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The Death the Mutual Fund: Matthew Murawski Explains Why ETFs May Be a Fit as Part of Your Investment Strategy

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Since the Great Depression, mutual funds have presented a great opportunity for everyday people to invest in the stock market. Rather than risking their fortune on individual winners and losers, investors selected groups of stocks, making them not only a more diversified investment but also more attainable to people who could not afford the high commission fees, in Murawski’s opinion. 

And for decades, mutual fund investing has been touted as a smart, principled financial planning strategy. However, those days may soon be coming to an end. As Goodstein Wealth Management financial planner Matthew Murawski explains, a new generation of investors may usher in a new investment strategy.

“We have a big shift in demographics,” Murawski says. “The Baby Boomer advisor has almost all classic mutual funds. But now, an exchange-traded fund does the same basic principle, but they are typically a lot less expensive and are more transparent and tax efficient.”

One of the most important distinctions between mutual funds and ETFs are the costs associated with each. Although Murawski still uses a few mutual funds, most of his portfolio contains ETFs – for the simple reason that they are generally less expensive and more efficient in his opinion.

“There are zero trading costs for an ETF,” Murawski says. “I can buy the S&P 500 index ETF for about a .03 expense ratio and not pay a commission. I can buy it or sell it whenever I want. But if I buy the same thing in a mutual fund, I’m going to pay a $12, $14, $16 commission every time through our custodian, TD Ameritrade.” 

With many Baby Boomer investors and advisors retiring, the guidance is beginning to shift toward a younger generation. And according to Murawski, new advisors and this new investing class are overwhelmingly choosing ETFs.

“I don’t know anybody under 40 buying mutual funds,” Murawski says. “If I said to a client under 40, we’re buying mutual funds in an account, a majority of them will ask, why aren’t we buying ETFs?”

This gradual transition from mutual funds to ETFs is being seen throughout the investment world. ETF.com has projected that in the near future, ETF assets will exceed mutual fund assets. And traditional mutual fund advisors are beginning to take notice. They are trying to adapt to the changes in the market, as well as changes in investment strategy, to maintain relevance with a new generation of investors.

“In my opinion, investors under 30 will never own mutual funds,”  Murawski says. “It would be like selling them a Discman. It is almost out of style. So mutual fund companies are being forced to change and come out with ETF versions of the same mutual funds.”

Another way that mutual fund companies are able to adjust is by offering what they call clean shares – dramatically reducing the cost of buying mutual funds. These represent important changes in the way mutual fund companies compete with the emergence of ETFs.

“In my opinion, In the end, those that are not innovating are losing massive amounts of assets,” Murawski says. “The pandemic alone brought millions of new investors into the market. And I do not feel those investors are not going to buy mutual funds.”

In the end, it comes down to cost and performance – and many actively managed mutual funds are not outperforming their benchmarks enough to justify their cost. Instead, investors are choosing ETFs, which can give them nearly the exact same thing at a lower price.

“When you don’t outperform and you charge more, it’s problematic,” Murawski says. “In my opinion, mutual fund companies are either dying or they’re innovating and moving toward a different structure.”

Matthew Murawski is a financial planner with Goodstein Wealth Management. He provides personalized wealth management advice to the firm’s 401(k) clients as well as his own individual clients. Murawski educates investors to help them work towards being positioned for long-term financial growth.

To learn more about Murawski and Goodstein Wealth Management, visit www.goodsteinwm.com or connect on Facebook, Instagram, and Twitter.

Michelle has been a part of the journey ever since Bigtime Daily started. As a strong learner and passionate writer, she contributes her editing skills for the news agency. She also jots down intellectual pieces from categories such as science and health.

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Business

The Power of Using Correct Communications Skills

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Effective communication at work can be transformative for individuals, teams, and businesses. We’re here to show you why communication is vital in the workplace and how to start building your and your team’s communication skills today. 

Communication skills are, however, more than just verbal or written in nature and include several non-verbal cues such as kinesics, proxemics, and paralinguistics, in addition to human centricity and being able to communicate in a soft touch low feel world successfully. 

It is about communicating positively with clarity, developing strong, active listening skills, being able to read other people’s behaviors, effectively managing conflict, navigating difficult conversations successfully, and being empathetic and adaptable.

Communication in the workplace is important because it boosts employee morale, engagement, productivity, and satisfaction. Communication is also vital for better team collaboration and cooperation. Ultimately, effective workplace communication helps drive better results for individuals, teams, and organizations. 

To take it a step further, specifically as a manager, building good communication skills has profound short- and long-term benefits for your organization. Effective communicators can motivate their team to get more done with better results and fewer misunderstandings. And who doesn’t want fewer misunderstandings?

All of these things can contribute to the company’s success — and your success as a leader.

Not all work communication is made equal. We’ve all had the experience of sitting through a tedious, lengthy meeting with the thought, “This should have been an email.” 

Different communication channels are ideal for different types of communication. Depending on the type of information conveyed, those other channels can enhance — or detract — from how it is received. Effective communicators will develop different skills and tools to match the type of communication needed.

1. Leadership communication 

2. Upward communication 

3. Updates 

4. Presentations

5. Meetings 

6. Customer communications 

7. Informal interactions 

Every year communication tops the list of skills in demand by employers. There’s a reason. Communication is what makes our professional and personal relationships go smoothly. It’s how we show care, catalyze change, and get things done. 

That’s reason enough to improve — and keep improving — these critical skills. Luckily, we can all learn to communicate better.

Presentation Skills

Although presentation skills may not be used frequently by most of us, however, there are times when we do need this skill to present information to a group of people, either in a formal or informal setting.

Written Skills

The ability to write and convey effectively is the key to communication. This skill is not just limited to authors or journalists. A poorly written communication can be pretty frustrating for the reader and may also communicate the message inappropriately or incorrectly. Written skills are of great significance in a corporate setup, where communication occurs via email.

Personal Skills

While we may not realize the importance of personal skills such as maintaining a healthy body and mind, they enhance communication. For instance, improving your self-esteem and building your confidence helps you feel more positive about yourself, including your ability to communicate effectively. If you have an in-depth understanding of yourself and a more relaxed and positive outlook toward life, you are more likely to be charming, which further aids the way you communicate. Lastly, good communication skill is also directly linked to assertiveness – standing up for what you truly believe in.

An individual who has the experience of such skills and has worked in this line to help many people to get the benefits from it is our inspiration for today’s article – Linda K Clemons. Linda has studied Marketing and is certified in Analytical Interviewing. Professionally she has achieved the titles of Top Sales Producer, Entrepreneur, Trainer, and Speaker.

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