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Can someone please explain to me the difference between Exchange Traded Funds and Index Funds, which ones are better for investing and why? Thank you in advance and sorry if this is a basic question.
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Re: ETFs vs. Index Funds
You can buy ETF's that are in an Index. An Index is generally a ggodly number of different stocks that spreads out your risk in any area of investment. ETF's are funds that you buy like stocks. They are traded like stocks and you can sell thema s well. I buy indexed ETF's through sharebuilder.com
I hope the site helps! -
Re: ETFs vs. Index Funds
dont you find it hard to make out on sharebuilder with their high commision rates? $32 for every investment(16 buy, 16 sell) just scares me sometimes. Is there some secret about it that Im missing?Comment
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Re: ETFs vs. Index Funds
Sharebuilder is good as long you're a strict buy-and-hold investor ($4 or less per buy). If you're a more active trader, you'll do much better elsewhere, such as Scottrade.Comment
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Re: ETFs vs. Index Funds
Sweepsplayer is spot on. I don't churn my account. For me Sharebuilder is good. Scottrade would be better if I were more actively trading.Comment
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Re: ETFs vs. Index Funds
This is what money magazine says, if you invest an occasional small sum or dollar cost average, an index fund is better. If you are investing a bonus, or windfall an ETF might be better because the trading fees have a smaller impact. If you make systematic withdrawls for retirement, etf brokerage fees will erode your returns.Comment
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Re: ETFs vs. Index Funds
Actually looking harder at sharebuilder. Its a damn good way to invest less than $5000.
Heck, you could use that $25 starter deal to buy into a quality OTC stock that they offer, and sleep on it.Comment
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