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Will Ray, Jr.
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Will Ray, a former Registered Investment Manager, began his career with Bear Stearns in the Institutional Equities Department. Will formed a few Computer Driven Program Trading Groups in a strategic alliance with Investment Technology Group (NYSE:ITG), and the technology created by Sun... More
  • To Buy An ETF or To Not Buy an ETF, That Is The Question. 0 comments
    Jul 30, 2009 12:56 AM
     The Exchange Traded fund newsfeed seems to be all the rage.  As I sit back after twenty years I actually remember the first exchange traded fund. SPY or Spiders.   The Standard & Poor's Depositary Receipts were launched by Boston asset manager SSgA State Street Global Advisors on January 29, 1993 as the firstexchange-traded fund in the United States (preceded by the short-lived Index Participation Shares that launched in 1989); and are part of the SPDRs ETF chain.[1][2][3] Devised by American Stock Exchange executive Nathan Most, the fund first traded on that market, but has since been listed elsewhere, including the New York Stock Exchange (NYSESPY).

    According to web glossary InvestorWords.com:

    One SPDR unit is valued at approximately 1/10th of the value of the S&P 500. Dividends are distributed quarterly, and are based on the accumulated stock dividends held in trust, less any expenses of the trust.[4]

    With a market capitalization of $70.7 billion as of June 2009, it is the largest exchange-traded fund.

    The sponsor is PDR Services LLC, a wholly-owned subsidiary of American Stock Exchange LLC.

    The Inventor, Nathan Most, died at the age of 90 in nearby San Mateo, California.  He had a good idea but so did the founders of mutual fund companies.  One can only ask themselves what is really the most important thing in investing.  Well, it is not ETF's, Mutual Funds, Stock or Bonds.  The answer to your nightmares is a tactical asset allocation strategy.  Other than that you should be Indexing your money for lower fees.

    Asset Allocation accounts for 95% of portfolio return after you get done buying all of these innovative strategies with fees.  I could devise 10 new ways to own securities from option strategies to emerging market mutual funds or private equity shares, but it doesn't mean a thing when it comes to return.  What matters most is how all of these securities correlate, complement and work together or against each other.     

    I recently discovered the smartest asset allocation strategist on the planet, even Sergey Brin would pay attention to this guy.  Google Finance needs our help if they really want to "Do Know Evil."  Words for the Googlers, come from an older Secretary who told me when I first entered Wall Street, "If you are still doing this once you find out what is all about you are real smuck."

    Bon Vivant

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