Your Guide to ETFs and Mutual Funds

Graphic of mutual funds
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It’s the Battle of the Century. No, not Good versus Evil. It’s not the Yankees vs. the Red Sox either. This rivalry is bigger. ETFs vs. Mutual Funds, that’s the heavyweight bout on this card.

Is an ETF really better than a mutual fund? Depending on who you ask, you’ll get a different answer. 

Are we giving you the answer? No. Are we giving you all the information you need to form your own opinion? Absolutely.

That's the goal here. To give you enough information to make an educated financial decision that will have a positive impact on your portfolio or investing strategy. However, before we tackle the question, let’s explore the fundamentals.

What Are ETFs and Mutual Funds?

Since, it’s important to understand how an ETF and a mutual fund work before you can decide which is a better fit for your portfolio, both Lee and I wanted to get you started with the basics.

Should I Pick an ETF or a Mutual Fund?

Once you have a better understanding of the two investments and how they function, it’s time to decide which asset is right for you. These articles will be beneficial for your decision process since they give you a perspective from both sides of the investment coin. (Notice the subtle title swap)

    The Advantages of ETFs and Mutual Funds

    As you can see, both investments have pros and cons, as do all investments. But sometimes it’s beneficial to focus on the advantages of each type of fund and see what can really work for your particular investment strategy.

    The Disadvantages of ETFs and Mutual Funds

    Pros are good, cons are bad. Risk management is too important to ignore, so understand the disadvantages of both funds before you make them part of your investing arsenal.

    ETF and Mutual Fund Investment Strategies

    Now that you know all about ETFs and mutual funds, how do you use them? There are many investment strategies for both products, it’s just a matter of deciding which ones can work best for you.

    The Tax Implications of ETFs and Mutual Funds

    Then there’s the biggest question of all. How will investing in ETFs and mutual funds affect your tax return? Depending on the fund, where you invest, and when you close your position, tax rates will vary. That’s why it’s important to know how each investment will impact your April.

    Are ETFs right for you? Are mutual funds the better choice? It is always a case-by-case answer, but now you have all the information you need to make the right decision…from two expert witnesses.

    However, you still may have questions and concerns, and that's okay. We both recommend you consult a financial professional such as your broker or financial advisor before making any trades. No investment is without risk and ETFs and Mutual Funds are no exception, to be sure to conduct thorough research before you hit the market.

    Once you are armed with all of the data you need, good luck with all of your trades!