http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf Is There a Best Time to Put Your Money into an ETF? ETFs (Exchange Traded Funds) have become an increasingly popular means of investing in stocks. Today we consider this. Is there a best time to put your money into an ETF? But first, here is a little refresher about ETFs. Many investors have switched from mutual funds to ETFs. Investopedia explains the difference between exchange-traded funds and mutual funds. ETFs trade throughout the trading day, like stocks, while mutual funds trade only at the end of the day at the net asset value (NAV) price. Most ETFs track a particular index and as a result have lower operating expenses than actively-invested mutual funds. Thus, ETFs may improve your rate of return on investments. In addition, ETFs have no investment minimums or sales loads, unlike traditional mutual funds, which often have both. And there are tax benefits to ETFs versus mutual funds. ETFs create and redeem shares with in-kind transactions that are not considered sales. Thus, taxable events are not triggered. Redemptions create tax events in mutual funds, but they do not create tax events in ETFs. When a forced sale of stock occurs, mutual funds record and distribute higher levels of capital gains than ETFs. In addition, ETFs have greater tax efficiency due to a structure that allows them to substantially decrease or avoid capital gains distributions altogether. This difference can greatly affect the overall rate of return, even if an ETF and mutual fund both track the identical index. Passive investors have found that, all too often, managed funds like mutual funds do not do as well as the overall market. Because ETFs are typically index funds, they track the market. So, ETFs may well be an ideal way to invest. But, is there a best time to put your money into an ETF? It turns out that there is! Is There a Best Time to Put Your Money into an ETF: When Outflows Are High Market Watch reports on a study by Deutsche Bank in an article about why it pays to be a stock market contrarian.

1. IS THERE A BEST
TIME TO PUT
YOUR MONEY
INTO AN ETF?
By www.ProfitableInvestingTips.com

2. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
ETFs (Exchange Traded Funds) have
become an increasingly popular means
of investing in stocks.

3. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Today we consider this. Is there a best
time to put your money into an ETF?

4. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
But first, here is a little refresher about
ETFs.

5. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Many investors have switched from
mutual funds to ETFs.

6. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Investopedia explains the difference
between exchange-traded funds and
mutual funds.

7. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
ETFs trade throughout the trading day,
like stocks, while mutual funds trade
only at the end of the day at the net
asset value (NAV) price.

8. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Most ETFs track a particular index and
as a result have lower operating
expenses than actively-invested mutual
funds.

9. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Thus, ETFs may improve your rate of
return on investments.

10. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
In addition, ETFs have no investment
minimums or sales loads, unlike
traditional mutual funds, which often
have both.

11. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
And there are tax benefits to ETFs
versus mutual funds.

12. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
ETFs create and redeem shares with in-
kind transactions that are not
considered sales.

13. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Thus, taxable events are not triggered.
Redemptions create tax events in
mutual funds, but they do not create tax
events in ETFs.

14. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
When a forced sale of stock occurs,
mutual funds record and distribute
higher levels of capital gains than ETFs.

15. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
In addition, ETFs have greater tax
efficiency due to a structure that allows
them to substantially decrease or avoid
capital gains distributions altogether.

16. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
This difference can greatly affect the
overall rate of return, even if an ETF and
mutual fund both track the identical
index.

17. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Passive investors have found that, all
too often, managed funds like mutual
funds do not do as well as the overall
market.

18. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Because ETFs are typically index funds,
they track the market.

19. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
So, ETFs may well be an ideal way to
invest.

20. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
But, is there a best time to put your
money into an ETF? It turns out that
there is!

21. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Is There a Best Time to Put
Your Money into an ETF:
When Outflows Are High

22. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
Market Watch reports on a study by
Deutsche Bank in an article about why it
pays to be a stock market contrarian.

23. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
According to Deutsche Bank, not only
can going against the current provide
dramatically better gains over time than
following the herd, but it also does
notably better than a simple buy-and-
hold plan.

24. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
The investment bank conducted a study
examining how exchange-traded funds
performed following periods of high
inflows or outflows.

25. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
While flow data can be messy – not only
are they extremely volatile for the
largest funds, but inflows can mean an
investor is building a short position,
which means he or she is betting the
fund will decline in price – the results
were dramatic.

26. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
A portfolio that bought exchange-traded
funds with substantial outflows saw
significantly higher gains than one that
moved with the herd – buying funds
with heavy inflows.

27. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
This is a simple example of the
investing maxim to buy low and sell
high and is the basis of contrarian
investing.

28. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
It is also typically consistent with the
use of intrinsic stock value analysis as
a guide to investing instead of simply
following the herd!

29. http://profitableinvestingtips.com/stock-investing/is-there-a-best-time-to-put-your-money-into-an-etf
According to the Deutsche Bank study,
an investor who always buys when
inflows are highest will earn less than
50% of what someone earns who
always buys when outflows are highest!