Free Ebook.

Enter your email address:

Delivered by FeedBurner

« Move, Save Money, Become a Multiple Millionaire -- All in One Step | Main | Update on My Three CEOs »

September 25, 2006


Feed You can follow this conversation by subscribing to the comment feed for this post.

One thing that I like about ETFs compared to mutual funds is the knowing the price I will be getting.

I like to buy my mututal funds and indexes on down days. With ETFs I can place a limit order to make sure I get in on a down day.

Great Points- I agree that ETFs are loaded with advantages and have very few disadvantages. The bottom line is that they are less expensive and more simple than a traditional mutual fund. The increase in money flow into passive money management demonstrates that point and should continue into the future.

One small correction about the Marotta article. Not all ETFs are based on Market-Cap Indexes. In fact, a few ETF companies are directly opposed to this style of investing. New indexes are created regularly which are unlike the S&P 500 or Dow Jones. Take WisdomTree Investments- the new ETF line based on dividends. They use a rules-based methodology (often referred to as a structured-equity approach) when selecting stocks to fit into their funds. PowerShares does the same thing and is quite popular right now. Because they don't use the market cap system, they tend to favor small cap stocks with low volume in less favorable sectors. This has been a great tactic for the past 5 years or so, but watch out, Dow Jones is about to bust 12,000!

One last point- while the market cap system may not be favorable all the time, it is, technically, how the economy is constructed. Most financial professionals would agree that a market cap index is still the most economically accurate index to follow.

The comments to this entry are closed.

Start a Blog


  • Any information shared on Free Money Finance does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. All posts are © 2005-2012, Free Money Finance.