Kevin Michels

CFP®
Personal Finance, Retirement, Investing
97%
Helpful
117
Answers
19
Articles
110
Followers
“Kevin Michels, Financial Planner with Medicus Wealth Planning, ensures that his clients are always invested correctly, have an updated and accurate financial plan, and are on track to enjoy their desired lifestyle in retirement.”
Firm:

Medicus Wealth Planning

Job Title:

Financial Planner

Biography:

Kevin enjoys helping clients from all stages in life with sound financial planning. Kevin has especially found a niche in advising small business owners who’d like to create or improve upon their existing company retirement plan.

Kevin got his start in the financial planning industry by going to work for one of the largest discount brokerage and mutual fund companies in the world, Fidelity Investments. While at Fidelity, Kevin held his Series 7 and 63 Licenses which allowed him to work as a trader, completing transactions in stocks, mutual funds, and options.  After being promoted to a department that focused on helping clients with their company retirement plans, Kevin found what he had a passion for, helping small business owners and their employees successfully prepare for retirement.

Kevin left Fidelity to come work with David Luke as a partner in Medicus Wealth Planning. Having the opportunity to work with clients on a fee-only basis allows Kevin to give objective and sound financial planning advice that is never tainted by a hidden agenda.

Kevin graduated from Utah Valley University with a degree in Personal Financial Planning. Utah Valley University’s Financial Planning Program has been recognized on numerous occasions as a top 10 Financial Planning Program in the country.

Shortly after graduating with a degree in Personal Financial Planning, Kevin became a Certified Financial Planner™ (CFP®).

Kevin lives in Riverton, Utah with his wife Lauren, and their two children. Kevin spends much of his free time with his family outdoors, playing sports, and watching Jazz games. Kevin and Lauren enjoy living close to both of their families and spending time with them.

Education:

Personal Financial Planning, Utah Valley University

Assets Under Management:

$35 million

Fee Structure:

Fee-Only

CRD Number:

6185260

All Articles
Sort By:
Most Helpful
February 2017
    Charity, Income Tax, IRAs
February 2017
    401(k), Mutual Funds, Retirement Savings
June 2017
    Retirement Living, Retirement Plans, Retirement Savings
April 2017
2 weeks ago
    Real Estate

All Answers
Sort By:
Most Helpful
    ETFs, Mutual Funds
What are the pros and cons of mutual funds and mutual fund ETFs?
100% of people found this answer helpful

Let's first talk about how mutual funds and ETFs are the same and how they are different, and then we can get into the pros and cons of each.  

The idea behind both mutual funds and ETFs are that they provide instant diversification regardless of how much money you have to invest. When you invest in a mutual fund or ETF, you are investing in a basket of stocks and/or bonds that represent a certain market such as large US companies, small US companies, international companies, etc. There are mutual funds and ETFs that cover basically every type of market you could think of.

The two biggest differences between mutual funds and ETFs are how they are traded, valued, and what their investment philosophy is. Mutual funds are traded only one time per day at market close. At the end of market close the mutual fund takes all the sell and buy orders that were placed and they calculate the NAV (net asset value) which is essentially the price or value per one share of the mutual fund. This is calculated by simply taking all the assets of the fund (securities held) and dividing it by the number of shares outstanding. ETFs are traded throughout the day, just like stocks, and the price you pay for an ETF could and most likely will be different than the NAV of the ETV. This price of the ETF like a stock is determined by demand and the future outlook of the securities the ETF owns. You can buy and sell an ETF at any time while the market is open.

Although its important to understand how mutual funds and ETFs are valued and traded, it is more important to understand the investment philosophy each vehicle represents.

Generally, mutual funds are actively-managed investments (but not in all cases). Actively-managed investments mean you pay a premium to have a mutual fund manager actively picking the stocks and/or bonds in your mutual fund.  heir objective is to outperform a certain benchmark. For example, an actively managed mutual fund that invests in large US companies would most likely benchmark themselves against the S&P 500. The objective of this mutual fund would be to try and outperform the S&P 500 for any given time period. The managers do this by employing fundamental analysis and other techniques.

Generally, ETFs are passively-managed investments. Instead of trying to outperform a benchmark, an ETF simply tries to mirror the return of the benchmark. They do this by simply holding the exact same securities that their underlying benchmark holds. An ETF that represents large US companies would simply hold all 500 stocks of the S&P 500. Since there is no need for a manager to pick and choose the stocks, the expense to invest in an ETF is very low compared to mutual funds.

Now to the pros and cons:

The pros and cons of each investment are very subjective and mostly depend on your take of the stock market. If you believe that the stock market is inefficient and that a mutual fund manager can consistently outperform its benchmark then you'd invest in actively managed mutual funds. If you believe the market is efficient then you would invest in low cost ETFs.

In addition to the investment philosophies, mutual funds are generally less tax-efficient than ETFs. Since managers are actively trying to find the best stock picks, mutual funds usually have higher turnover and, therefore, more capital gains. Since ETFs simply hold the same stocks that are represented in the benchmark, there is less turnover and less capital gains generated.

Mutual Fund Pros

- The chance to outperform the stock market

Mutual Fund Cons

- Expense to invest is generally higher

- Shares only trade once a day

- Less tax-efficient

ETF Pros

- Expense to invest is generally lower

- Your return will match the ETFs benchmark return (could be considered a con)

- Shares trade throughout the day

- More tax-efficient

ETF Cons

- No chance of outperforming the respective benchmark

February 2017
    Stocks
I want to invest in equities, but I don't have much money. Is there a minimum number of shares I must buy?
100% of people found this answer helpful
February 2017
    Taxes
Will my retired father have to pay taxes on funds he received from a life insurance policy inside a brokerage account?
100% of people found this answer helpful
February 2017
    Taxes, End of Life
How can we become more financially comfortable towards the end of our life?
100% of people found this answer helpful
February 2017
    IRAs, Income Tax
Is it too late to withdraw from my IRA for the 2016 tax year?
100% of people found this answer helpful
February 2017