Topic: How To Invest

What is Pat’s commentary for the week of October 8, 2019

Article Excerpt

The ETF, or exchange traded fund, is the biggest advance for individual investors since the introduction of discount brokers. Both help you cut costs. But both these developments expose you to risk as well. When you deal with a discount broker, you pay a lot less to act on your investment transactions than you would when dealing with a standard broker. But discount brokers may let you make mistakes that a standard broker might recognize and talk you out of. If you want to make a particular type of investment, ETFs may give you a much cheaper way to do so than conventional mutual funds. Here too, however, ETFs offer many opportunities to make truly hare-brained investments. ETFs started out as what you might think of as plain-vanilla, discount versions of mutual funds. Instead of actively buying and selling stock in the ETF’s portfolio, in an attempt to maximize profit, the ETF manager simply runs the fund so as to mirror the performance…

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