Everyone has to start somewhere – even exchange traded fund (ETF) investors. What do you do when you’re starting especially small?
If you are looking to dabble in the market, or just starting out on your investment path, there are investment options that do not require much of an initial deposit. Many low-expense mutual funds have minimum deposit requirements of $2,500 or more, not exactly chump change for some.
Scott Burns for Dallas News suggests opening a brokerage account and investing in ETFs. Many ETFs have low expense ratios, such as the Vanguard Total Stock Market (VTI) at 0.25%, along with superior diversification benefits. Even combined with commission fees, you are way under the load fees of many mutual funds. The longer you hold your position, the more the fee is spread out, yielding great cost efficiency.
Whether you’re starting out large or small, ETFs have benefits for investors of all types. Visit our education page to learn about their benefits, how to choose one, how to cut down costs and how short and leveraged funds work.
ETFs can also be easily combined with a trend-following strategy. Learn how to put one to use here.
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.