5 Reasons to Ditch Mutual Funds and Buy ETFs Instead

It's virtually impossible to hand-select a diversified portfolio on your own. But diversification is risk management 101. You don't want your life's savings to depend solely on the performance of a couple of stocks you've cherrypicked.

Fortunately, mutual funds and exchange-traded funds offer an easy shortcut. Both can make you an automatic investor in a huge bucket of securities. That instant diversification makes mutual funds and ETFs less risky compared to single stocks, bonds, and other investments. The drawback, of course, is that you don't get the potential for huge gains that you do with a winning stock.

Similarities aside, when you compare ETFs versus mutual funds, ETFs are often the clear winner. Here are five reasons to bid adieu to mutual funds and invest in ETFs instead.

Source Fool.com