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Dave Nadig
3:11
It then rebalances and slowly changes the portfolio based on a number of factors, which differ from platform to platform.
So it might "glidepath" you towards a goal, getting less risky over time.
Or it might just handle rebalancing for you
Or it might actually do some fancy tax lost harvesting using single stocks.
3:12
The idea is that the core investment services provided by many advisors can in fact be "automated" and they've had real traction, particularly at vanguard and schwab.
But, I believe most people with any significant amount to invest actually benefit from a human being in the picture, who can take into account intangibles, and complex situations.
3:13
So i don't think advisors are going to get replaced -- they're going to get bionic.
using Robos to help manage pieces of their business.  We're seeing it a lot already.
Anonymous
3:13
Hi Dave. How do you envision blockchain/bitcoin will change the way we invest, both in the short and long term. Those are definitely here to stay, right?
Dave Nadig
3:13
So, I'm not a HUGE believer in the current state of cryptocurrency-as-currency.  I am a big believer in the distributed ledger.
3:14
And I think we'll see implementation all over financial services.  It's a much better technology than most of the large-scale financial transaction networks we rely on now
whether its for Credit Card processing, stock settlement, or fed wires.
SO I'm bullish on that piece of it, but I think its still a decade out.
Damon Greenfield
3:14
When stocks swoon like they've been doing, is it too simplistic to try to turn our portfolios around by buying shorting/leveraged ETFs?
Dave Nadig
3:14
Short answer: yep.
3:15
Investors of all stripes are notoriously awful at market timing calls
and whatever tool you use -- shorting because you think its going down more, buying because you think "it cant go lower" -- you're still making a gut call against every other participant in the market.
3:16
After all, todays price of AAPL represents the collective sentiment of EVERY apple investor, smart and stupid, all baked into the price.
It's "worth" precisely what the last trade went off at.
So if you have a genuine belief, I'm not going to tell you NOT to go short.  But you're betting against the math.
Garth Trayhorn
3:16
Just curious: how does an entity even become an ETF issuer? is it usually some kind of "spinoff" from a "parent company"?
Dave Nadig
3:17
Well, technically most ETFs are "owned" by their shareholders.  So IVV, for instance (iShares S&P 500), is just a 40 act mutual fund, owned by its shareholders, who elect a board to manage it.
the board then assigns various service contracts, the big one of which is the investment advisor.
3:18
so IVV "hires" blackrock to run the fund, and pays them most of the expense ratio (sometimes all of it, and the advisor covers all other expenses).
So defining who the "issuer" even is can be quite tricky.
3:19
Most of the time, though, the advisor is just the group inside a large firm that manages money -- usually the same firm that manages mutual funds.
Sometimes you'll see a small firm spin off an separate sub for this, but that's usually because their main business is something else (being a financial advisor, or a bank).
Guest
3:19
Unless your ETF involves K-1 distributions, do you have to do anything at tax time if you own an ETF?
Dave Nadig
3:20
Well, like a mutual fund, you may have gotten distributions over the course of the year - dividends, capital gains, etc.  Those need to be reported just like any find.
But there's nothing unique about ETFs.  You need to keep track of your cost basis -- just like you do when you buy or sell a mutual fund.  And adjust that basis based on distributions -- just like a mutual fund.
But thats pretty much it.
Holly Matthis
3:21
Emerging markets were in "disfavor" for some time. But it seems like they're kind of making a comeback right now.
Dave Nadig
3:21
They definitely took it on the chin, especially China.
Some of the rallies we've seen are extremely country specific -- Brazil for instance.  So I wouldn't read those turnarounds into a broader picture
3:22
however, I think EM and China are really cheap right now.  Almost all of them are under US valuations, with higher internal growth rates.
I'm actually doing a webinar on this next Tuesday.  Should be fun and provocative.
Gavin S.
3:22
If smart-beta has waned for ETF launches, what are new trends that are trumping that concept?
Dave Nadig
3:23
Well, not to be combative, but I deny the premise.  I was just looking at the 240 funds launched this year to get ready for the ETF.com Awards nominations going live next week.
125 - half - are some form of smart beta
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