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Yves Martjin
3:12
Is it ultimately inevitable that robos will take over advisors’ role?
Dave Nadig
3:12
100% nope!
3:13
I think Robo platforms are awesome for people with straightforward asset allocation portoflios.
But there's nothing in any Robo i've ever seen that even looks like what happens in a meeting with a good advisor.
No Robo sits down and maps out your financial plan, or helps you consider the pros and cons of long-term care insurance, or whether to annuitize a distribution, or how to save for a specific event
or how to negotiate your ISOs.
3:14
A good FA does all of those things and much more.
So Robos will be great for implementing a plan, but someone has to come up with the plan!
Todd Rosenbluth - CFRA Research
3:14
Hi Dave. There's a belief among active bond fund managers that with approx. 50% of investment-grade bond ETF assets in BBB bonds, when downgrades happen there will be a lot of fallen angles into the junk category creating price dislocation. Can you help explain how bond ETFs handle downgrades? Also can you please put the amount of money in bond ETFs in perspective?
Dave Nadig
3:14
Big question.  But yes, I agree - theres always movement in and out of the IG category.
3:15
I'm actually a big fan of the ANGL ETF from Van Eck.  Because often when bonds slide below IG, they get oversold
So theres real opportunities then, since the cumulative risk of default isn't actually much worse between the worst IG, and the best Junk.
3:16
As to how IG funds deal with it - most have some way of buffering things.  I don't know of any funds that sell everything the very day of a downgrade (some probably do).  Sometimes its just a waiting game till the next reconstitution, sometimes its an aging issue (sell in pieces over time) and so on.
I dont think this is a big systemic issue, as we've seen this rodeo plenty of times.
3:17
As for the money side:
US bonds are currently at about 650Billion in assets.
out of a nearly 4 Trillion US market.
3:18
The actual bond market is unbelievably massive, however.
I think it's well over 100 trillion in outstanding
Which is like, 2X the global equity market.
Amanda Ling
3:18
Not sure how best to phrase this question, but basically, how much can/do investors go awry if they generally hew to home country bias?
Dave Nadig
3:19
Home country bias is a universal issue, but the U.S. is historically the very worst at it.
But its not just us.  Canadians put too much in Canada, US investors put too much in the US.
3:20
The last stats I saw suggested something like most investors have 80% of their equity in the US
I havent seen a recent set of numbers on it.
but in general, we should all assume we're over invested in the U.S. -- and its worse, many investors over invest in their employment sector too
So tech employees buy too much tech "because they know it" and so on
3:21
and they avoid, say, emerging markets, because it seems alien.
Its probably the biggest problem in most portfolios.
I'd say the other big one is barbelling.  I know a ton of folks who have 60% of their money in one fund, and then the rest in cash, or one bond fund.
With no sense of real global asset allocation.
3:22
So many questions today, just sorting out the ones i can get to in the next 10 mins.
S. Meryl
3:22
Now that Salt Financial is basically paying investors to buy their ETF, do you think this “gimmick” will start an ETF issuer trend?
Dave Nadig
3:22
I actually like the Salt guys, but I have to say, I think paying money back into a fund isn't a great precedent.
3:23
It's essentially saying "Instead of paying $50,000 for marketing, we're going to put the $50,000 in the fund as a gimick and hope the free press is worth more than the 50k
I get WHY they're doing it, but its reeks of gimmick unfortunately, and completely distracts from whatever the fund in question is actually trying to do.
Which is of course, MUCH more important than the ER.
3:24
You could make a tripple leveraged oil fund with a negative ER - it still doesn't make it a good investment in my 401k!
Niles Vasquez
3:24
Should an investor wait to get into China ETFs til the trade wars are over?
Dave Nadig
3:24
Boy what a tough question.  I guess my answer is that anytime you're making an event trade, you need to recognize your fundamentally gambling.
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