Pros and Cons of ETFs

Advantages to investing in ETFs:

• ETFs provide exposure to a variety of stocks, bonds, and other assets, typically at a minimal expense.
• ETFs take the guesswork out of stock investing. They allow investors to match the market’s performance over time, which has historically been quite strong.
• ETFs are more liquid (easy to buy and sell) than mutual funds. Online brokers make it easy to buy or sell ETFs with a simple click of the mouse.
• It can be extremely complicated to invest in individual bonds, but a bond ETF can make the fixed-income portion of your portfolio very easy.

Potential drawbacks of ETFs:

• Since ETFs own a diverse assortment of stocks, they don’t have quite as much return potential as buying individual stocks.
• ETFs are often low-cost, but they aren’t free. If you buy a portfolio of individual stocks on your own, you won’t have to pay any management fees.