump (that would be me!)
Lee McDermott
3:00
I understand you don't own any specific ETFs, for impartiality, but if that weren't an issue for you, are there any types you would look to own: leveraged, fixed income, emerging markets, ESG ...?
Dave Nadig
3:00
Fair question!  So, the good news is that there are a lot of low cost beta mutual funds that mimic the core you can get in most ETFs.
So I'm not in a lot of 1.5% active funds or anything.
3:01
I think the most interesting "ETF only" or "ETF focussed" strategies are around alternatives.
So for instance: commodities exposure.  ETFs (and ETNs) are great for that kind of exposure.  Much trickier, or at least less obvious, in the mutual fund space.
3:02
I think there are also some derivatives focused products, like the Innovator defined outcome products that are pretty unique.
Last, in bonds, particulary junk bonds, ETFs make a lot more sense, and are much more fair in terms of taxation and particularly transaction costs.
Heather Rainey
3:03
If consumder confidence is at an 18 year high, why has the market been falling so much?
Dave Nadig
3:03
So, not specifically an ETF question but my opinion:  we were / are still at pretty high historical valuations, but CAPE standards.  Add to that the potential frictions of trade policies, unease about geopolitics, and it's not super surprising to me.
3:04
Consumers aren't the same as investors -- the investor class includes day traders and hedge funds and sovereign wealth funds and insurance companies ... and and and ....
retail investors are just a small piece of the overall market puzzle.
Mark D'Angelo
3:04
What's one key thing you would point to about safeguarding/maximizing your retirement portfolio? Or a key thing NOT to be doing?
Dave Nadig
3:04
Great question.
3:05
Some somewhat obvious basics: most people don't invest enough, early enough, regardless of how they end up managing the ultimate retirement portfolio.
I tell younger folks all the time that if you're not at LEAST taking full advantage of your company match, you're doing something very wrong.
3:06
As for once you have the money in an account.  I think most people, even if they deny it, think they can time the market.
Even if they just make 2 trades a year, or even one, they're probably hurting themselves over the long term.
Individuals are awful at timing markets.  Literally every study ever shows this.
but we all feel the pull to do so.
3:07
So dollar cost average in, rebalance once a year or maybe twice, and then ignore your portfolio as much as you can stand to do so.
I had a friend who told me, when he retired, that the single best investment decision he ever made was forgetting the password to his Fidelity accoutn.
theres some truth there.
VolMan2000
3:07
So, crazy month in the markets.  Did ETFs contribute?
Dave Nadig
3:08
Fair question. The odd thing is I actually think October gives us some evidence of precisely the opposite.
I'm working up the numbers, but so far, my read is that on several of the big down days, we actually had creations -- positive inflows -- into the related ETFs.
3:09
WHy would that happen?  Well, if the stocks in the S&P are selling off HARD -- say down 4%, and the ETF is "only" down 3.95%, that's an arbitrage opportunity.
and the way a market maker makes money is by BUYING the stocks and SELLING the ETF.  Ad the end of the day, they turn in the stocks to get the shares of the ETF they sold.
that actually puts upward pressure on the stocks, just when everyone's panicking.
3:10
So in short -- the immediate evidence suggests ETFs, if they did anything, have helped smooth out what has been a heck of a wild ride.
SM
3:11
Just wondering, for an asset class like gold, why would anyone choose a higher priced GLD versus a lower price IAU. How much truth is there that liquidity for GLD is higher? How about the newer version of GLD?
Dave Nadig
3:11
So, a few things here:
the first thing is - not all costs are in the ER.
trading, especially if you are institution, has a real impact.
I'll give you two examples.
3:12
IAU and GLD have handles -- prices -- that are 10X apart.
IAU is something like 11 a share.  GLD is something like 110 a share.
3:13
If you are an institution that is paying a small per-share trading fee instead of a block commission, putting $1m to work in GLD can actually be substantially less expensive.
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