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Redrick Terry:
4 Your Money time. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. David, welcome back.
David Nelson:
Thanks, Redrick. Appreciate it.
Redrick Terry:
Of course. We’ve seen some regulation recently that seems like it has potential to be a good thing for investors. What is some of that regulation?
David Nelson:
It’s going to be. This is significant. Again, this is a topic we seem to talk about some of this stuff to the, to the average person out there and many times I’m sure they could care less. Again, it’s important as far as your financial future. This chart here is going to help walk us through as far as a little bit of this. Now, an ETF basically is a exchange traded fund. It’s very similar to a mutual fund, except in many, many ways better. The transparencies as far as with ETFs is much better. The ability to get in and out of them is quicker and easier. They’re probably better in most particular situations. The problem has been, there’s been some inconsistencies with the SEC as far as approving some and not approving any product that’s out there. They’re trying to clean this up, and I think they’ve done a really nice job as far as in this area. What it’s going to mean is more opportunity and more options as far as for individuals that are out there. So, again, big picture what this as talking about is making ETFs more available to the average person out there. It’s simplifying, as far as the rules. And at the end of the day it’s going to create more opportunity for individuals.
Redrick Terry:
What would that mean as far as impact-wise for investors?
David Nelson:
I think the biggest thing centers around bonds and it centers around actively managed ETFs. Most ETFs are passive investments, which is a fancy way of saying you put your money in and there’s really nobody driving it at that point in time. So, you buy the S&P Index and you own the Index. What this allows, as far as it makes much clearer, is the ability to create ETFs that they can actually manage. Now, the costs will go up incrementally, but the bottom line is they’re hoping that the benefits, as far as that will come along with it, are going to be much more significant.
Redrick Terry:
Yeah, it seems like it could have a significant impact on the future of investing. What do you think that impact will be?
David Nelson:
More options, lower costs. That’s probably the two biggest items. People are going to see costs come down even more than they already have. They’ve come down significantly over the last couple years, but I think we could see them driven down even more. And in options, as far as for people to invest in. So, this is really, really good news.
Redrick Terry:
Absolutely. David, thanks so much.
David Nelson:
Thank you, Redrick.
Redrick Terry:
As always, we appreciate you. If you missed any part of our conversation, we’ll make it available for you on our website, OurQuadCities.com.
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