I always like to find real experts, people who are educated in financial matters, certified financial planners, who agree with me. Of course I ignore the ones that donít agree with me but donít we all. Actually I listen to them too but I decide if Iím going to give their arguments any credence.
My feelings about investing, specifically investing in index funds versus actively managed mutual funds or even picking stocks yourself, have been discussed in previous posts ( Products and Experts). And Iíd like to offer this article as vindication. Smart Money asked William Bernstein of Efficient Frontier Advisors if he was against all forms of active investing. Even ETFs.
Bernstein: ďIím not tatally against active investing. I think if you diversify properly, itís OK to invest activelyÖThe average Vanguard plain-vanilla index fund is probably slightly better than the average ETF.Ē
This post on PFBlog also references a Smart Money article and quotes:
ďOf course, apples to apples comparisons of index fund fees with ETF fees arenít exactly fair to begin with. Thatís because, for now, ETFs can be purchased only through a broker, a transaction that in itself involves a fee. Most index funds, on the other hand, are available without a transaction fee when purchased directly through the issueing fund company.Ē
The above statement sounds a lot like this from my post titled Products:
ďthe nature of ETFs lends itselft to active trading, with a transaction cost every time you buy or sell.Ē