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Dave Nadig
3:11
Thats a great question.   The short answer is "yeah, probably."
When you put in a market order your saying "I value speed more than price."  When you put in a limit order your saying "i value price more than speed."
There are generally not a lot of reasons for individual investors or advisors to be valuing speed more than price.
3:13
The "split the middle" answer is to put in marketable limit orders.  So if something is trading 100.10 by 100.20 (meaning you can buy it at 100.20 and sell it for 100.10, it's not insane to put in a limit order to buy at 100.20 or even 100.25.
Most of the time, you'll get filled instantly, but in the off chance the market just LEAPT while you were putting int he order, your guaranteed not to end up with a $101 fill by accident.
Thats the main reason to put in limits -- to avoid unhappy surprises in fast moving markets.
Hamish
3:14
Greetings Dave, Does it seem to you like Schwab calling crypto “speculative” is kind of like folks who deny climate change? I mean, isn’t crypto simply going to be part of our world, solely because no one can stop technology from progressing?
Dave Nadig
3:14
I think it's entirely accurate to call Crypto speculative.  Speculation is a hard thing to define precisely, but here's my shot:
A speculator is someone purchasing something with the intent to sell it reasonably quickly to someone else at a higher price.
3:15
An invstor is someone purchasing an asset for it's inherent long term growth and income contributions to a broader portfolio.
3:16
Given that Bitcoin really doesn't have a definable growth projection or an income model, I think it's reasonable to say that most bitcoin owners are owning on the hope of selling higher to someone else later.
Not because they expect to own it until they die.
So, perhaps splitting hairs, but I think of buying a 5% slug of crypto as being pretty similar to buying LEAPS or commodities futures.
3:17
I think theres a chance for that to change.  For it to be a true "store of wealth" but I'd argue most gold investors are really speculating as well.
although at least there there's enough history we can say meaningful things about Gold in different market environments.
Peter
3:17
We use Mstar Direct to track our portfolios.  The problem is we are force to use NAV returns to track performance because some of our models also have MF.  If we used Price Return we would not get performance of our MFs.
Opps.  Continuing... I cant seem to find a real good explanation of any differences between using NAV or Price return of ETFs.  That's really my question.
Dave Nadig
3:18
So, if the markets are liquid and healthy for an ETF, there wont generally be a big difference between NAV and Price returns over long periods (more than a month).
Where things get tricky is day-to-day.
3:19
Bond ETFs, for instance, strike their NAV generally based on fire sale prices.  "what could we dump all these bonds at right now."  The market, however, is two sided, so the closing price of most bond ETFs tends to be a little bit higher than NAV on a day to day basis.
But that very disconnect means its a bit more volatile.  It's not unusual for something like HYG to be at a 50bps premium one day and 50bps discount the next.  That's a 1% difference vs NAV.
3:20
Similarly, in a less liquid ETF, NAV may be struck based on prices from the underlyings that are very current at 4PM close.  But the ETF might not have traded in the last few minutes.  DIfferent exchanges have different rules about how to intperolate a "closing price" if there are no trades at the close.
So again, you can get a day to day disconnect.
3:21
In general, using NAV is the best practice, because it will be consistent over the life of the investment.
And in fact, I think both GAAP and GIPS would require you to use NAV unless you had some other information.
Hope that helps.
3:22
OK, one or two more here and then my wrists are going to cramp up.
Todd Rosenbluth - CFRA Research
3:22
Hi Dave. Great to see you at Wealth/Stack and share the stage. You made a good point (one of many) that how valuey an ETF is not easy to tell by the name/ticker. Would be great for you to expand on it here.
Dave Nadig
3:22
Yeah, the point I was making was simply that Smart Beta products add an entire level of complexity that makes life difficult for investors.
3:23
We've tried to mitigate that some with the work we did with MSCI to get their Factor Classification System on all the equity fund home pages.  So you can go to a fund like this:
3:24
and at least get SOME info on how much it's really overexposed to value (and in the case of VTV, see that it's really being driven by Dividend yield!)
But the tools have got to get a lot better and a lot more widely available.  There are great tools out there (Style Analytics comes to mind, but it's not free by any means!).
3:25
But the problem is: most folks aren't making these kinds of analyses daily.  They dont need a monthly tool to do the occasional check in.
It's getting better, but there's a lot more to do.
DidntGo
3:25
Any big take away's from WealthStack?  Was it just a FinTwit FanBoy Convention?
Dave Nadig
3:25
Hah!
Well, there's no question the audience was heavy on financial twitter, but honestly, i think that's part of why I liked it so much.  It was very, very different than any investment conference I've been to in a while.
3:26
The audience as in general younger, smaller in AUM, and more tech savvy.  For example, in the panel on crypto, I'd guess half the audience said they were either currently in crypto or actively looking for an option for their clients.
That same audience at Inside ETFs Florida might have been 5% if i had to guess.
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