PFwise.com Monthly Newsletter
Help you make wise personal finance decisions
Hello friends, welcome to the May 2015 PFwise.com Monthly Newsletter! In this issue, we will focus on only one topic - ETF 101
a. ETFs vs. Index Funds vs. Stocks: which is better?
ETF is a hybrid investment product between funds and stocks. The natural question is: if you compare ETFs with Index Funds or Stocks, which is better? The answer is, each investment product has its own advantages and disadvantages. For details, please see our ETFs vs. Index Funds and ETFs vs. Stocks discussions.
b. What types of ETFs?
With over 2,000 ETFs to choose from, you can use ETFs to accomplish almost any investment goals. Here is an ETF database that lists different types of ETFs. It's a little outdated, but still gives you a good idea about the wide variety of ETFs.
c. How to evaluate and use ETFs?
To evaluate ETFs, you can use the same metrics we use to determine which fund is better. In some related blog posts, we have discussed how to choose ETFs and if you should use ETFs to build your entire investment portfolio.
Finally, some ETF myth busters -
Myth buster 1. An ETF's liquidity is not as important as its underlying stocks.
Myth buster 2. ETFs are less volatile than stocks.
Myth buster 3. ETFs are more tax efficient.
Myth buster 4. Commission-free ETFs are the best.