Investing in ETFs differs from investing in mutual funds and individual stocks in some important ways, as the following table shows. As a smart investor, you can't ignore the advantages that ETFs offer.
| ETFs | Mutual Funds | Individual Stocks | |
|---|---|---|---|
| Priced, bought, and sold throughout the day? | Yes | No | Yes |
| Offer some investment diversification? | Yes | Yes | No |
| Is there a minimum investment? | No | Yes | No |
| Purchased through a broker or online brokerage? | Yes | Yes | Yes |
| Do you pay a fee or commission to make a trade? | Typically | Sometimes | Yes |
| Can that fee or commission be more than a few dollars? | No | Yes | No |
| Can you buy/sell options? | Sometimes | No | Sometimes |
| Indexed (passively managed)? | Typically | Atypically | No |
| Can you make money or lose money? | Yes | Yes | You bet |