Speaking Atop an Iron Mountain

October 3, 2007
By seadmin

I just returned from a speaking engagement in Las Vegas. First off, let me just say that I had a great time! Sorry, I can’t provide any more detail than that because, as they say, whatever happens in Vegas stays in Vegas.

One thing I can tell you is that I spoke to a group of employees from IT storage firm Iron Mountain (IRM). At this meeting, I met many smart IT professionals who were very interested in developing a plan of action for their 401(k) assets.

After helping them understand what was in their 401(k) plan, and how to best take advantage of their plan’s choices, I asked for a show of hands as to how many people had heard of exchange-traded funds (ETFs).

Much to my surprise, I didn’t get a single raised hand.

After I provided a briefing about what ETFs are and why they are so advantageous to the individual investor, this smart group of professionals asked the logical question, "Doug, why haven’t we heard of ETFs before?”

The answer is that there is no financial incentive in the marketplace for brokerages or financial advisors to sell ETFs. There is no big commission charge, no 12b-1 fee, and no cryptic investment philosophy associated with ETFs.

In fact, buying an ETF is just like buying an individual stock in terms of the commission, and there are no hidden fees a brokerage firm can charge you. The holdings and passive management style of ETFs are transparent, meaning you’ll know exactly what you’re getting with your ETF purchase.

This experience with Iron Mountain made me realize that while ETFs are "old hat"to some investors, many well-educated, bright professionals have yet to find out about these fantastic investment tools.

Until the vast majority of individuals in any group I speak to can say that they have not only heard of, but are using ETFs in their own portfolio, I will continue singing the praises of ETFs.

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