Soon you would need a super computer to invest in ETF

Roger Nusbaum is pointing out some information about 16 more ETFs poised to enter the market soon. ETF were supposed to simplify investors life and reduce fees. With a choice of over 300 ETF by now, the decision to invest in which one is not going to be easy. Ultimately again if you want to outperform the market, you will need to chose the right one. Ultimately it will boil down to equity selection.

One of the eternal problem in investing world is of managing complexity and choice. One of the ways to manage this complexity problem is to concentrate on equity selection or vehicle selection methodologies. No matter which religion you follow- growth or value ultimately it all boils down to equity selection.

The idea behind ETF was to eliminate the complexity involved in vehicle selection process. But with so many choices, it has come full circle. If you are going to concentrate on vehicle selection as primary out performance strategy, then why ETF and why not individual stocks.

This complexity is the reason why intermediaries like mutual funds, investment advisers, hedge funds, brokerage analyst and newsletter writer will continue to survive. It is a basic human nature, when faced with complexity and choices, seek an expert. Long intermediaries. Short too many ETFs.


walter said...

AA halted! they seem to have missed...

any other earnings tonite that we should be following?

Pradeep Bonde said...

I do not watch after hours, mostly there are false moves. Whatever has to rally will rally for days similarly something going down will go down for days.
It is no fun competing with day traders.

Pradeep Bonde said...

This lists all earnings announcements due today.

Unknown said...

new roubini post - it's a doozy:


whether you agree or disagree, you gotta love him...

Pradeep Bonde said...

I read him, find him highly entertaining but do not follow him. The reason is spelled out in one of my earlier posts.

Don't follow an analyst unless you understand Cognitive Dissonance