ETF Liquidation: What Happens When An ETF Closes

ETF LiquidationThere is no denying the popularity of ETFs. As we watch this market continue to grow, it’s only natural to see the unsuccessful funds fail along the way. This leads to ETF liquidation and investors worried about their money.

When an ETF closes, it’s not a guarantee you’ll lose money. The good news is there are steps you can take to avoid these unsuccessful ETFs and ways to deal with the liquidation process if it happens to you.

Warning Signs

So why does an ETF get shut down? The same reason any fund does – a lack of invested money. There are several reasons for this, which happen to be the same reasons to avoid suspect ETFs: Continue Reading…

The Beginner’s Guide To Smart Beta

Smart BetaThe rise of index funds, and the low-cost price wars, has changed much of the financial industry. The days of high cost active funds are dwindling. But if the financial industry is good at anything, its finding a way to reinvent itself, at the expense of your wallet.

Introducing Smart Beta – the newest iteration of index funds and ETFs that try to push the boundaries of performance. Some succeed, others won’t, but collectively, these smart beta funds make up a range of strategies.

In other words, you have more fund choices, with a range of differences, some more confusing than before, and more are coming. This guide is meant as a starting point to learning more about smart beta ETFs, how it works, and what you should know before buying the hype. Continue Reading…

Are Treasury Floating Rate Notes For You?

Treasury floating rate notes

The persistent fear over rising rates drives demand for investments that protect from interest rate risk. Now you can add Treasury floating rate notes (FRNs) to that growing list.

At the start of 2014, the Treasury auctioned its first floating rate notes. Since then FRN ETFs started popping up as another way to own these notes. But should you? Are there better options available?

How Does It Work?

The Treasury floating rate notes are a 2-year maturity government bond (with all the same guarantees) with the addition of an adjustable interest rate. Continue Reading…

How To Start An Automatic Investment Plan

Set up Automatic Investment PlanThe best way to make a habit of saving and investing is to automate it. It throws behavior out the window, removes mistakes (or lowers the chance of it at least), and enforces discipline without trying. All you have to do is start an automatic investment plan.

Automatic saving has been around for years. Now there are tools available to help you automate investing.

Automatic Investing Works

Making systematic, monthly investments is the best way to stick to your goals. Anytime you automate that process it increases your chance of success. Not to mention, it makes it simpler for you. Continue Reading…

Pay Off Debt Or Invest: What’s The ROI?

Pay Off Debt or InvestThe first rule of wealth creation is to spend less than you earn. The result is extra money you can save and put to work. When choosing between whether to pay off debt or invest, what’s the best use of your money?

Both play a role in a smart financial plan. But basic math says – whatever gives the best return on your money. To simplify things, here’s a formula for dealing with this question.

  1. Get that 401k match
  2. Pay off highest interest debt first
  3. Pay off short-term over long-term debt
  4. Refinance to lower rates when possible
  5. Extra money towards debt is a guaranteed return every time

I’ll explain below. Continue Reading…