There are ground rules for every investor, but some are easier to follow than others. Exchange traded funds (ETFs) can help you build a nest egg and cut down on the stress.

When it comes to investing, it seems like just about everyone has a rule of thumb and advice to give. The most common ones include starting a nest egg early on in life, utilizing tax advantage savings and retirement options, such as IRAs and 401(k)s, and investing in stocks, states Dan Caplinger of the Motley Fool.  These rules are difficult to dispute and one should keep them in mind.

When it comes to managing your portfolio, we suggest considering the following things to keep it low-stress and easy:

  • diversification
  • keeping costs under control
  • knowing what’s under the hood and exactly what is in your portfolio
  • having a strategy
  • knowing what your options are

The great thing is that ETFs offer some of these characteristics.  They enable investors to gain access to sectors without being overly exposed to a single stock, they offer more cost benefits than traditional indexes and they offer transparency which enables investors to know exactly what they hold.

To add icing to the ETF cake, there are more than 700 of them to choose from, so options are no problem.  For most of us, we just don’t have the time to manage our portfolios, but this should not be an  excuse.  We should all pick our battles wisely and use ETFs as our ammunition.

Kevin Grewal contributed to this article.

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.