If this question has come up before, perhaps someone could point me to it.
I was just wondering how most people choose to invest in indexed funds - a mutual fund or an ETF. I know there are some tradeoffs - for example, at Vanguard, I can buy and sell Vanguard funds without a transaction fee, whereas the ETFs have transaction fees. Sometimes the expense ratios are a little lower on the ETFs, however.
Do most people calculate the difference in the expense ratio for the amount of $ they plan to invest, and determine which is more cost efficient? Or, do you just assume if you will be re-balancing that the mutual fund is more cost effective in the long run? Do you take other factors into consideration, such as the ability to buy/sell an ETF at a specified price throughout the day?
I'd appreciate any thoughts on this. Thanks.
I was just wondering how most people choose to invest in indexed funds - a mutual fund or an ETF. I know there are some tradeoffs - for example, at Vanguard, I can buy and sell Vanguard funds without a transaction fee, whereas the ETFs have transaction fees. Sometimes the expense ratios are a little lower on the ETFs, however.
Do most people calculate the difference in the expense ratio for the amount of $ they plan to invest, and determine which is more cost efficient? Or, do you just assume if you will be re-balancing that the mutual fund is more cost effective in the long run? Do you take other factors into consideration, such as the ability to buy/sell an ETF at a specified price throughout the day?
I'd appreciate any thoughts on this. Thanks.