How to start investing in ETFs

Step 1: Open a brokerage account.

You’ll need a brokerage account before you can buy or sell ETFs. The majority of online brokers now offer commission-free stock and ETF trades, so cost isn’t a major consideration. 

Step 2: Choose your first ETFs.

For beginners, passive index funds are generally the best way to go. Index funds are cheaper than their actively managed counterparts, and the reality is that most actively managed funds don’t beat their benchmark index over time.

Step 3: Let your ETFs do the hard work for you.

It’s important to keep in mind that ETFs are generally designed to be maintenance-free investments.

Newer investors tend to have a bad habit of checking their portfolios far too often, and making emotional, knee-jerk reactions to major market moves. In fact, the average fund investor significantly underperforms the market over time, and over-trading is the main reason. So, once you buy shares of some great ETFs, the best advice is to leave them alone and let them do what they’re intended to do: produce excellent investment growth over long periods of time.