Watching the roller coaster ride of the stock market can make many investors queasy. Even though the stock market has, historically, always trended up, investors can’t help but feel uneasy as they watch the values of their portfolios rise and fall with the market. That is, unless they also have a portion of their money in the bond market and in short term savings.
ETFs and indexed mutual funds are emerging as the investment of choice for investors who are discovering the virtues of passive investing. Not surprisingly, they have both seen an explosion of growth and are especially popular choices for retirement plans and investors with a long time horizon. With all of the attention they are garnering comes the question as to which investment op