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The Kauffman Foundation released a 60-page hatchet job on ETFs, alleging that they (and not the...

The Kauffman Foundation released a 60-page hatchet job on ETFs, alleging that they (and not the underlying stocks) set the prices of small caps, discouraging small companies from listing in the U.S. and creating systemic risk of market instability. But the report "reflects a serious misunderstanding of how ETFs work," says Dave Nadig.
Comments (6)
  • SA Editor Jonathan Liss
    , contributor
    Comments (472) | Send Message
     
    Here's the link to the full report in pdf form: www.kauffman.org/uploa...

     

    At first glance, Nadig appears correct - the purpose of this report seems to be to defame ETFs without very compelling supporting data. The fact the keep referring to ETFs as 'derivatives' is just the first indication of that.
    8 Nov 2010, 06:00 PM Reply Like
  • Jackson999
    , contributor
    Comments (468) | Send Message
     
    Not necessarily a hatchet job!
    ===========
    Bloomberg Businessweek
    July 22, 2010

     

    Amber Waves of Pain
    Lured by the idea of profiting from raw materials, investors put $277 billion into commodity ETFs and related securities by the end of 2009. Then they noticed a problem: When commodities go up, the commodity ETFs often don't.

     

    ...

     

    www.businessweek.com/m...
    8 Nov 2010, 09:38 PM Reply Like
  • Scootger
    , contributor
    Comments (228) | Send Message
     
    If every(dont really even need every) retail investor buys one share of an ETF over the next few years. And I short a few that I quantify will be more than likely to go to zero, or close enough, during the next market correction. Then the market corrects. Then I cover my ETF at zero. I make money. Patience, its coming. ETF distributors continue to suck unsuspecting investors into buying their products with comedic television commercials. I do feel bad for the these people, but that will not stop me from making money off of their mistakes.
    Do fundamental research retail investors, find a company you like, and buy the stock, dont forget to sell it at some point when you make money, dont be lazy and buy ETF's. You do not have to believe this article that has been written, but listen to what these men are warning you of.
    8 Nov 2010, 11:03 PM Reply Like
  • kmi
    , contributor
    Comments (4040) | Send Message
     
    See, for a lot of folks, buying stocks is not easy. That's why mutual funds were/are so popular. The pitch that you can have a pro picking your stocks for you and not have to manage your portfolio is a good one.

     

    ETF's pitch that the fees are lower and all the jazz makes even more sense for a hands off guy. I can see their attraction. And sometimes, following a broad index makes sense, like say I believe in Chile but have neither the time nor acumen to track individual stocks, I can buy ECH.

     

    I think the fact that a lot of folks have retirement funds but can't or won't spend the time doing research and watching/reading news is why ETFs are so popular, and I don't fault anyone making money off them. But it's hard to suggest that folks in ETFs are sheep looking/wanting to be slaughtered.
    9 Nov 2010, 07:25 AM Reply Like
  • Scootger
    , contributor
    Comments (228) | Send Message
     
    I cant wait for the ETF that tracks every stock in every country, in one easy 3 letter symbol. Every retiree can own it and be fully diversified!
    9 Nov 2010, 06:04 PM Reply Like
  • Jacob Wolinsky
    , contributor
    Comments (464) | Send Message
     
    I heard this guy on bloomberg yesterday and I have no clue what he is talking about. ETFs are great for retail investors who want to buy a certain sector. I really think his arguments were incoherent.

     

    www.valuewalk.com/
    10 Nov 2010, 01:12 PM Reply Like
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