Tuesday, 25 October 2011

Can I profit from a Portfoli of ETF's?

So I want to get some mutal funds and invest $1000 nothing big just trying to start of. So I'm going to setup a starter portfoilo with Schawb but a diversifed one with four different mutal fund offerings. I like it because I can buy and sell ETFS online without a transaction fee. I need four to get going and it will be a moderate risk for a young investor like Myself so here is my plan I will buy them in this amount and order

Schwab US Large-Cap ETF (SCHX) Exp 0.08% $300
Schwab US Small-Cap ETF (SCHA) Exp 0.13% $200
Schwab International Equity ETF ( SCHF) Exp 0.13% $200
Schwab U.S Aggerate Bond ETF (SCHZ) 0.10% $300

So I covered the $1,000 minium needed to set up and have four diverse portfolis, so for those of you who understand business and this market do you think this is a good idea and how much will I profit? thanks.

Ans:


Sure you can profit from a portfolio of ETFs.. if they do well. People can also lose. Personally, I don't trust the market, at this time though you ARE approaching the traditional "Santa Claus Rally" time of year. Nonetheless, profit is not guaranteed, and the market may swing wildly towards the first half of next year considering worldwide economic events.
ETFs for the most part tend to be more volatile than mutual funds.. depends on selection.
While some ETFs model their trading similarly to certain mutual funds, and some mutual funds may contain ETFs, an ETF is not the same thing as a mutual fund, and brokerage fees for trading an ETF vs a mutual fund may be different. The costs of trading either will depend upon which brokerage you use.
Off the top of my head guess, you could make up to 10-15% profit optimistically by the year's end, 7% more realisticaly, and lose that and more by March.

Source(s):

like they say in the Grinch song.. "I wouldn't touch it, with a thirty-nine-and-a-half foot pole."

0 comments:

Post a Comment

 
Design by Free WordPress Themes | Bloggerized by Lasantha - Premium Blogger Themes | cheap international calls