Today Troy continues with the investing for beginners series. And now he will talk about what are ETF's.
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Low volatility funds are a recent, popular addition to the ETF space. But is a low volatility ETF actually worth it? Or is there a better alternative?
If you are looking for an instant diversification as you work to grow your wealth, a mutual fund (or an ETF) can be a good way to proceed.
Index mutual funds > ETFs
If you’re into index funds, chances are that you know about Vanguard. Indeed, trading Vanguard index funds and ETFs can provide you with a low cost way to invest with the help of dollar cost averaging. However, while you can get access to some amazing index products, there are downsides to Vanguard, including the relative high fees charged for trading.
Since the markets are down 10% since March, it might be a good idea to pick up some shares while you can and rebalance your portfolio (and not do your annual contribution of shares to your ETF Portfolio in March like I did!)
Two of the biggest arguments against mutual funds are high costs and poor performance. When your mutual fund starts under performing and increasing costs, instead of finding another mutual fund money sink, build your own.