Interested in cheap ETFs, need beginner advice

I wouldn't start trading. I'd start investing. It's really commendable that you're interesting while in college, but trading is a different animal. A lot of guys say they are traders. All you need to do is ask them which brokerage they use. If it's E-trade, or Ameritrade, they aren't serious traders. You need a broker like IB, where you can route trades to selected market centers, place hidden orders, and access dark liquidity pools.

If your heart is set on trading, find an account to practice on with fake money. Even then, you aren't even beginning to touch on how to properly route and hide orders.

What I would do if I was you is buy a couple of dividend paying stocks, and let this sit until we have a real market correction. I'd buy some utilities right now. Then to further your education in "trading", if this is what you want to do, you can show discipline and restraint, and take no action until we've had a real correction. Discipline is an important quality in trading, and you might have to wait several years before you have real opportunity. Then you could sell your dividend payers and buy the Wilshire 5000 index as close to the bottom as you can come. And by then you should have some more funds, and can conservatively trade around the broader market index.

Or go ahead and start to "trade", and guys like me will rip you to pieces. Because I trade, and I still get ripped to pieces, I just win slightly more than I lose. And I've done it a long, long time.

By the looks of his post I don't think he meant "trading" as you're thinking of it. I think he meant to say investing, or simply getting in the market. I don't see why he would "trade" ETF's over anything else.

I misunderstood. But golly, when I read trading I thought it was my duty as a decent guy to do everything to discourage him. It's a full time job.

What I said about buying some utilities and waiting for an opportunity to buy a broad based index fund after a significant correction still goes though. My opinion only. I bought the Wilshire and SPX in 2009. Everyone always says buy low and sell high, yest almost everyone can't do this. I'm not sure now is the time for the young man to be buying an ETF. All he has is time. Why not wait it out and get paid some dividends without a lot of risk to capital in the interim?

Tell that to my bank account.

Are you looking at the 20-40 range because you can afford more shares than you could of SPY, or because you can't afford 1 share of SPY? Nothing wrong with that if so, especially as a student, but don't let the number of shares cloud your judgement. Lots of goons around here buy 10,000 shares of a penny stock and think they are some big swinging dick market genius, but the share count is irrelevant and simply a number. Buy whichever one you want now and start spreading your positions out once you can make buys of $500-$1000 at a time.

You are better off to use ETFs as a buy and hold because you don't have enough to meet the mini for a mutual fund.

If the problem keeping you from Vanguard is the costly share costs, check out Sharebuilder as a broker.

You can buy fractional shares so you can always buy whatever stock you want even if it is Google.


Just don't set up automatic trades for TOO little an amount, or the cost basis will eat you alive.

VUG
VYM
VWO

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6.95 a trade on stocks/ETF

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I know it doesn't have the same thrill, but you want to use the automatic investment plan for cheaper fees to start.

Not sure as to what kind of tax wrapper you are putting this in, or your goals with it, but I would consider:

BIV (~10%)
VDC
VYM
VUG

Good choice.

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If you watch VWO (Emerging markets), I have noticed since owning it, it fluctuates between $37.50 and $44ish. Watch it and I would jump in anytime it gets near $38.

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This is purely coincidental. Even if you believe that stocks trade in a range, this is the aggregate value of possibly hundreds of constituents of the ETF, not something that people buy and sell based on technical indicators(which I think are bs in the first place).