Sun Aug 2 23:43:51 EDT 2009
etrade really could use a decent search engine
So bbot, I've heard of these index funds, and they sound pretty neat, and gosh, I'd like to buy some.
Of course you would, italics man. You are, after all, a reader of this blog, and thus sufficiently erudite and au courant to realize that conventional mutual funds demand outsized fees for undersized return; but also have a job, and therefore don't want to be picking stocks manually. Why not let the Invisible Hand do the work for you?
Exactly. But my question, is, how do I buy shares of an index fund in etrade? They have stock symbols, but searching on those symbols results in all sorts of garbage results.
Yes, etrade's site looks fairly modern, but it is a thinly stretched disguise over 90s era bones. The search engine(s) are particularly, and unfortunately, reminiscent of the bad old search engines of yore, with dumb keyword searches resulting in hojillions of bogus results.
It is, of course, possible to buy index ETFs on etrade; perhaps not the most elegant, nor the most correct, but it worked for me.
The first step is to go to "Investing Products" and select "Fund Research".
Ha ha, really?
No joke. ETFs are, as one might imagine from the name, traded on exchanges, and thus act like regular stocks. But etrade has only contempt for your puny human "metaphors", so ETFs are stuck with the rest of the funds.
Now open the ETF screener and select "Bottom 20%" in expense ratios and "Top 20%" in performance over "10 years".
This, as you may imagine, doesn't actually select index funds, but is just a set of criteria that happens to encompass them. Some of the ETFs it ends up with are (all etrade links require account) DIAMONDS TR UNIT SER 1, (tracking the DJIA) SPDR TR UNIT SER 1, (tracking the S&P 500) and the POWERSHARES QQQ TRUST UNIT SER 1 (tracking the NASDAQ-100, full disclosure, I have 8 shares)
All index ETFs have entertainingly terrible Morningstar ratings and one year performance, since they track stock indexes, and, uh, economic apocalypse; but performance over the next decade (which is how long you should be holding an index fund) should be pretty good.