This is a guest post from Troy who is starting an investing for beginners series and now his first series what are stocks and how to value them.
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If you are looking for an instant diversification as you work to grow your wealth, a mutual fund (or an ETF) can be a good way to proceed.
Index mutual funds > ETFs
If you’re into index funds, chances are that you know about Vanguard. Indeed, trading Vanguard index funds and ETFs can provide you with a low cost way to invest with the help of dollar cost averaging. However, while you can get access to some amazing index products, there are downsides to Vanguard, including the relative high fees charged for trading.
Since the markets are down 10% since March, it might be a good idea to pick up some shares while you can and rebalance your portfolio (and not do your annual contribution of shares to your ETF Portfolio in March like I did!)
Two of the biggest arguments against mutual funds are high costs and poor performance. When your mutual fund starts under performing and increasing costs, instead of finding another mutual fund money sink, build your own.
One of the newer brokerages receiving a great deal of notice right now is Betterment. Betterment is relatively new; it created quite a stir at Finnovate 2010 by winning “Best of Show”. Since then, financial bloggers and other have been writing about the service, and many have tried it out.
o why spend dozens of hours of my life putting together an eBook on ETF investing – and then give it away? Purely out of the goodness of my heart of course :) No, in all seriousness, a large part of the motivation to do this eBook was the fact that I want to offer great value to the readers of My University Money and keep them coming back for more.