What are the pros and cons of ETFs?
Pros of ETFs vs. mutual funds or direct stock investing include lower cost management fees, low fixed transaction costs, flexibility, convenience, low taxes, and instant pricing. Nearly every type of investor will find ETFs more compelling than. Most of the material on pros is in the Basics area accessible from the Home page (or most pages) by clicking on Basics. Some of the features which are pros for most investors become cons for certain others. Fixed transaction costs which are low for investors buying large amounts of ETFs become relatively high for investors buying small amounts at a time. Therefore, any investor buying less than $1,000 of ETFs at a time should consider buying a broad market index fund direct to a mutual fund group like Vanguard to avoid brokerage fees. Likewise, flexibility is good for most investors, but novice investors or investors with poor judgment and discipline.
