WWII 058: Part 1 of ETFs - How ETFs are Created, Learning Fundamental Analysis, Long Term US Bonds for Safety, Fed Eyes Balance Sheet Shrinkage

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Main Topic: How Exchange Traded Funds (ETFs) are Created

You can't open a magazine or newspaper on the subject of investing without running into an advertisement for an Exchange Traded Fund. This fairly new type of security is proliferating faster than a bed full of bunnies.

Exchange traded products are proliferating, but more of them are also dying off. A record 128 exchange-traded notes and funds were closed during 2016, bearing the previous record by 26. Over-all numbers rose by 112, to 1,960, and assets swelled by more than 20% to $2.56 trillion. “Industry watchers have been concerned that expansion has come too quickly and shakeout of some sort is probably duel” Reported in Barron’s credit to CNBC.com

Read the rest of the extensive blog post I did on how Exchange Traded Funds are available including an example using the loveable Yak as the asset class.

Ask JB: Learning Fundamental Analysis and should you invest in long-term US Treasuries?

: Learning fundamental analysis (self.investing_discussion)

submitted 1 day ago by MrHackberry

Are there any good resources on learning the basics of fundamental analysis, and learning to properly read the balance sheets and such of companies?

If it matters: I'm a fairly new investor, with about 20 000 NOK (about 2350 USD) as an initial investment, going for a dividend centered strategy.

JB Says: There are two disciplines to study, accounting, and financial statement analysis. Go on Amazon, and buy a basic accounting book and study it cover to cover, doing all the practice questions. Accounting is the language of business.

Next, study the financial statements analysis book in the same manner. From there, if you are still awake and interested, move on to advanced financial statement analysis, then business valuation.

Ask JB

Long-Term US Bond help (self.investing_discussion)

submitted 5 days ago by justdoit4265

I need a Long-Term bond that promises principle protection. How do I make that happen? What's the best option?

JB Says: There are two answers to the question. First, US Treasuries are the most secure bonds on the planet, no matter what anyone says about them. Second, long-term treasuries should be issued with a warning label. The price of the bond will fall over time with rising interest rates. If you pay more than face value for the long term treasuries, you will have a capital loss, offset by interest you will receive.

Whether or not you should be investing in Treasuries will have much to do with your financial situation. But in general, understand the relationship between bond prices and interest rates and you will be in position to make decisions.

Do you have a burning question on investing you would like answered? Click the button below to send it to me and I will answer it on the podcast!

News: A new 4x Levered Index ETF has been filed with the SEC, and the Federal Reserve mulls over shrinking its balance sheet

http://www.cnbc.com/2017/04/12/feds-kaplan-says-balance-sheet-plans-wont-shift-rate-hike-path.html

http://www.barrons.com/articles/leveraged-etfs-raise-the-ante-1491627055

About the Author

Jeremy Scott Bailey is an investor, author, entrepreneur and host of the "What Works In Investing?" podcast now available on iTunes. He is founder and Chief Investment Officer of Burgeón Group, Inc. an investment advisory firm that provides portfolio management services to families and individuals.

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