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With regard to ETFs, don't they typically only make sense when dealing with large amounts of money? It was my belief that the commissions/costs would erode any benefit when dealing with smaller amounts of money. Thank you for the direction to the iShares website for further reading/learning.

It really does depend on how much you are investing at one time, how many ETFs you want to hold, how often you will invest, how low you can keep your fees, and why are you using them.

I have my taxable account invested through ETFs and I hold a small number of them. I invest a small number of times a year with large sums at each time (I funnel as much money as I'm allowed to through my company's stock purchase plan for an almost guaranteed 17.5% gain and then feed this twice a year into the ETFs along with additional funds) and I use a discount broker. My yearly expenses are below 0.25% of the money invested as a one time fee.

Now, having said that, I think you should have some other reason to be using them. The above only explains how to keep the costs low if you are going to use them for some reason. Perhaps there is a sector that doesn't have a suitable mutual fund for you, perhaps you wish to "time" your market hopping (good luck - you'll need it), perhaps you don't live in the US and don't have access to some good low cost mutual funds, or perhaps like me you are a non-US citizen who wants low cost investments that they can take with them when they leave the US.

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