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[menotti]

Someone want to explain the difference to me?  All the differences listed in my mutual fund's website seem to have to do with when the price is calculated, and who cares about that?  I'm not day-trading here.

[pedanterast]

ETFs trade continuously throughout the day, like stocks.  So, they aren't suitable for making regular small investments, because you pay a commission each time.  If you have around 5-10k at one time, though, it starts to become more cost effective to buy ETFs than mutual funds because the expenses for ETFs are slightly lower.  So all my retirement accounts contain mutual funds and all my non-retirement accounts contain ETFs.

Because ETFs trade like stocks, you can short 'em and use margin, unlike mutual funds.  I don't do anything like that personally.  But I do think the ability to get out during the day might be a big advantage, if the sh!t really hits the fan.  Like the first day after 9/11 when trading finally resumed.  The mutual fund people had to sit there all day while the ETF people could sell at the bell.

So for example Vanguard and similar fund families will have both options, a mutual fund and an ETF, tracking the exact same index or following the exact same strategy.  Now there are a lot of ETFs out there for speculation, like ones designed to give some multiple of an index's return, or the opposite of the index, or some multiple of the opposite of the index.

Anyway if you are investing $100 a week you need a mutual fund and if you are investing $50,000 you need an ETF, in general.