Choosing ETFs that are right for you
Happy Tuesday!I hope your week is off to an amazing start! What's happening in this weeks edition:How to choose an ETF that's right for you Why I prefer ETFs to single stocks 4 most popular types of ETFs Do you invest in ETFs? Latest economy news (Inflation, GDP, Mag 7 earnings reports, Mortgage rates) How to choose an ETF that's right for you - 5 questions to askFirst, what exposure does this ETF have? What are the holdings inside the bucket of stocks that the ETF is tracking? Second, how well does the ETF deliver this exposure? What are the tracking errors between what the fund tracks and the funds performance. Third, what is the expense ratio of the ETF how much does the ETF cost to own? The lower the expense ratio the better. Fourth, what is the current trading price of the ETF? Fifth, what is the past performance of the ETF? (past performance does not indicate future returns) Here are 4 of the most popular types of ETFs:BROAD-BASED ETFS - ETFs that track a broad bucket of stocks that track a broad equity index as it's benchmark. (i.e. the Russell 3000 Index, the S&P 500, or the Wilshire 5000 Total Market Index) VALUE ETFs - ETFs that track a bucket of low-cost stocks that focus on more stable companies. Value ETFs tend to come with higher dividend yields but lower expected earnings growth in the future. GROWTH ETFS - ETFs that track a bucket of stocks that focus on fast-growing and more volatile companies in hopes of realizing above-average returns. HIGH DIVIDEND YIELD ETFS - ETFs that track a bucket of stocks that focus on companies with a track record of paying relatively high dividends. If you invest in ETFs, let me know what are you favorite ETFs?Respond to this email and let me know. ▶️Check out the latest ETF news at ETF.com and get my favorite ETF comparison tool that I use Here Other News:Investors Keeping a Keen Eye on Friday's PCE Inflation Report, Q1 GDPKey inflation data will be coming out later this week. First, the personal consumption expenditures (PCE) will be released on Friday. This is the FEDs preferred inflation reading, which they use in making decisions about rate cuts and their next move to meet their 2% inflation target rate. Inflation is continuing to cause problems for the FED and consumers. The stronger (higher) and the more persistent and sticky the inflation reading, the less likely we will see any FED fund rate cuts. The FED is already kicking the can down the road on potential inflationary fed fund cuts until later this year, if at all, in 2024. Also tapping in later this week is the 1st iteration of the 1st Q 2024 GDP growth. This is the first of 3 progressively more accurate readings from the 1st Q GDP figures. This is important for institutional investors and retail investors to watch closely to determine the path of future rate cuts from the FED. Magnificent 7 Q1 Earnings Reports Are Due This WeekThe magnificent 7 stocks Tesla, META, Alphabet, Microsoft, Amazon, Apple, and Nvidia are all set to report their quarterly earnings in a few days. These 7 company's are the top holdings in the S&P 500 and they were also the top performers in 2023 for single stocks. For the most part these tech stocks have outperformed and carried the S&P 500, and the total market, over the last couple of years. However, as we know Tesla is down 40.8% year-to-date. I'm all in on ETFs, but if you are thinking about a single stock to purchase, there may be a buying opportunity right now with Tesla. We'll see what happens as these earnings reports come in later in the week. Mortgage RatesNational mortgage rates edged higher for all types of loans compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed and 15-year fixed are below. Remember, fixed mortgage rates follow the 10 year Treasury yield, not the FED funds rate. My ServicesAre you interested in Me helping you on your financial journey to financial freedom? Click 1 on 1 Personal Financial Mentoring and Coaching for more Schedule your 1 on 1 time with me Follow me on social mediaVisit smartmoneybro.com for more Thank You for your continued support! My mission is to help you make, manage, save, and invest more money! My goal is to empower 100 million people to win with their money by teaching, sharing information, and showing people how to take their personal finances to the next level. |
