Index Funds vs Mutual Funds vs ETF (WHICH ONE IS THE BEST?!)
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- Опубліковано 11 тра 2024
- INDEX FUNDS vs MUTUAL FUNDS vs ETF // An explanation of the differences between these 3 types of investments and how to choose the best option for YOU! Watch this video to find out the pros & cons of Index funds vs mutual funds, index funds vs ETFs, ETFs vs index funds, and ETFs vs mutual funds. You'll also get a beginner-friendly explanation on what is a mutual fund, what is ETF investing, and index funds explained.
Great video on index funds for beginners, ETFs for beginners, and mutual funds for beginners. This is the definitive resource to find out the differences/similarities and pros/cons of index funds vs mutual funds vs ETFs!
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**THINGS MENTIONED IN THIS VIDEO! 👀**
💫 What is a Stock Market Index (EXPLAINED!)
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**BOOKS I RECOMMEND 📚**
I Will Teach You to Be Rich (hilarious how-to book on personal finance for millennials)
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The Little Book of Common Sense Investing (Jack Bogle's classic advice on index funds)
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InvestED (step-by-step, millennial-friendly advice on how to pick stocks like Warren Buffett)
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Unshakeable (this book = courage. blast ALL the fears & misconceptions you have about investing)
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Rich Dad Poor Dad (#1 selling personal finance book of all time... need I say more?)
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Think and Grow Rich (the ultimate book on money mindset and wealth consciousness)
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**MY FAVORITE MONEY TOOLS 🖤**
YNAB (I literally can't live without this budgeting app, so obsessed)
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Wise (like Venmo but for international currencies - I use this app a LOT for my life in Mexico)
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Ledger Nano S (crypto storage hardware wallet, because "Not Your Keys, Not Your Crypto"!):
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This content is for education and entertainment purposes only. Rose does not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.
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• Index Funds vs Mutual ...
A year has passed and she still hearts comments. Freaking legend.
I dont think u have to pay trading commison on vanguard etfs
Great explanation. This is the reason!
@@investingwlthrose9280 lmao ur a fake don't trust her or he it's a fake click on her channel and no content or subscribers
Yeah, that's some loyalty to fans right there! Most of these UA-cam people act like they're too good to interact with their followers or read their comments. She's one of those rare good ones.
There must be an automatic software lol
Every week I buy more of whatever is the lowest percentage of my portfolio and try to keep everything around 10%. Please what could be my safest buys with $400k to outperform the market in 2024?
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
I agree with you. I started out with investing on my own, but I lost a lot of money. I was able to pull out about $200k after the 2020 crash. I invested the money using an analyst, and in seven months, I raked in almost $673,000
Please will you be kind enough to share the details of the man that helped you?
Actually its a Lady. Yes my go to person is a 'MARY KALIOPE BRAUN'. So easy and compassionate Lady. You should take a look at her work.
Thank you for sharing. it was easy to find her, then I scheduled a phone call with her. She seems proficient considering her résumé.
I just have to applaud your content, well done. I remember having a consultation with a financial analyst last August, and it was incredibly insightful. Can’t stress enough how helpful experts in this field are!
Absolutely agree! A good financial analyst can make a world of difference. What specific insights did you gain?
As long as you diversify your portfolio, any single stock or investment that you own shouldn’t have too much of an impact on your overall return. If it does, diversifying might be the right choice for you, as one can also try out other commodities. I now have a balanced portfolio that is yielding me profit thanks to guidance from Jonas W. Herman.
I’ve come across tons of people talking about him all over UA-cam. I’m new to all this. Is he taking new investors?
Hermanw jonas (a Gma!L
Is he taking commissions for his services? Yes, I’m I still making money in the process? Hell yes!
I started working with Jonas back in June, and my financial goals have never been clearer. It’s like having a strategic partner for my money with a solid track record.
This was so clear and concise for complete beginners who are intimidated by the complexities of the stock market. Thanks so much for all you do!
Would it be wise to invest in multiple index funds?
Agreed, very clear and concise. Also incomplete and incorrect in some non-trivial aspects.
"All index funds are mutual funds" this is wrong an index fund can be a mutual fund or an ETF
finally someone explains it like i'm in middle school, needed that
@Shivu anir Yeah so that's why she explains like that
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Cheers for the Video clip! Apologies for chiming in, I would love your thoughts. Have you thought about - Rozardner Flying Bird Reality (Sure I saw it on Google)? It is a great one of a kind product for learning a simple option trading secret to win big without the hard work. Ive heard some great things about it and my close friend Aubrey at very last got amazing success with it.
Lovely Video clip! Sorry for chiming in, I would love your thoughts. Have you considered - Rozardner Flying Bird Reality (probably on Google)? It is a good one off guide for learning a simple option trading secret to win big without the hard work. Ive heard some interesting things about it and my work buddy at very last got cool success with it.
@Shivu anir there COULD be more in depth info, BUT -- the REAL TRUTH-- you--- YES you- and NO ONE else
WOULD benefit --- SIGNIFICANTLY from it ( I did say --- significantly!!) so, there is NO FINANCIAL EDGE in MORE "STUFF"!
I love how she get to the point... no fluff in the beginning
Nice Video! Excuse me for butting in, I am interested in your opinion. Have you tried - Rozardner Mind Tricks Reality (Have a quick look on google cant remember the place now)? It is a good one of a kind guide for revealing the trick to get the mind of a millionaire without the hard work. Ive heard some great things about it and my buddy at very last got astronomical success with it.
Cheers for the Video! Sorry for the intrusion, I am interested in your opinion. Have you tried - Rozardner Flying Bird Reality (do a google search)? It is a great one of a kind guide for learning a simple option trading secret to win big without the headache. Ive heard some pretty good things about it and my BF got astronomical success with it.
I hate fluff
I'm 70 and retired, I have $302k in a bank savings account making nearly nothing in interest. I’d like to put it in a HYSA (5%) or should i put a portion in index funds? I have $400k in an annuity. How do i maximize all this to make gains this year?
In this current unstable markets, It is advisable to diversify while retaining 70-80% in secure investments. looking at your budget, you should consider financial advisory.
I agree. Based on personal experience working with a financįal advlsor, I currently have $2 million in a well-diversified portfolìo that has experienced exponential growth from when i started. It's not only about having money to invest in stõcks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
She goes by ‘’Jessica Annabelle Rupp’ I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
Thank you for sharing, I must say, Jessica appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive. I reached out and scheduled a call
If you put it on high yeald savings of let’s say 4.26% you will gain $12865.2 a year
I am 48 and I am completely ignorant of stock market and investments, my ignorance on the matter makes me believe there is always a catch and not invest, this video is my first of many that I am planning to watch to educate myself and start investing for my family’s future 🙏🙏🙏
yes, finally someone that explains things without sounding like they have a train to catch
😅😆
😂😂😂
She is great and very smart. But the reason for the quick speak is because of the trade this field is in high frequency, quick price action and volatile chart reading which sharpens your brain and makes processing and outputting information quicker over all.
Or run over by one.
@@isoSw1fty investments like the ones she’s talking about are not short term. I highly doubt anybody talks like that simply to teach your brain to work faster.
Mutual Funds (MF's):
1. Convenience - a bundle of different stocks in one purchase - 01:22
2. Diversification - minimize risk - 02:00
3. Professional fund managers - Active Mgt ~ expertise to select comes w/ 1-2% fees - 02:33
Index Funds (IF's:) - 04:00 - They are a type of MF's, but passively managed, replicating S&P 500 index behavior, then, minimum fees. Transactions (buy and/or sell) ONLY once a day.
IF's offer Automatic Reinvestment - added feature w/o fees to automate a frequent purchase - 08:18
Exchanged Traded Funds (ETF's): Can be purchased as often as desired,; each transaction has fees. No Automatic Reinvestment for ETF's - 06:29
You’re a hero
@@focusgroupachievers3876 Agh, I did check it out, but it was so low volume and slow that I couldn't stay and follow it, so downvoted it
Wonderful!l 👏
Genuine top comment!
@Osaka Seafood Concern ETFs can be bought with fractional shares. It depends on which trading platform people use.
@Osaka Seafood Concern You can buy partial shares of ETFs through a lot of different brokers like Robinhood and Fidelity.
Thank you! Someone who finally clearly explained the different between ETFs and Index funds! Could never understand why someone would pick one over the other as a long term investor! Thanks.
A NICE VIDEO, EVERYONE NEEDS MORE THAN THEIR BASIC INCOME TO BE FINANCIALLY SECURED. THE BEST THING TO DO WITH YOUR MONEY IS TO INVEST IT BECAUSE MONEY LEFT IN THE BANK ALWAYS END UP BEEN USED ONE WAY OR THE OTHER WITH NO RETURNS. I USED TO BE A VICTIM OF SUCH, NOT ANYMORE. I INVESTED AND MAKE STEADY PROFITS.
The pandemic has taught everyone the importance of having multiple stream of income, unfortunately having a nice paying job doesn't mean you are financial free or secured.
With the consistent weekly profits I'm getting from my investments with JOANNA MALIVA LEE, I have no doubts I am financially free and safe, she is the most reliable in the market now.
I am new to stock trade and online investments, I do not want to do it all by myself, I need good financial advice from a good strategist. Any good advice will do for now.
How do I begin, and how do I get her contact? I need to contact her ASAP.
Search for her complete name on the web for services.
Rose literally explained it the best way possible out of all the videos I watched
I’m thinking putting money in INDEX FUNDS WHAT ABOUT YOU
@@josedorantes67 same !!
Rase here😂
You would imagine how long it took to find a video that simplified it enough for everyone to understand
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For me, the main benefit of ETFs over index funds is the lower barrier to entry. Most index funds have a higher minimum investment than their ETF equivalent.
True for Vangard's but SWPPX has a $1min. and FXAIX is $0. Also, if you don't what to buy a whole share of say FXAIX, you are welcome to buy fraction: 0.1 share is about 15 bucks! ETFs also cost a bit more than funds, for example SPY's expense of 0.09% is 6 times that of FXAIX at 0.015. That extra cost is no big deal for small holdings though but the point is that liquidity has a cost as well as a value. SPI and VOO are great for holding cash in the broad market, waiting for a business that you want to go on sale.
Not to mention the tax differences, eft your in control of your own tax obligations
I've been putting off learning about investing because I cant wrap my head around any of it... but this was the first video that ACTUALLY made sense! So glad i found your channel rose, definitely subscribed immediately :)
This totally answered an IMPORTANT question that I didn’t even know to ask. Thank you for cutting to the bare essentials and equipping us with answers we didn’t even know we needed!
I've watched so many videos on this and you're the first who was clear and easy to understand. Thanks.
How much risk you are willing to take in the financial market is the key to building a portfolio that will meet your needs, but you can’t just assess this once.
Many of us would love to manage our own investments, but it can be overwhelming to know where to begin. Do we use stocks, bonds, futures, commodities, or real estate? Should we go long, buy on margin, short a stock, or put everything into crypto?
Find an investment strategy that is right for you, then make it a point to base your investments on logic rather than emotion.
Working with Tamara Diane Hagan have given me the leverage to have a proper retirement plan.
Thank you. How do i reach out to her ?
Search her name on the web to see her website.
Wow, I'm new to investments and you broke the whole thing into such simple words, easy to understand. I hope other UA-camrs learn from you.
Omg girl you explain this so well!!!!! You’re AMAZING!!! I’ve watched countless videos and no one is so clear and concise the way you are!! I appreciate this so much
Great beginner info, exactly the comparison i was looking for. There's a lot of videos trying to explain this, with a bunch of terms that beginners have no idea how to interpret, but this makes it a lot easier for me to understand. Thanks a lot!
THANK YOU for this video. I have watched many videos and read textbooks about this topic but holy hell they never get the points straight but you explain everything CLEARLY and very easy to understand just within 9 minutes.
Wow.... that's the type of video I was looking for... So, clear and easy to understand, not jumping to strange terms. I loved and just subscribed.
I feel a whole lot smarter after watching this. thank you!
Incredible simplified breakdown on this topic. This is the best explanation I’ve seen on these types of investments. Great job!
Thanks Praxis!!! Glad I could be of help :) You have an awesome name btw
THANK YOU!! You're the first one to explain the difference between these three in a way I can understand. My bank lacks so much transparency that I'm not even sure if my money is on an index fund or a mutual fund, or an ETF 🙄
i am so thankful as an actual beginner since you explain everything line by line whereas most of the people expect everyone to know everything. i mean we come here to learn and not after ;earning. LOVE YOUR VIDEOS!!
You explained this in 9mins when there are entire textbooks and full day workshops that cover it and you still get lost. Thank you
Yeah, information overload is a real thing - especially in the world of investing!
You did a really great job explaining the differences and made it really simple for anyone to understand these concepts. Also love your energy!
Sebastien Beauboeuf Thank you so much!!! That really makes me happy to hear because I spend a lot time thinking about HOW to explain things without making people’s eyes glaze over. So glad it makes sense!!
@@itsrosehan do you get capital gains from index funds as you do for mutual funds.
Some of this information is outdated, in regard to ETFs, don't know if she knows but robo advisor apps like Acorns only invest your money in ETFs (all 5 portfolios they offer) and they reinvest your dividends as well. 🤷🏻♂️ It does cost $12/year but if you have at least $3000 in the account the dollar per month expense isn't so bad. Especially since it's a dollar a month up to your first million dollars.
Yes agree awesome energy and she reminds me so much of missbehelpful videos too with her channel ua-cam.com/video/_4cOJ9J7phc/v-deo.html
simp
I was already leaning towards index funds, but with how perfectly broken down this was, I'm definitely going that way with my investing.
Hi Rose:) I just want you to know that among everyone on UA-cam I choose you to follow and learn from your UA-cam videos. You are so genuine and I really like your way of explaining. I am a completely beginner and I really want to start investing to create a better and safer financial future for me. So I thank you in advance and can't wait to look all your videos. Thank you for sharing your knowledge with us, I am so grateful for you!
I'm so impressed how clearly and concisely you explained all this, THANK YOU. I was always so confused by how these terms were being used and googling just took me down rabbit holes that made things even more confusing.
@Investing with rose i can tell you are a scam account. Anyone reading this please ignore this person and report them!
same with me
Rose, your videos are fantastic. Zero nonsense, just to the point and informative! Great content!
This is THE best short explanation of the basics on UA-cam. Appreciate it so much
Thank you, Rose. I appreciate how clearly you explained the differences between these. Great job!
I am the type that I need "info for dummies." This video was awesome!
Life Yang Awesome! Lol info for dummies, that’s exactly what I want my channel to be. Fun fact: the first investing I ever read (in my teens) was called “Investing for Dummies”!
Honestly, I think it is "the dummies" that do not ask the questions and pursue the answers.
same here.
@@NewHampshireJack Asking questions is an important part of pursuing answers though.
I love your videos! Easy to understand and very helpful
Thanks for the info. Was trying to discern the difference between mutual and index funds for a while now, but your video clarified it in a comprehensive way. Great video.
Qwerty Asdf Yasssss! It took me a while to figure it out too lol, so glad I could clarify this for you!
There's no fees with ETFs right?
Great video! I was a big ETF fan before this so thanks for sharing the downside of treating it's holdings like a short term play instead of holding long term. I'll definitely consider more index funds going forward
I've already understood those three, but I do say it makes it made it very clear. I myself pick and hold stocks, but overall, if I was so interested in equities, I would definitely go with index fund(s).
Omg! THANK YOU SO MUCH FOR THIS! This has cleared everything up so much! And you were not the first video I saw! Only now do I really understand! You’re explanations are short and full of info I can comprehend! You’re energy makes me want to learn more! I have been trying to learn more about investing in the last year but always feels overwhelming! Thanks for putting some of the anxiety at ease and making me excited to learn from you now that I have found you! I will be sharing you with my friends!
Wow one of the best explanation I’ve heard. Keep it up!
That is such a huge compliment! Thank you!
I randomly found this vid while researching on employee stock option...don't even know how it showed up. As a former financial advisor and former finance tutor, I have to say I love your videi explaining the fundamental characteristics between ETFS and Index funds: very articulate and very easy to comprehend. Keep up the good work!
Thank you! I finally get it! These blended into each other before and confused me, you made it clear and simple to understand :)
This broke it down so well, just what I needed. You are a life saver!!
I love u, u just brought me out of understanding of all three funds I was so confused, been watching lots of video and coundt understand the diff and here you came and made my life easy.
I've only watched a couple of your videos but my knowledge has increased exponentially. Thank you.
Brilliant. Thank you for making seemingly complicated concepts very layman. Crisp! You are so good!
Soooo....this just became the only channel I'll be watching from now on. So good!!
after watching 5 "ETF's explained" videos I finally understand.... Thank you Rose, definitely got my sub and like
Thank you for the nice and understandable explanation. I'm a new investor and wanted to buy mostly ETFs for their high dividend yields and mostly stable market price. But knowing you can invest in index funds with recurring automatic payments without having to pay commission fees seems really interesting. I will definitely look into index funds more
This video is a little outdated actually as Robinhood actually offers recurring investments in to ETF's for 0.0% trading fees. As long as you can control impulse buys, this freedom is currently the best option. If you haven't used Robinhood before, lmk and I can give you a referral code that gives you a little bonus when you set up your account. If not though, have a great day!
Thank you 🙏 I have learned new features and their differences from you today ! I have been reading and watching about their differences for a week now but no one explained cleaner than Rose 🌹
Gosh I haven't felt this dumb since trying to learn algebra back in school, LOL. Thank you for information , I had no idea. Hope to see more of your content.
Sis!!! Clearly you want all of us to win, I am loving each vid in this series. You came to teach and it shows, thank you, thank you, thank you!!
Thank you! I will maybe soon have an internship at a company that focuses on indexes so I'm learning a lot of stuff here and the videos are so useful!!
i just went through like 3 videos of others explaining this and this one was by far, not even a question, the best...by like alot!
You just got a new subscriber
This is amazing! I'm 20 years old and currently majoring in Marketing but I'm so interested in finance and investment. Your videos are teaching me so much about investing my money etc, thanks!
I’m seriously a noob to investing, but I just learned so much from you. Thank you greatly.
You're very welcome :)
Lots of good info in this one.
Your explanation is 1000% clearly and more useful than all the collect lectures I have learned in my finance degree! 😂😅
😂😂😂
amazing explanation, very clear and not complicated for beginners like myself. I really appreciated this video bc there aren't a lot like you
The advantage of ETF's over traditional Index Funds is liquidity. There have been times when fund managers have suspended withdrawals because they do not have the immediate cash to pay out the investment. At least with an ETF you can sell it whenever the market is open. You may have to sell it at a lower price but at least you can sell it immediately.
When exactly has an index fund suspended withdrawals?
I started a bit skeptical with this video, but ended up enlightened after watching ur video. Thank u
From skeptical to enlightened. Lol I love it
Smooth, precise and to the point. Thank you for the quick explanation! Very helpful!
You have the ability to break down complex ideas to simple elements - I think it's a gift. You are probably fulfilling your life's mission, or at least a major aspect of it.
Best explanation of these 3 on youtube. Thank you!
This was a super clear explanation and the subtitles helps immensely.
Rose you are an inspiring, amazing instructor. I’m sure it’s a lot of work, but a blessing for those who listen to you.
I've watched so many videos and listened to podcast on this topic and your video has been the easiest to comprehend for a beginner. Thank you so much, im at ease with investing now
My favourite UA-cam channel! I've learned so much from this one channel. Thank you, Rose!
This is the exact topic that have been trying to get clarification on. Thank you!
You’re very welcome! 🙌🏼
This was great, much needed explanation for me. Thank you Rose!
Really liked the information provided cleared up misunderstanding between all three options, and clarified what I've been reading in financial books for beginners. Thank you.
These three different funds confused the heck out of me until I watched your video. Thank you. Thank you. Thank you.
@Investing With Rose ok spammer! 👌
Finally, a video that that made some sense! Excellent work :)
hooky84 Lol, yay! And thank you!
The best presentation on this topic I have seen on youtube. Very clear and concise information.
Excellent explanation of the differences. I am a 71 year old who spends his time swing trading energy related stock on European and US markets. I often wondered about the differences in the type of funds and, even though I don't deal in them (my bank handles those) I was really impressed with this presentation. Thank you.
The Best breakdown I’ve seen for sure✔️ been struggling to know the difference for a month watching many videos, came across yours and understood it straight away 😊 #Subscribed
I just looked at a video with a guy explaining this exact same thing and I was confused. After watching this I feel very educated and ready to learn more. Bravo 👏🏾
Wow, thank you! I feel so much more knowledgable. Excited for my investment journey
Lots of simple, easy-to-understand info here. Thanks for this! 😊
but a minimum of $3k is required to invest in an index fund. an ETF has no minimum deposit. This is a really huge point that a beginner would need to know, i feel like this video has missed out a few really important things to consider, especially for beginners.
Was just about to say this haha. Somebody new to investment isn't likely to have $3k to shell out.
This is a HUGE thing to mention, especially in a video like this where most of us are starting from rock bottom.
Thank you so much for showing Vanguard's page and mentioning that index funds are still a type of mutual fund. I'm investing for the first time and was looking for the option to buy index funds but only saw options for mutual funds and ETFs. I was familiar with Jack Bogle being the creator of the index fund so knew I was missing something - if anyone offered index funds it would be Vanguard.
Subscribed. Love your precision and depth.
Been watching a lot of your videos lately. Thanks for this easy to understand explanation. I was getting confused because like you said others have been using all 3 terms interchangeably.
Thank you! You made such complicated concepts so simple and saved me hours of research!
"Go after your dreams unapologetically." I love that quote. My family didnt want me to work in the media when I made my career choice in high school. Now that I'm working in television, I have followed my dreams unapologetically. Thanks for the great advice, Rose!
ETFs offer lower fees. That's the reason why I chose VOO over VFIAX. And since basically all brokerages now offer free trades, ETFs are even more appealing. Oh, and you just gained a new subscriber 😉
Free Trade for Americans, not for non-Americans unfortunately. But purchasing 1 ETF is cheaper than purchasing 50 (or more) individual stocks that try to mimic the market in a similar manner. I also feel that mutual funds are quite a rip off to be honest. They always promise huge returns, but fail to beat the market. So, if you can't beat them, why not join them? :P
EFTs fees are lower but no dividend reinvestment
@@verynick E-Trade will drip ETFs as well some others
@@verynick What is the Vanguard Brokerage dividend reinvestment program?
This no-fee, no-commission reinvestment program allows you to reinvest dividend and/or capital gains distributions from any or all eligible stocks, closed-end mutual funds, exchange-traded funds (ETFs), FundAccess® funds, or Vanguard mutual funds in your Vanguard Brokerage Account in additional shares of the same securities. investor.vanguard.com/investing/brokerage-dividend-reinvestment. My Vanguard S&P 500 Index ETF (VOO) allows dividend reinvestment.
@@verynick A lot of ETFs do reinvest or pay out dividend. However they usually also charge a small fee.
Nowadays almost all companies buyback stocks, so dividends are the last thing I'm worried about to be honest. Only bad performing stocks tend to pay out a lot of dividend. But even just looking at buybacks is kinda useless data, you have to look at the whole picture. And attempt to predict the future.
Thank You!!!!
I've been needing a video like this all my life!
They really need to start teaching this in School.
Thank you! This is the best explanation on index vs. ETFs that I've found.
I will keep buying my targeted stocks on low days. They keep dropping and I keep buying. I'm running I lower on cash though... down to about 20% cash. I'll keep buying the sale prices until I'm outta cash. gotta be greedy when others are fearful.
Best explanation, Thank you!! You've gained another subscriber.
You’re welcome! 😊 And thanks for subbing, welcome!
I was pretty confused with the terms Index funds and Mutual funds. Your explanation was spot on to explain the difference b/w these two. Thanks!
Wow, that is so informative, so clear and straight to the point. I've already looked at a lot of videos, and all I got is a headache. I wish I had seen your videos earlier. Thank you so much!! 🥰😍
Knowing that you went to finance school and still didn’t learn any of this. Like, omg?? Makes me feel better having gone to art school and lost the first 5 years having zero investing knowledge. Thanks Rose!
School absolutely does not teach any of this.
hahaha same here ! but Engineering school! :P
@@sidb9540 Civil engineer here lmao, tryna prep for my future
I got my degree in accounting and took several finance and economics classes. These classes definitely taught what she said in this video. If she didn't learn this with a finance degree, she probably wasn't listening in school or went to a bad school. My guess is she probably did learn this in school, but didn't grasp it until later.
Hi Rose, thanks for the the simple explanation. However, you missed one of the most important benefit of ETF over Mutual Funds. And that is control over when tax liability in incurred. As a share holder of Mutual fund, we have tax liability whenever the fund trade its holdings even when we retain our holdings. On the other hand, we ONLY incur tax liability with ETF's when we sell, giving us control of timing of the tax liability, like we have with individual stocks. This can be quite valuable if you wish to defer taxes for years in a taxable account.
Don't stocks in both mutual funds and ETFs pay dividends, so you still pay taxes annually on dividends? You just don't have "capital gain distributions" on ETFs?
@@joeb1522 Yes, no capital gain distributions on ETF's. Dividends treated the same for both.
With the ETF though, do you still get the Capital Gain? For example I hold Vanguard Long Term Investment Grade Bond as an alternative to cash savings, chasing that 3% dividend versus pathetic savings/CDs. The capital gains each year are also significant but I figure hey, LT cap gains tax is better than income tax (I am in 32+% bracket). Am I doing something wrong?
A few more points Rose neglected to mention. You can also stop out of an ETF in the middle of a session if everything goes South. I remember what it was like riding my 401 mutual funds all the way to the bottom in 2009. Had I been in ETFs I would have stopped out near the top and had all of that additional capital to invest on the way back up. Also, most Mutual funds have a legal requirement to be mostly invested at any point. This means they can't just sit around in cash when that is the right thing to do. With ETFs, I can go to cash quickly and stay there as long as I need to.
@@lukemurphy9831 & Joe B, Yes you're both right. For ETF's, taxes on dividends are incurred as they are distributed, but Capital gains & loses are incurred when we sell the securities. I tend to buy leveraged ETF's such as TQQQ, TECL & ERX, where dividends are often fairly small when compared on potential Capital gains (or losses).
Thanks, You really make this a lot easier than I thought it would be.
I've stumbled upon your video and I'm so grateful I did. I'm In the process of studying for my securities license and your videos are clarifying things for me already💛
Honestly, this vid was extremely helpful to the beginning investor (me). Also interesting to see how much your channel grew since 2019 and the knew surge of investors that came in the following years.
@Investing with rose nice try, the real investing with rose wouldn't reach out to a comment on a vid 8 months old out of the blue and respond to some random dude.
Also your acc is fake.
Good luck scamming ppl
The 2 dislike are mutual fund managers lol
vale v Hahaha 😂
vale V, you are not alone in that thought !!!
Some r good
Or people who trade commission-free, which is more and more common. I pay zero fees to trade in my Roth IRA, and can even buy fractional shares. So I wait for dips in the strongest stock in popular ETFs and place a few trades per month. No fees, no commissions
...to be clear, I gave the video a like because it was a very good, clear intro to these three investment options. I just think the logic falls down when you factor in free trading
I love your channel so much! It's so informative and easy to understand!
Excellent way of comparing/contrasting these types of funds. Thank you :)