Guide to Exchange Traded Funds

Exchange traded funds (ETFs) are powerful tools for assembling diversified portfolios. What's more, they are available for use by investors both large and small. This site is geared towards discussing the needs of the individual investor. For those of you familiar with blogs, you'll quickly recognize that this site too is a blog with the exception of this home page which I've set up to act as a guide to particular posts to help beginners.

Before diving in, you'll want to first get a high-level understanding of ETFs. There's also a bit more information about the difference between closed-end funds (CEFs) and ETFs and how ETFs are priced. And then, once you know what ETFs are, take a look at the investing strategy that permeates this site. If this strategy doesn't sit well with you, then you may also not find the rest of the information on this site useful.

With a basic understanding of ETFs, consider looking at these opinion pieces about ETF timing, why active traders fail, and how investment books fail. Although everyone's situation will be different and will require a portfolio with particular characters, you may find some good ideas from ETF portfolios assembled by well-established and successful institutional investors.

With an ideal portfolio in hand, you'll need to examine the list of ETFs available to find the ones that you can plug in to achieve your investment goals. It would also be wise to understand the tax implications of different ETFs.

In terms of maintenance, you should familiarize yourself with the ideas behind dollar cost averaging, getting around the IRS' wash-sale rules and rebalancing your portfolio. And since most people would be advised to maintain some sort of cash-based holdings for emergencies and ETF buying opportunities, there are some specific recommendations for where to stash cash for the short-term.