ETFs are great for both beginners and stock market experts. They are relatively inexpensive, available through robo-advisors and traditional brokerage firms, and tend to be less risky than investing in individual stocks. Like most ETFs, index mutual funds are considered passive investments because they reflect an index. They can also be an economical way to invest, many have annual expenses of less than 0.10%.
While ETFs offer a number of benefits, the low cost and myriad investment options available through ETFs can lead investors to make reckless decisions. In addition, not all ETFs are the same. Execution prices and discrepancies in monitoring can cause unpleasant surprises for investors.