ETFs Made Easy

In addition, I wanted to introduce ETFs that represent the credit markets, income-oriented ETFs whose portfolios consist of income instruments, and ETFs that reflect major market indices such as the S&P 500, mid-cap market sectors, small-cap growth and value market sectors, balanced portfolios, and even international markets.

I wrote this book to show do-it-yourself investors how to create diverse and balanced portfolios that you can expect to outperform the average mutual fund with similar investment objectives, at lower risk.

Along with comparisons of the historical performance of various market segments such as the small capitalization arena compared to the large capitalization arena, growth vs. value-oriented securities, and income securities vs. more speculative investment holdings, this book provides specific portfolio strategies and structures that reduce risk while increasing return -- a constant theme throughout Investing with Exchange-Traded Funds Made Easy. Furthermore, you will learn when and how to rebalance and alter portfolios to maintain outstanding performance.

Exchange-traded funds can provide definite tax advantages compared to mutual funds. In particular, mutual funds have to pass along taxable capital gain distributions to shareholders because of their own trading and profit-taking. Such distributions create tax bills to mutual fund investors even when those investors do not sell their mutual fund shares.

ETFs overall are more tax-efficient than most regular mutual funds, meaning that long-term investors in ETFs are likely (but not guaranteed) to receive a relatively low level of taxable distributions compared to investors in open-end mutual funds with similar investment objectives.

It was my goal in writing this book that a reader, even one with only enough investment background to place trades in a brokerage account, would learn to apply rational, research-based strategies to the management of his or her investments.

The approach of looking for the best balance between risk and reward, and of keeping your assets only in the most attractive areas of the market, should help set the reader on a course toward long-term financial security.