An exchange-traded fund (ETF) is a type of investment vehicle that tracks a particular index, such as the S&P 500, or a specific commodity, such as gold. ETFs are traded on stock exchanges, like stocks, and they offer investors a convenient way to diversify their portfolio with a single investment.

One of the main benefits of Index investing is that it allows investors to easily diversify their portfolio without having to buy individual stocks or bonds. For example, an ETF that tracks the S&P 500 will hold a diverse range of stocks from different industries, reducing the risk of investing in just one or a few individual companies.

Another advantage of ETFs is their low cost. Most ETFs have low expense ratios, which means that they charge lower fees than actively managed mutual funds. This can make them an attractive option for investors who want to keep their investment costs low.

Yet another important advantage is that the investor can continually hold the same ETF, adding capital if possible, and not have to think about the subject of investing. This is especially applicable during a major market decline. If, instead, holding concentrated individual stocks, many investors panic and sell exactly at the this inopportune time. By contrast, if holding an ETF there may be far less pressure to sell (in part because one will not 'blame oneself', and in part because one will have less fear of one or two firms going out of business during the panic). Instead, by holding for the long-term, the ETF investor will then realise the return of the ETF - which will over time outperform the majority of hedge funds and mutual funds, owing to ETFs having a far lower management cost.

If Index investing requires little thought, once purchased, then perhaps the Shrewdom Index Investing board should then, in theory, not require many posts. Yet it can be interesting for investors to discuss the particular ETF products have the lowest cost and therefor most reliably track their target index, and to encourage one another to stay in for the long-term. It is also interesting to discuss the relative longer term expected CAGR (compound annual growth rate) over different indexes. For example, by simply changing from a market-cap weighted US stock index (such as SPY which tracks the S&P500) to an equal-weighted-index such as RSP, the investor will in the past, if held though their whole career, have realised a 1% to 2% long-term improvement in after-tax performance.

I encourage you to take the time to leave shrewd posts to this board to share you excellent ideas and research findings with others. Within the gates of Shrewdom, you'll observe a merry spirit, and many waiting for your most shrewd observations so that we can collectively grow and prosper.

- Manlobbi