Rite Aid Corporation, a US$416m company, has been filed for Chapter 11 bankruptcy in New Jersey, with insiders collectively owning US$11m worth of the company. Rite Aid’s shares were split on a 1:20 basis on 21 April 2019, and the company will now operate as a private company. The company has no institutional owners and shareholders that have filed 13D/G or 13F forms with the Securities Exchange Commission (SEC). ETFs positioned on Rite Aid Corporation include Adaptive RH Tactical Outlook ETF – USD, Adaptive RH Tactical Outlook ETF – USD. 0.00, 9 M€, and Sector Rotation ETF – USD. 0.00, 9 M€. Rite Aid Corp. Mutual funds and exchange-traded funds (ETFs) are popular ways for investors to diversify, but they have key differences. Understanding how ETFs and mutual funds are similar and where they differ can help you choose the right investment vehicle for your portfolio. An exchange-traded fund is an investment vehicle that pools a group of securities into a fund, which can be traded like an individual stock on an exchange. American investors often turn to mutual funds and ETFs to save for retirement and other financial goals.
📹 Index Funds vs ETFs vs Mutual Funds – What’s the Difference & Which One You Should Choose?
In this video I discuss the differences between Index Funds vs ETFs vs Mutual Funds and give you my opinion on what’s the best …
What is the difference between ETF and mutual fund?
Exchange-traded funds (ETFs) and mutual funds are popular investment vehicles in India, offering investors exposure to a diversified portfolio of securities. ETFs are passively managed, mirroring an index, making them less risky and transparent. Mutual funds are actively managed, investing based on market analysis and outlook. Both ETFs and mutual funds provide low-cost investment options, offering diversification and professional management. However, ETFs trade on an exchange-like stock market, while mutual funds are bought and sold through a fund house at the end of the trading day at the Net Asset Value (NAV).
Who is buying Rite Aid?
Rite Aid, a pharmacy chain, has faced several merger attempts in recent years. In 2015, Walgreens Boots Alliance planned to buy Rite Aid for $17. 2 billion, but abandoned the deal in 2017 due to antitrust concerns. In 2018, Albertsons and Rite Aid announced a $24 billion merger, but both were scrapped. In 2022, Rite Aid partnered with Google Cloud for a multiyear technology partnership to enhance its digital and data capabilities. The company also revamped its brand to compete with CVS Health and Walgreens.
Why is Rite Aid losing money?
Rite Aid is facing financial difficulties due to factors beyond its control, including record inflation, lower insurer payments, higher labor costs, lower demand for COVID vaccines and retail merchandise, higher theft, and the loss of key corporate clients. The chain has long-term leases for no-profit stores, including $80 million a year for closed stores. Rite Aid is relying on bankruptcy to exit these deals. Rumors of bankruptcy have also surfaced after hiring restructuring advisers in late 2022, and suppliers have demanded cash payments upfront instead of waiting for the company to sell their goods.
Why did Rite Aid fail?
Rite Aid, a leading pharmacy chain, has experienced a decline in its market share due to rising healthcare costs and stagnant revenue. The company’s debt has accumulated nearly $3 billion in net losses since 2018, limiting its ability to invest in store renovations. The rise of online threats from Amazon and in-store pharmacies at major chains like Walmart and Kroger further undermined Rite Aid’s competitiveness.
Fitch Ratings analyst David Silverman explains that the company’s limited ability to invest in improvements led to its continued decline. However, the pandemic provided Rite Aid with a temporary boost in business through COVID vaccine sales, which in turn boosted sales of other items.
Which mutual funds outperform the S&P 500?
FCNTX, a fund that adheres to a contrarian investment strategy, has undergone a transition to a growth investing strategy over the past decade. This shift has resulted in superior performance relative to its benchmark, the S&P 500, with an annualized total return of 14. 9%.
Why is ETF not a good investment?
The primary concern in exchange-traded funds (ETFs) is market risk, as they are merely an investment vehicle and not a wrapper for their underlying investments. In the event of a 50-point decline in the S&P 500, the cost, tax efficiency, or transparency of the ETF will be of no assistance.
What is the Rite Aid scandal?
Rite Aid, founded in 1962 as Thrift D Discount Center, faced an accounting scandal in 1999 when it began restating earnings due to accounting irregularities. Six former Rite Aid senior executives were convicted of conspiracy in 2003 for accounting fraud and false filings with the SEC. The company changed its name to Rite Aid Corporation in 1968 and moved its stock to the New York Stock Exchange in 1970.
Rite Aid’s growth was marked by acquisitions like Envision Pharmaceutical Services in 2015 and two merger deals with Walgreens and Albertsons. Former Rite Aid executives admitted to overstating net income between 1997 and 2000.
What are the 4 types of mutual funds?
Mutual funds are categorized into four main groups: bond funds, money market funds, target date funds, and stock funds. Each category has unique characteristics, risks, and potential returns. Mutual fund types include equity funds, debt funds, hybrid funds, money market funds, index funds, sectoral or thematic funds, tax-saving funds, liquid funds, gilt funds, international funds, growth funds, income funds, tax-saving funds, aggressive growth funds, capital protection funds, fixed maturity funds, and pension funds. Investors can choose a mutual fund scheme based on their risk tolerance, investable amount, financial objectives, and investment horizon.
Which is an advantage exchange traded funds (ETFs) have over mutual funds?
Exchange-traded funds (ETFs) are listed on stock exchanges and offer a combination of the characteristics of mutual funds and stocks. They track specific market indexes, sectors, commodities, or other asset classes, thereby exposing investors to a range of securities in a single investment. The benefits of ETFs include greater liquidity, lower expenses, diversification, and tax advantages.
Who owns the most stock in Rite Aid?
The majority of shares in Rite Aid (RADCQ) are held by Vanguard Index Funds.
Is it better to hold mutual funds or ETFs?
Mutual funds and exchange-traded funds (ETF) offer instant diversification and low costs for investment portfolios. Mutual funds remain the top choice due to their prominence in retirement plans like 401(k)s, with U. S. mutual funds having around $22. 1 trillion in net assets at the end of 2022, compared to $6. 5 trillion in ETFs. ETFs have gained popularity due to their low fees and ease of trading.
Both types of funds allow investors to invest in a diversified portfolio by buying just one security, such as an index fund based on the S&P 500 or a portfolio of bonds. Some funds allow investors to buy gold or all companies in a certain industry. However, ETFs hold an edge due to their frequent passive investing and tax advantages.
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ETFs offer exposure to a wide range of assets, such as stocks, bonds, or commodities, which can help reduce risk. ETFs, like broad market index, sector-specific, and bond ETFs, are favored for long-term investments because of their diversification, reducing risk while offering growth and income potential.
I have added a variety of stocks and ETF to my present holdings for the long term. I also have $300k aside to start following inflation-indexed bonds and stocks of companies with solid cash flow. I strongly believe this is a good time to capitalize on the market for long term gains. But actualizing a short term profit would not be a bad idea for me at all.
Investing in mutual funds offers a structured and diversified approach to building wealth, managed by professional fund managers. While there are costs and some limitations, the benefits of diversification, professional management, and ease of access make mutual funds a popular choice for achieving a variety of financial goals.
Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $560K for sometime now, my major challenge is not knowing the best entry and exit strategie;s … I would greatly appreciate any suggestions.
Amazing article, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family
Amazing article, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
I did the lump sum buy at first, 125k into SCHD, 75k TSLA, 25k VYM, 25K VUG. Now I’m dca buying roughly 2k every week of whatever is on sale, and looking to add more tech positions to my portfolio. I’m looking to hold long term 15 – 20 years, so hopefully my lump sum buy in doesn’t bite me in the ass long term.
What truly distinguishes Michael Hugh Terpin is his unwavering dedication to continuous learning and innovation. He is constantly honing his skills, staying abreast of the latest trends, and adapting his strategies to evolving market conditions. His nimbleness and agility in responding to changes ensure that he remains ahead of the curve, consistently delivering outstanding results.
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that’s what everyone said. I’m still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I’m really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Brooke Miller.
This article was super informative! Seeing you on TikTok and following other financial/business professional accounts, I am beginning to build my way to “financial freedom”. Thank you for clarifying the Index fund and mutual fund. I almost considered putting my money into a mutual fund, but after learning how high fees could be, I’m just going to opt for an index fund.
After a terrible 2022, shell-shocked financial backers have a lot to think about and losses to recover from. An expansion report and a wealth of other data did little to alter assumptions that the Central bank would likely keep raising interest rates regardless of whether the economy slows down. This implies that portfolios will experience more losses during the first quarter of 2023. I’m currently at a crossroads deciding whether to exchange my $250k security/stock portfolio; how might the continuous market volatility work to my advantage?
Amazing article, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Great article, fantastic job explaining the similarities and differences between these investment options, and I found it very informative. I noticed one crucial aspect missing, and that is tax liabilities associated with these investment vehicles. I believe including information about tax implications would greatly benefit your viewers. If I remember correctly, one of the key attractions to ETFs, is the tax advantage they offer. Investors in ETFs typically do not have to pay taxes on capital gains until they sell their shares, allowing for tax deferral and potential tax savings. On the other hand, investors in mutual funds may be required to pay taxes annually on capital gains, which can impact their overall returns. Let me know if I got it wrong.
Great article. I’m a late arrival to investing for retirement. I’ve only had a Roth IRA for about a year now and have about 3k in it. The majority of my assets are mutual funds. Luckily all my expense ratio’s are pretty small ranging from 0.04 to 0.65. With that being said, I think I’m gonna pivot to ETF’s just to be safe. If things go according to plan, I still have between 20 – 25 years left before retirement so hopefully I can build up a nice nest egg. Anyways, thanks for all the valuable tips!
I bought $3000 worth of VT over the past 3 weeks. After realizing how much a deadweight the international stocks in that ETF is, I decided to sell my shares and buy the VTI ETF or VSTAX mutual fund equivalent. I’m now deciding between getting the ETF or mutual fund. The expense ratio is only 0.1 % more with the mutual fund vs the ETF. I was drawn to the mutual fund mostly for psychological reasons; to reduce how often I look at my portfolio and to not make any rash selling decisions.
so.. if buying a share of the second type of fund (the index fund) .. what are you actually buying? if it simply ‘aims to track an index’ .. it seems like you’re not really buying stocks. is this correct? this is the one that is confusing me. i understand mutual funds. and i pretty much understand etf
This is very educational, Humphrey. You are doing a great service. A small criticism about accuracy. Index funds are not a separate category unto themselves. There are mutual funds that are index funds and there are ETFs that are index funds. Textbook definition: An index fund is an investment fund – either a mutual fund or an exchange-traded fund (ETF) – that is based on a preset basket of stocks, or index.
Very clear and helpful : thanks! Didn’t realise mutual funds had such high fees! BTW does each country have different index funds and are they limited to just one country’s stocks? Or are there more global’ index funds that track multiple countries’ stocks or index funds just for emerging markets etc etc ?
Changing times. I got out of my mutual funds due to emergencies 10 years ago and they were great. I even know the two packages i had at that time and i could use them again today.. Now I am looking into investments and am hearing mutual funds is not the norm and index is favorable. Who do you recomend going to for index and what kind of stories can I hear about them … both good and bad?
Hey Humphrey, Great articles! Please allow me a stupid question but I feel like I might be missing something obvious. You said that Mutual Funds are horrible and should be avoided. But, what’s wrong with funds such as FSELX, FSMEX or FBGRX, for example? Over the past 10 years, they have done 25%, 22% and 21% respectively which is significant more than the SP500, if I’m reading this correctly. The cost for each is 0.7%, so if you subtract that from the return it would still be pretty high. P.S: Over the lifetime of the fund the Returns are lower than that but still above 13%.. Thanks!
I’ve a grand invested in the SP500 ETF cause I thought etf’s and index funds were the same thing? What would u recommend me to do? Is it possible to move this money into an index fund? Should I just leave it there and start investing in an index fund from now on? Does it make more sense to just continue investing in this ETF? The dividend reinvestment thing sounds really good. I would really appreciate a tip here cause I’m very confused. Thanks buddy
Hello Mr Yang, I was perusal your articles and as an 18 year old you have sparked an interest in me to learn more about finance and the stock market. I noticed that most of your articles show how you can safely make a lot of money over a very long period of time. For example, investing $1000 and hoping What if someone wants to invest massive amounts of money? Like, say, someone wants to invest 40 thousand. Would you also recommend they invest in an index fund or should they be looking at things like real estate?
An issue you neglected to cover when comparing ETFs and Index funds is that ETFs do NOT necessarily trade at their Net Asset Value, whereas Index Funds are, usually, sold at exactly their NAV. This means that in theory it is possible to buy undervalued ETFs and wait for a market correction, however, it is exceptionally rare for the ETF brokerages to actually allow small owners to exchange their ETFs for the underlying stocks, which creates an air of doubt as to what actual value ETFs have, given that they are effectively FIAT unless you own a substantial enough portion of the total ETF to have the right to exchange your shares in the ETF for the shares in the proverbial “Candy Jar”.
I’m a Canadian so unfortunately, it’s difficult for me to create a Vanguard account. I’m using Wealthsimple and the closest equivalent I can find to VTSAX is a stock called VFV (Vanguard S&P 500 Index ETF) – the name confuses me. Do you know if this is a good stock to invest in? Basically, I am wanting to invest in VTSAX but since I can’t find that on Wealthsimple I’m wondering what the closest equivalent is. Thank you for the very helpful article!
Hey Humphrey, I love your content! You seem passionate about teaching personal finance. Have you considered advertising your website on YouTube to grow your website? It seems worth considering because this is an investment of your time, and you want to grow your audience. In any case, I’ll try to give you good word of mouth, because I like what you do and how you make finance easy to understand.
I watched the whole article to hopefully answer this one question I had but still did not get my question answered. What is the exact advantage of a index fund over a ETF. I know the differences are very minor but why do you suggest index fund over ETF for long term? At the end of the article you said you would “just do an index fund if you can come up with the minimum” why?
Thanks so much! I have one question: if I only have $3500 in my roth IRA account this year, do you suggest that I invest $3500 on an Index Fund (VTSAX) and then buy the rest of the 3-fund portfolio in the following years. OR, should I divide up the $3500 to buy ETFs. I am planning to keep investing into my roth IRA each year.
With the fluctuations of ETFs being traded on the market is there a bad time to jump into a fund. There is speculation that funds like ARK are going to stop making above average gains and at that point investors will sell. This leaves another aspect of the fund to be in question. If the investors leave when is the right to sell?
hey i just opend up a vanguard account and a schwab account i will be parking my money in the vanguard vusxx mmf untill i start buying some index funds or etfs. I am ready to buy but every stock or fund i look at seems it is at an all time high. do u suggest buying in these times or waiting it out? or maybe things might not go back down and i should just buy now and buy when it dips and dollar cost average?
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly—which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I’m still at a crossroads deciding if to liquidate my $125k bond/stocck portfolio
ETFs offers exposure to a wide range of assets such as stocks, bonds and commodities, which can help reduce risk. ETFs, like broad market index, secror-specif and bond ETFs are favoured for long-term investment, because of their diversification, reducing risk while offering growth and income potential.
I have a 3 fund portfolio consisting of 30% S&P, 30% total stock, and 30% international. But I feel a need to focus on complete growth so I went 100% stock. But does the SP500 and TSM ocerlap too much to make sense holding both? However I have been in the red for months now, I work hard for my money so investing is makes me nervous. I don’t know if I should sell everything, sit and just wait, but perusal my portfolio shrink is a constant source of stress.
Fidelity mutual funds (FXAIX, FSKAX, FTIHX, etc.) have expense ratios (fees) of .015% and .06% for international fund. extremely low fees, even lower than the .03% of Vanguards ETF fees. So i’m not sure where the bashing of mutual funds is warranted? Information is power and that info in this article is incorrect..