Jim Woods

ETFs and the Music of the Markets, Part I

What do exchange-traded funds (ETFs), music and the markets have in common? Well, aside from the fact that I happen to love them all, ETFs, music and the markets have a lot in common.

Here’s a little analogy to help illustrate my point.

Remember the 2004 biopic “Ray” starring Jamie Foxx in the lead role as Ray Charles? I suspect you may have seen it and, if you haven’t, I highly recommend it. Foxx won an Academy Award for his portrayal of the great singer, songwriter and pianist, and the film was a no-holds-barred look at Charles’ life.

In preparing for the film, Ray Charles sat down with Jamie Foxx, who also is a classically trained pianist, to play the piano together and exchange musical vibes.

Here’s how Foxx described the encounter in an interview with best-selling author and podcaster Tim Ferriss.

“As we’re playing, I’m on cloud nine. Then he [Ray Charles] moves into some intricate stuff, like Thelonious Monk. I was like, ‘Oh Sh*t, I gotta catch up’ and I hit a wrong note. He stopped because his ears are very sensitive: ‘Now, why the hell would you do that? Why you hit a note like that? That’s the wrong note, man.’ I said, ‘I’m sorry Mr. Charles,’ and he said, ‘Let me tell you something, brother. The notes are right underneath your fingers, baby. You just gotta take the time out to play the right notes. That’s life.’”

Wow, that is life indeed.

When applied to investing, we can say that the music of the market also dictates that we “take the time out to play the right notes.”

You see, the proliferation of ETFs over the years also has put the “right notes” underneath our fingers. In fact, today we can literally get portfolio exposure to just about any segment of the market by tapping on the computer keyboard that’s right underneath our fingers.

And while doing this right may be easier said than done, it can and is being done by all sorts of investors, worldwide.

Of course, the key to becoming a good musician, and to knowing the right notes to play, takes a whole lot of deliberate practice, knowledge and cultivated skill. It is the same way with investing.

Click here to read the full article, “ETFs and the Music of the Markets, Part I.”


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