on February 20, 2012
As a DIYer with an interest in index ETFs I found this to be an excellant guide. As a DIYer I have no one to bounce my ideas off and must rely on what I can find in the media or on various financial websites. I find the media generally pretty good but the financial websites are a bit iffy. Their choices for their model portfolios generally do not explain why some were chosen over others and they frequently include some of their own offerings; in one case that was largely ETFs, they included one of their mutual funds whose MER was almost equal to the total MERs of all the ETFs in the portfolio. And there were obvious ETFs that could have been selected. Ms. Griffiths is offering advice, not selling something, so I feel I can better rely on what she says. The model portfolios she suggests are preceeded by a description of the circumstances of the typical person they are suited for. I find that a more reasonable approach than selecting a portfolio based upon risk tolerance. Who really knows their risk tolerance until it is too late? And she limits her choices to a very few ETFs. Which makes sense. If one is interested in index ETFs how many index ETFs tracking the same index need to be considered?
I think this is one of the best books I've ever read on investing but there are a few improvements that I'd like to see. Why were these particular ETFs chosen and not others? An index is always very helpful in navigating any book. It is quite frustrating having read it to later try to find a particular passage or all the references to the same ETF, or some technical term, etc. A section on definitions would be useful. The professionals use terms all the time but the public may or may not know exactly what they mean. Or worse, think they do when they don't. I'd especially like a discussion of the various indexes tracked - how long they have been in existance, the rules for inclusion in the index, who controls the index, which indexes are real and which are just made up and follow some very restricted specialized sector or stocks. Very useful would be hints on how to read the literature published by the ETF suppliers. I've noticed that they are not quite open and transparent in their reporting of performance. The most glaring example is that mostly all of them will show a chart of how the index the EFT tracks performed compared to some broad market index but they do not chart the actual performance of their ETF. Obviously the ETF expenses will reduce the actual return a holder will get and in addition to that depending upon how the index is tracked there will a tracking error/difference. But don't expect the ETF providers to make that immediately clear.
on February 12, 2012
Even if you invested for decades -- yourself or through an adviser, in mutual funds, bonds and/or GICs -- you will learn lots.
The most important thing you are going to learn is how to identify when your adviser is working for you.... Or when s/he is working for him/herself, eating all your profits.