Financial Ramblings

By: ispeculatornew
Date posted: 10.30.2010 (5:00 am) | Write a Comment  (3 Comments)

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Good Saturday to all of you! Our retirement website still has a couple of days left to enter the contest to win an Ipad or other top prizes! Click here to learn the details.  There were many good readings, you can check out some of them here:

M35 inc explained @ TheFinancialBlogger
Bill Gates: The Miracle seeker @ Rolling Stone
Tobacco stocks – where vice meets dividends @ TheDividendGuyBlog
What would make me invest in the stock market? @ Balance Junkie
Why following the crowd can lead to destruction @ KNSfinancial
Where will your retirement income come from? @ DoNotWait
Why currency hedged funds have large tracking errors @ CanadianCapitalist
Low cost index trackers that will save you money @ Monevator
Is Google a monopoly? @ The Big Picture
12 stock for 10 years update @ Curious Cat

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  1. Comment by Balance Junkie — October 30, 2010 @ 1:41 pm

    Thanks for including my article here! 🙂

  2. Comment by thewallstwench — November 1, 2010 @ 12:25 am

    The Truth About Exchange -Traded Funds
    Wikipedia defines an ETF as “an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and trades at approximately the same price as the net asset value of it’s underlying assets over the course of the trading day. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features.
    Well Wikipedia, that’s what we all thought too!! But those greedy little bastards that created each of those 1,000 supposed stock look-alikes carved out nice little niches for themselves. Let’s look at one shall we? Take “USO” as an example. One would think that “United States Oil” would have some crude futures in it, but it doesn’t. Not one single oil future. There are 7 types of US Bonds which make up 27.4% of the “oil commodity.” At least “USL” or “United States Oil, 12 Month Fund” has 24% of it’s holdings in crude futures. But it’s number one holding is still US Bonds baby. With a whopping 55.84% of it’s weight behind the good ‘ol government. They’re held in Fidelity and Goldman’s name though, because the US isn’t a custodial bank you know, and I’m pretty sure they aren’t self-clearing. They should really look into that though. You know, to lower their clearing fees and take advantage of the tax breaks they are passing through to Goldman. The same goes for all the other US ETFs we have: DNO, UNG, UNL, UGA, UHN, BNO, and USCI. All of these are owned by the government and have half their holdings in US bonds. I guess you don’t have to worry about the fact that commodity ETFs aren’t regulated by the SEC, and I almost got nervous when I discovered our 401ks aren’t FDIC insured.

  3. Comment by IS — November 1, 2010 @ 4:12 pm

    @thewallstwench – Some points missing in your analysis. Any ETF that holds futures (this does not apply to USO but almost all others) will be required to post margins on those… so they must hold cash. Remember that when you buy futures, no cash exchange is involved. You must post margin, and that is done by holding cash or you can hold government bonds (which give “some return”)… so it makes 100% sense for them to own government bonds. It is simply a more effective way to manage the fund.

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