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Dave Nadig
3:14
But XRT has been the weird anomaly for at least 10 years.
3:15
But it's a bit of a white whale among us deep ETF nerds -- really teasing out the who and when of it all.
Marisol
3:15
Good morning Dave, What criteria should investors look for in a robo advisor (as perhaps compared to a “human” financial advisor?)
Dave Nadig
3:15
With everyone and their uncle offering a robo-type platform, I think it's reasonable to be skeptical.  Particularly if the robo is "free."
Since nothing is truly free, ask yourself where the company your looking at is making money.
3:16
THe poster child here to me is Schwab. They offer a free robo, but they put you in their ETFs (so they make some bps there), AND they put you in too much cash, offsetting that cash with (presumably) riskier fund positions.
So you may end up with the same portfolio risk, your just getting there in an odd way.
3:17
Why do they do that? To make money on the difference between the cash position and what they can get in the short term market investing it themselves (they keep the spread).
So to me that's number one: ask how they're getting paid.
And from there, I'd take a smell-test of the recommended portfolio, and ask if you think it makes sense to YOU, and then whether the services they're going to provide (rebalancing, etc.) are worth the outright costs.
Guest
3:17
Hi Dave, In your opinion, is it more beneficial to invest in REITS, or REIT ETFs?
Dave Nadig
3:18
My answer is pretty much the same for every asset class:  Do you really want to be invested in single securities?
Diversification is generally a good thing, and particularly with REITs, there can be some single-REIT risks.
3:19
So I guess I'd turn it around: why NOT invest in a REIT ETF?  Do you think you really have the axe on getting the undervalued REIT that the rest of the market is mispricing?
If not, are you going to play one reit against another somehow? Say, making a call on retail vs. healthcare or something?
It's the same with buying bonds or buying stocks: if you dont have an edge, diversification is your friend.
3:20
(and there are some quite cheap REIT etfs out there now)
ETF Bro
3:20
Any issues owning an ETF that has a large majority shareholder?  Specifically, with BYOA, should this be a concern for average investor?
Dave Nadig
3:20
Generally I wouldn't worry about this.  99% of ETFs are structured like mutual funds, with an independent board.
And for the most part, the board of an ETF doesn't have many tricky decisions to make where you'd be worried about undo influence or anything.
3:21
If anything I would think a firm that has successfully launched a BYOA type product to their own platform is showing that they're eating their own cooking.  That's often a pretty good stamp of approval and a sign the firm will stick by the products.
3:22
All else equal, there's some comfort in being in a fund with a larger asset base than a smaller one (not that;s in anyway prescriptive, I'm just saying if you literally had a choice of being in the exact same fund, at 100m or 500m, why not be in the larger one?)
So for me, no real concerns at all.
J. Gross
3:22
Hello Dave. Vanguard just posted their updated annual reports for their S&P 400 and S&P 600 ETFs. The expense ratios for both funds are about to be lowered to 0.05%. iShares still has these two funds (as part of their core suite of ETFs) with expense ratios of 0.07%. Do you think that this might finally nudge Blackrock to take another look at their core suite and decide to reduce some expense ratios? In my opinion, they have been laggards with respect to reducing expenses.
Dave Nadig
3:22
Mostly this feels like it's not worth bothering.
3:23
Do you really think that 2 bps is going to make a big difference in anyones buying decisions?
I mean, it's an annual cup of coffee on a LARGE position.
So I kind of think once your down around/under 10bps, this is really just noise for most people.
Sure, if your the $1 Trillion norwegian sovereign fund, a basis point makes a real difference in your operating budget.
3:24
but for even a large investor with a few million portfolio, its such a small amount of difference.  Generally it will be completely overwhelmed by tracking difference noise -- small variations in how rebalances are handled, taxes are recaptured, and so on.
Troy Campbell
3:24
Any idea if the IRS is currently “addressing” taxpayers’ crypto use, and if not, if they plan to in any way? What do you see as the issue, that taxpayers may be receiving income in that way, and they need to be taxed on it, or …?
Dave Nadig
3:25
Hi Troy.  So the IRS has actually been really clear about this I think.  One sec:
Yeah, this was all the way back 5 years ago:
Bitcoin is specifically called out here as being just an asset.  So you have to treat like any other piece of property.
3:26
If its your actual business (mining) you have to treat it as income when received, etc...
same with capital gains.
I doubt, very seriously, they're going to give much more guidance than that.
Now less honest folks might say "well how will they know" but that's between you and your accountant.  And possibly your audit defense attorney ...
3:27
But for sure, trading bitcoin isn't any different than trading stocks, bonds, art, real estate or beanie babies.  It's all taxable property transactions.
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