ETFs vs. Mutual Funds
First, I would never hold mutual funds in anything other than a tax advantaged 401(k) or an IRA and specifically, in my case, I hold mutual funds as the core position in my retirement account.
I am willing to pay expenses (management fees) when I want an actively, professionally managed fund that I plan on holding for a very long time. In my retirement account I have allocated 50% of the total portfolio as core holdings to these mutual funds.
20% - FFFDX - Fidelity Freedom 2030
10% - FIGRX - Fidelity International Discovery
10% - FSPHX - Fidelity Select Healthcare
10% - FSPTX - Fidelity Select Technology
I’ll write more on why I’ve chosen these specific funds later (no, I don’t work for Fidelity Investments and they do not pay me for writing about them, although I wish they would). I keep these core holdings as a foundation, a base from which I work more aggressively to increase my returns. That’s where ETFs come in.
I regularly use ETFs for shorter term trading strategies when I cannot or do not feel comfortable picking individual stocks. Basically, I’m managing these positions by deciding when to buy, how long to hold, and when to sell them. See here for some examples.
I’m currently on hold, waiting for the markets to calm.
Labels: ETF, Mutual-Funds, Portfolio

