ETFs Can Offer Reduced Risk, Less Volatility

 

1. Identify the industry or region of the globe that you want to invest in.

Find a list of ETFs that match your interest and investment style.

2. Obtain a copy of the fund's prospectus, which typically can be found online.

3. Review the prospectus carefully before investing.

4. Lastly, consider the ETFs' investment objectives, risks, charges and expenses prior to making your decision.

Buying an ETF allows you all the benefits of diversification and liquidity without the cost or hassle of following dozens of individual stocks. By quickly and inexpensively buying into an asset class with one transaction, ETFs can be a part of any prudent investor's portfolio.

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Dan Greenshields, CFA, is President and CEO of ShareBuilder Corporation.

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