A mental slap to the face
So I'm still diligently searching for good, solif ETFs to supplement the stocks that I own. I've subscribed to several newsletters regarding ETFs, and visit other websites in my research. I came across a post about 101 ETF lessons every financial advisor should know, and eagerly began reading. One of the lessons is that Preferred Stock ETFs can have juicy yields. Salivating, I quickly started to research some of them.
What I found was a bit of a shock. One of the ETFs mentioned has a portfolio turnover of 67% - this alone was enough for me to stop considering this particular ETF (PSK). As I did more research, I realized this is actually tagged as a Long Term bond by Morningstar, they have standardized returns of 2.61% over 3 years, but -4.64% over the previous year.
Again, even though we might get information from one place, it's often good for us to double and triple check (Rodgers! ETF DOUBLE CHECK!) before sinking our money into a fund.
I have my own investment plan: I know where I want to be in 12 years, and I'm willing to be a bit aggressive - as long as I'm moving forward. A bond ETF would be like travelling 35mph, in a 75mph zone. Any turnover rate over 25% should be considered suspect - 67% and I'm thinking whoever's in charge of this ETF is scrambling to play catch-up.
Most of my research is independent, I don't have Excel spreadsheets with dozens of stock picks, and a good portion of my research is done when the kids aren't using the computer (5:30am, or right after my son's bedtime at 8pm). But while I'm learning, having multiple resources to verify holdings and financials, and focusing on key numbers, I feel that I'm still doing about as good as anyone.
I might not be a financial advisor, but right now, I'm just SLIGHTY less well dressed than they may be!