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🦧 mutual fund vs etf
🤔 why even bother?
we once only cared about mutual funds… but somewhere down the road, etf’s became cool and now there’s a huge difference in fund flow between mutual funds and etf’s
💡 what’s the difference?
it's a little more interactive investing in an etf
an etf can be bought and sold intra-day just like any other stock
i.e. SPLG 0.00%↑ (buying one share of this, your effectively getting exposure to companies in the s&p500 index!)
mutual funds can only be bought at the end of each trading day
mutual funds have been around since 1924 (think fidelity, ishares, vanguard, charles schwab, etc.), the first etf was only launched about 30 years ago (i.e. SPY 0.00%↑ )
active vs. passive
mutual funds are traditionally run by an active manager, making frequent buy and sell actions in an effort to play the market accordingly
etf’s are designed to follow a particular index in the market (not just the s&p500 - QQQ 0.00%↑ follows the nasdaq index)
💰 i am team etf
vanguard’s VOO 0.00%↑ (etf) and vfiax (mutual fund) do the exact same thing, but the etf has a slightly lower annual fee since it’s passively managed without much frequent human effort
imo: why not pay less fees for investing your money into an etf that does the exact same thing as a mutual fund?
vfiax requires a much higher initial minimum investment (aka $3k). a share of voo is less than $360 as of writing
saving your money early into the s&p500 will have a worldly difference in the amount of returns you’ll have years down the road
i don’t like that people have to wait till they save up $3k to get a foot in the door for most mutual funds
💡 something im thinking about
portable mini bonfires yo! waiting for my first one to come…!
all of this is just one ape’s thoughts, but I would love to hear what you want to know about! happy trading!
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