DIY Money | Personal Finance, Budgeting, Debt, Savings, Investing ETF v. Mutual Funds
Jun 9, 2025
A captivating discussion on the differences between ETFs and mutual funds unfolds, guiding you through key considerations for your portfolio. The importance of trading flexibility, expense ratios, and tax efficiency takes center stage. Strategies for investing in children's accounts are highlighted, showcasing the ease of mutual funds versus the agility of ETFs. Additionally, the psychological factors influencing investment behavior provide intriguing insights, making this an essential listen for anyone navigating the investment landscape.
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Choosing ETFs vs Mutual Funds
- Compare ETFs and mutual funds by looking at expense ratios and tax efficiency, but fees matter most in long-term investing.
- Use ETFs for lower costs if possible, but mutual funds are fine especially if your broker offers fractional shares to invest fully each dollar.
Intraday Trading Benefits of ETFs
- Buy ETFs if you want to trade intraday and act quickly on market moves.
- Most investors won't need intraday trading since daily price differences rarely matter.
Consider Tax Accounts and Temperament
- Tax efficiency differences between mutual funds and ETFs don't matter much inside retirement accounts.
- Choose funds with the lowest cost and consider your temperament to decide between ETFs or mutual funds.