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How do I buy an ETF cheaply?

December 7, 2012: 6:30 AM ET

How would I purchase an ETF? What is the cheapest way to buy an ETF? – Name withheld

Exchange traded funds (ETFs) are widely available from a variety of brokerage firms, says Roger Woodman, founder of Roger F. Woodman Jr. & Co., a financial advisory firm in Portland, Maine. Just open an account at a major online broker such as Fidelity, Vanguard, Charles Schwab, E*Trade, or TD Ameritrade, and you can buy or sell them online, as with individual stocks, for a few dollars a trade.

In terms of cheap ETFs, Woodman recommends the proprietary ETFs offered by Vanguard and Charles Schwab. Schwab's U.S. Broad Market ETF (SCHB) and Vanguard's S&P 500 ETF (VOO) are typically among the cheapest, with expense ratios of 0.04% and 0.05%, respectively.

— Marc Mewshaw

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