ETFs: Index Funds That Trade Like Stocks

Posted 54 days ago | 0 Comments
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In How to Build An Investment Portfolio, I explained the benefits of using index funds instead of the actively managed funds that dominate most portfolios put together by financial advisors. Vanguard and DFA both provide an excellent selection of indexed mutual funds, giving you the ability to implement a variety of portfolio strategies. However, buying into DFA funds is impossible for most investors, with typical $100,000 account minimums and only through approved advisors. So, the obvious solution is to open a Vanguard account, which only requires a $3000 balance. Another option is to use index ETFs, which trade like stocks, in whatever brokerage account you wish. There are hundreds of quality index ETFs available today, including ETF versions of most of Vanguard’s index funds.