ETF v. Mutual Fund

If you are asking yourself....should I invest into a Mutual Fund or an ETF? Well good luck! Aside form luck, let me put some information in front of you. The question of what to invest into often arises after a meeting with a financial adviser. Remember, when contemplating a financial investment, think about alternative investments that may achieve better results then what is being presented to you.

If you want an active investor (mutual fund buying and selling securities in an effort to beat the market) managing your money, then you are probably leaning towards a mutual fund; however, if you just want exposure to the market then go with an ETF.

Alright I am an advocate of ETF's and this is why:

1. Lower management fees (management fees for actively invested mutual funds can be higher than 2.0%!, even indexed mutual funds can be quite high); 
2. You can gain exposure through an indexed ETF that should closely mimic the return of the market; 
3. There are numerous studies that a mutual fund can not beat the market indefinitely. Further, passive investing often does better; and,
4. They are actively traded so you can sell your stock at anytime.

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