In this video, financial advisor James Pommert gives us a sneak peek into how we can help you explore, understand, and choose investments that are properly aligned with your long-term goals — even when things like mutual names can be misleading.
Related: 7 Important Things to Look for in a Financial Advisor
“What does the color of a pen cap tell us about the ink inside of the pen?” James asks, illustrating that just because a pen has a pink cap on it, the ink inside may be a different color entirely.
Investment funds can often be the same. For example, while you might think the Vanguard Small Cap Index fund contains only small cap stocks, it actually includes a mix of small, mid-cap, and even some international stocks.
“When you actually look into the holdings of many ETFs, mutual funds, and different investments that are out there, what the fund actually holds can be very different from the name itself,” he explains.
Adding to the complexity, there are not standardized methods for how companies like Fidelity and Schwab classify what “small cap” actually means – making it hard for investors to navigate the nuances.
Related: 8 Common Money Mistakes Young Physicians Make (and How to Avoid Them)
Understanding these intricacies can significantly impact your investment experience and your portfolio’s return. Of course, you don’t have to scroll through hundreds of stocks between your hospital rotations. Our team works alongside you to find out which “color” the ink truly is, so you aren’t left with any surprises in your investments.
Press play to learn more about how we can help you in your financial planning journey, and be sure to explore our library of other resources for early career physicians.
Chapters
- 00:00:00 – What does a pen cap have to do with investing?
- 00:01:08 – Why the name of a fund can be slightly misleading sometimes.
- 00:01:34 – James walks through an example of a Vanguard fund.
- 00:02:48 – Advisors can help ensure the funds you’re choosing align with your goals.
- 00:03:21 – Vanguard, Fidelity, Schwab, and other companies often classify funds differently.
3 Key Takeaways
- Just like a pen cap can be a different color than the ink inside the pen, investment funds don’t always align exactly with what you’d necessarily expect.
- Various companies may classify funds differently, making it difficult to judge a fund based purely on its name.
- When it comes to investing, an advisor can help you to verify the fund holdings before making any decisions.
Explore Your Investment Options with Equitta
We help our clients find investment opportunities that align with their goals and risk tolerance. Want to learn more about our services? Click here to schedule a meeting with a member of the Equitta team.
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