Quote:
Originally Posted by CoachKandSportsguy
Due to the ETF tax efficiencies, the general rule of thumb is ETFs for taxable accounts and mutual funds for tax deferred IRAs/401Ks
The advantage of ETFs is that an individual can create an age/risk appropriate diversified portfolio which can return similar performance to active mgmt mutual funds, with the biggest advantage is controlling risk and tax implications. With a mutual fund, you are subjected to the portfolio managers tax decisions and costs.
If you want to see a simple, but well balanced, ETF portfolio at work is here
https://www.jpmorgan.com/content/dam...Report_JPM.pdf
you can follow along as well, and make this your benchmark portfolio to track your portfolio against.
good luck |
Thanks. My stock portfolio consists almost entirely of the S&P 500 Index. Most of it is in the Vanguard S&P 500 index fund. I don't know much about ETFs, but it seems to me that, in the event that a volatile stock market event occurs, it could cause ETF investors to cash in large portions of their ETF investment, which would require the fund manager to sell off many stocks to raise the required cash. This would cause a disruption in the S&P balance and create a large capital gains distribution. I think this is less likely to happen with mutual funds because many investors are buy and hold investors, not active traders. My opinion. But, in any event, my portfolio has so much capital gain built in, that it would be foolish to convert to ETFs.