Chapter 2
What the Heck Is an ETF, Anyway?
IN THIS CHAPTER
Distinguishing what makes ETFs unique
Appreciating ETFs’ special attributes
Understanding that ETFs aren’t perfect
Taking a look at who is making the most use of ETFs, and how
Asking if ETFs are for you
Banking your retirement on stocks is risky enough; banking your retirement on any individual stock, or even a handful of stocks, is about as risky as wrestling crocodiles. Banking on individual bonds is less risky (maybe wrestling an adolescent crocodile), but the same general principle holds. There is safety in numbers. That’s why teenage boys and girls huddle together in corners at school dances. That’s why gnus graze in groups. That’s why smart stock and bond investors grab onto ETFs.
In this chapter, I explain not only the safety features of ETFs but also the ways in which they differ from their cousins, mutual funds. By the time you’re done with this chapter, you should have a pretty good idea of what ETFs can do for ...
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