In this week’s video, Tom discusses why exchange traded funds are NOT just for beginners. He highlights their tax efficiency, diversification and low costs as reasons why exchange traded funds should be considered by all investors.
The Walton family trust, one of the wealthiest families in the nation, disclosed their holdings recently, and guess what? Their Top 10 holdings are all exchange traded funds.
Show Notes
Travis Gatzemeier Walton Family Trust Tweet
Exchange Traded Funds Are NOT JUST for Beginners – Full Transcript
**Click here for a downloadable PDF version of this transcript**
Tom Mullooly: In episode 267, we find out what’s being invested up on Walton Mountain, stick around.
Tom Mullooly: Welcome to the Mullooly Asset Show, I’m your host, Tom Mullooly. And this is episode number 267. Thanks for tuning in.
Tom Mullooly: So, what’s going on on Walton Mountain? If you watched that TV show in the ’70s, know that I am not referring to John Boy or Jim Bob. The Walton family recently disclosed their investment holdings through a 13F filing. Now, these are the descendants of Sam Walton from Walmart. I think you’re going to be very interested to hear where they’re investing their money. Very, very interesting. The top 10 positions, the top 10 positions, all of them, exchange traded funds. And we’re not just talking about a couple of bucks here. Their top 10 positions added up to more than $5 billion. So, it’s a lot of money.
Tom Mullooly: A couple of takeaways that I get from this, and I want to put a hat tip out there to our friends on Twitter for pointing this out to us. The first takeaway is that exchange traded funds are not just for beginners.
You need to understand that when you invest into an exchange traded fund, you’re getting instant diversification at a very, very low cost, and something that is extremely tax efficient.
The other thing that I’ll add, on top of that, is that exchange traded funds have made the playing field level for all investors. So, it doesn’t matter if you’re a big family investor, like the Waltons, or if you’re a first time investor, it’s a level playing field now, you can get the same kind of exposure.
Tom Mullooly: So, the second takeaway that I get from this filing from the Waltons is that they’re focused on the long term, and you should be too. And they’re also focused on low cost investments, and you should be too.
They’re not trying to beat the markets. And there’s a hidden message in that when you try to beat the market, say, you’re buying individual stocks, or you’re just trying to bet it all on one big bet on a particular stock, you’re going to wind up with an insanely higher amount of risk in your account by trying to do that.
There’s going to be some point in time where you will fall behind the market averages. So, very important takeaway with that.
Tom Mullooly: The third takeaway that I took from this disclosure from the Walton family is that building wealth requires a different strategy than maintaining wealth. You could be super aggressive while you’re trying to build your wealth.
And then, you retire and you continue to be aggressive, that may not be in your best interest. And I think that’s why it’s important to sit down with a planner, an advisor who’s going to help you do that transition from the building wealth period to the maintaining wealth period. They’re completely different strategies.
Tom Mullooly: So, very important message from Walton Mountain. I say Walton Mountain kidding, because that was the TV show, but the Walmart family is now the Walton Family Trust and they now, have to disclose what their investments are.
I think a lot of folks in our community had their eyes open when they saw how the top 10 positions all in exchange traded funds. The ETF world is not going away, certainly worth a look for everyone out there.
Tom Mullooly: That’s the message for episode 267. Thanks again for tuning in,