The beauty of an ETF is that investors can easily purchase a single share of a large index without having to get a cash advance on a credit card.
ETFs offer trading flexibility
Stocks and ETFs change hands constantly throughout the standard trading day (9:30 a.m. to 4:00 p.m., Monday through Friday). Buying and selling mutual funds works differently. Though you can place orders to buy and sell funds at any time during the trading day, your orders won’t be fulfilled until shortly after trading ends at 4:00 p.m. each day. The delay that mutual funds impose on trading can be more than an inconvenience — it can also be costly. For example, if the market rises or falls in response to a major news event, such as a shift in interest rates or a spike in the price of oil, you might want to buy or sell your investment immediately, since the price of the investment might change substantially by the end of the day. ETFs let you buy or sell immediately — mutual funds don’t.
How to buy ETFs
You’ll have to open an account at a brokerage company. Click the links below to get further information:
- Scottrade – you can buy Focus Morningstar ETFs commission free!
- Etrade – helps you get started investing in three easy steps
- TradeKing – offers regular trades and broker assisted trades for only $4.95
- tradeMonster – offers mobile trading
- Zecco – has commission free trades available
- ShareBuilder – invest for only $4 on an automatic investment plan