In a convoluted marketplace where neither buyers nor sellers want to get stuck with the lemon, a higher premium is starting to be placed on transparency, but it’s already one of the key benefits of exchange traded funds (ETFs).
There is a growing need by investors to feel more included in the financial and investment processes that take place, writes Bill Feingold for Minyanville.
Investors have become complacent in taking in the bottom line given to them by financial advisors that they have forgotten the value of transparency. Curiosity is one of humanity’s better attributes, never mind it killed the cat. If you don’t have it, it could kill your portfolio, too, as some investors have painfully learned this year.
- There is a need to make market-related policies more about the process and less about resulting outcomes. One example is the misleading attribute of market prices where a shown price is not necessarily the given price if everyone were to want to sell at the same time.
- Take take the time to ask questions. There is no need to know the intricate details, just enough to understand the basics. If someone tells you that you are over your head then it is likely that he or she does not fully understand the details well enough to explain it.
- Retain your logic, get involved in financial discussions, question the assumptions, and question the process.
Exchange traded funds (ETFs) are one of those type of investing tools that fully discloses information for the inquisitive and mercurial investor. Holdings are available all day, every day and easily accessible and understood. Investments are one area where a little mystery isn’t a good thing. Always know what you own.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.