Posted: 9/11/2015 9:56:21 AM EDT
Vanguard offers ETF funds, i have a T bill account with Vanguard that gets a whopping 17 cents a month interest.I don't want to open an account with a broker, just use Vanguard. I am interested in transfering $5,000 into a Vanguard ETF in a S&P or Dow ETF. What are the basics of ETF's? Can to get in and out of ETF's every 2 or 3 days, then when the market corrects it's self in a few days get back in? I am not looking to live off thev profits from an ETF, just make $400 or $500 a year in profits. I am a novice and need basic information, and strategy. A hot link to a basic ETF site or a ETF 101 link would help. I am retired a truly on a fixed income, just live on a pension.  |
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While I wouldn't recommend your in/out plan, yes, it's sort of possible: brokerage transactions take 3 business days to settle, so you could sell one day and buy back in on the 4th day.
Do you understand mutual funds? ETFs are mutual funds with continuous pricing (as opposed to MFs which are only priced after the close). The advantage of ETFs is that you can place normal brokerage-type orders (limit, market, etc.) which cannot be done with MFs (MFs are always bought sold at the end of the day after the price is calculated. |
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For long term investing, Vanguard is an excellent choice. Very low fees, free trades for Vanguard ETFs and Mutual funds, etc. However, if you're wanting to do lots of high speed trading, market-timing and speculation and other high risk activities, Vanguard probably isn't the best platform for you. Given that you're asking a very basic investing questions (and it's a good thing to ask), it seems very unlikely that you'd be able to time the market. There are plenty of people out there much smarter than you and me and they have access to industrial grade computer modeling programs, and they still can't consistently time the market. If you want to take some small portion of your portfolio (5% or less) do some speculative investing, go for it. It's kinda fun. I bought GOOG in 2007 for $323 and sold it for around $600. I thought I was pretty awesome then. Of course, if I'd held it, I'd have a lot more now. I also bought GLD at $63 and sold at $92, so that was cool. On the flip side, I bought SLV at $44 a few years ago. Yup, right at the peak. Yeah, it's nowhere near that now. But, it's mostly play money. I'll hold SLV forever and see if it ever gets back there. Most of my 401k is in VTI, VOO, etc. I buy more every month and just leave it there. If you want to more consistently make money and buy low/sell high, go read up on dollar-cost averaging. Just my opinions. Of course, I could be totally wrong. |