08-18-2014, 11:04 AM
The standard argument for funds and etf's is that you can buy a bundle of stocks (instant diversification, even though one might not want many of the stocks) without investing a lot of money. I disagree, but that's just me.
If you have limited funds to invest, say $100 periodically, than look at a DRIP with OCP plans. The min purchase amount will vary from zero to $100 with no fees and the dividends will be re-reinvested with fractions of a share (big deal in the long run). Even a fraction of 1% fee will add to thousand of dollars over time, that's why the etf companies have large offices and can afford the fancy advertisements. If a company offers etf's and there is $5 billion invested, with only 0.60% fee, their income is $30 Million.
If you have limited funds to invest, say $100 periodically, than look at a DRIP with OCP plans. The min purchase amount will vary from zero to $100 with no fees and the dividends will be re-reinvested with fractions of a share (big deal in the long run). Even a fraction of 1% fee will add to thousand of dollars over time, that's why the etf companies have large offices and can afford the fancy advertisements. If a company offers etf's and there is $5 billion invested, with only 0.60% fee, their income is $30 Million.