3 ETF Strategies for Beginning Investorshttp://www.fool.com/investing/etf/2010/09/20/3-etf-strategies-for-beginning-investors.aspx Dan Caplinger
September 20, 2010
Exchange-traded funds have gotten a huge amount of attention from the investing community in recent years. But with all the talk about how short-term strategies using hot ETFs will supposedly make you rich before you know it, you might well think that ETFs are only for sophisticated traders with the know-how to jump in and out of stocks at a moment's notice.
Nothing could be further from the truth. Even beginning investors can use ETFs to build a portfolio that will last a lifetime -- and lately, it's gotten easier than ever to get started.
Keeping your cool
As a long-term investor, though, you don't have to worry about that sort of ETF. Instead, focus on some simple strategies designed to make the most of the simplicity and cost-effectiveness of ETFs.
1. Build an ETF core for free.
Thanks to competition in the ETF industry, though, you can now buy some ETFs without paying any commission at all. Fidelity, Vanguard, and Charles Schwab all have arrangements giving their brokerage customers free access to extensive lines of ETFs that span a wide range of investment types. From the broad-market U.S. stock ETFs Vanguard Total Stock Market (NYSE: VTI ) and iShares S&P 500 to niche investments like iShares MSCI Emerging Markets (NYSE: EEM ) or Schwab International Small-Cap ETF, it's easy to build an asset allocation-based strategy that fits your needs and goals.
2. Invest in your best ideas without losing your shirt.