Postage Increase 2008, Actively Managed ETFs, and Dow Reshuffle

forever stampDid you stock up Forever Stamps when they became available last May? If you did, good for you because it doesn’t much longer for the postage to go up again. Beginning May 12th, the rate for a one-ounce first class mail will go up one cent, from 41 cents to 42 cents, according to U.S. Postal Service. The price for the Forever Stamp will also increase to 42 cents. What will happen in 2009? May be another 1 cent increase.

Should have bought those stamps :D But it’s not too late.

So far, all exchange-traded funds (ETFs) take the passive investment approach, i.e., all funds track their respective indices and no active managements are required. That’s one of the reason why ETFs are generally cheaper than mutual funds because fund managers don’t need to select which stocks to invest.

That will soon change.

Smart Money had an article last week, reporting actively managed ETFs from Bear Sterns, Barclays, PowerShares and Vanguard are close to get SEC approval and will be available to investors soon. The proposed offerings include both equities and bonds.

Sure, the age-long debate between passive and active investing in mutual funds is going to get into the ETF business. Will you buy active ETFs?

dow jonesBank of America (BAC) and Chevron (CVX) in, Altria (MO) and Honeywell (HON) out.

Dow Jones announced today that starting February 19th, BAC and CVX will replace MO and HON as components of the Dow Jones Industrial Average Index. The change is the first since April 2004 when the index dropped Eastman Kodak (EK), International Paper (IP), and Goodyear (GT), and added Verizon (VZ), Pfizer (PFE), and Home Depot (HD). The change reflects the shrinking share of the industrial sector in the overall economy, thus in the “Industrial Average Index” :)

The change, however, is unlikely to dramatically affect the share price of the stocks involved because there aren’t many investment portfolios track The Dow. At the end of today’s trading, BAC lost 2 cents to close at $42.05 a share and CVX gained $0.16 to $80.59.

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5 Responses to “Postage Increase 2008, Actively Managed ETFs, and Dow Reshuffle”

  1. Neo |  Feb 12, 2008 at 12:28 am

    Regarding the forever stamp, I would like to direct you to this site where the author does some math based on the 1975 cost per stamp. The author comes to the conclusion that you’re better off sticking your money in a high yield savings account, rather than stocking up on forever stamps. I also recall reading an article where the author went back approximately 100 years, and adjusted for inflation stamp prices have actually gone down.

  2. Neo |  Feb 12, 2008 at 12:30 am

    Whoops, I forgot to close the tag. :-/

  3. Jesse |  Feb 12, 2008 at 12:44 pm

    Well also, here is my article on aside from the actual numbers there are a lot of other reasons not to buy a bunch of forever stamps…

  4. mh1 |  Feb 15, 2008 at 7:34 pm

    CVX = Chevron, not Chevorn (first line).

  5. Sun |  Feb 16, 2008 at 11:24 pm

    mh1: Thanks for the correction :)

    Neo & Jesse: Thanks for sharing. I am sure there’s one point at which buying a ton of forever stamps makes financial sense, assuming a inflation rate, an interest rate and the number of stamps will be used every year. However, I feel people are using less and less stamps now since many, if not all, bills can be paid online.