- Cost. The index ETFs I am considering have expenses of about .1-.2%. This is much lower than the 1% for a managed account, and often lower than mutual funds. Even with some ETFs expenses at 0.5% the cost will still average out to be low. I will be able to use commission free ETFs, which will keep down costs as a trickle funds back into the market.
- Diversification. ETFs are easy diversification, allow me to invest in a broad range of stocks through an index or sector. However, ETFs are segmented enough such that I can weight exposure in different areas, such as small cap stocks, REITs, etc. To me, this allows some active involvement over just investing in the S&P500 index.
- Simplicity. Once I choose an ETF allocation, I can manage it by rebalancing periodically, probably on a monthly basis. In volatile markets, I may choose a biweekly timing, but probably not more frequently. I would also start focusing on macro trends and much less on individual companies.
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This is not financial or investing advice. Please consult a professional advisor.
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