According to the Wall Street Journal, The New York Stock Exchange is expected to release an educational report today on the risks of investing in exchange traded funds. NYSE wants to address some of the risks associated with investing in ETFs since their growth and popularity continues to increase. The report is "What You Should Know About Exchange Traded Funds".
Risks that the report will address include:
- Expense ratios are low, but there is a commission paid for each trade, which could drive up costs over time;
- Commissions could be a problem for those who want to invest small amounts on a regular basis;
- Some ETFs have a narrow focus, which can make them volatile – if investors chase after performance could rack up on transaction and tax costs.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.