First, let’s define what ETFs are: Exchange-traded funds and they differ from the traditional actively managed mutual funds. ETFs are basically low cost index mutual funds that can be traded like ordinary stocks on the market. For many investors, both individual and leading financial advisors, ETFs have become an increasing part of their portfolios. ETFs are a $600 Billion market that has grown 26 fold since 1996! Let’s examine some more advantages ETFs have over stocks and bonds:

ETF consistently have much lower expense ratios than actively managed mutual funds. Lower expenses include an array of other financial costs such as commissions which are stated in advance so you won’t be relying on a fund manager buying day in and day out. This is because an ETF runs automatically according to the principles set up when that ETF was created. And so you won’t waste your money on pointless commissions.

An ETF that is linked to a major index like the S&P 500 for example, has consistently outperformed the best hedge funds Wall Street has to offer since their introduction to the financial world in the 1990’s.

ETFs can be bought and sold during the day unlike traditional mutual funds. This gives EFTs a level of liquidity that normal mutual funds cannot offer.

If you are a short intraday trader or a long term investor looking to diversify his portfolio, EFTs offer a great flexibility that opens up a new powerful investment vehicle that can offer your money investments high and safe returns.

Now that you know something about ETFs, you should check out my other hub that has some of my recommendations about investing in ETFs - They have been making an average return of 6% per Month by just spending 5-10 minutes at night! So check out the link below:

                       Click Here for my ETF Recommendations!