The ABCs of ETFs

Exchange-traded funds are becoming popular. Here's what you need to know about them

About 10 years ago, I was asked to draw up a list of predictions for the mutual-fund industry. O.K., so I was wrong about money-manager trading cards, and Peter Lynch didn't run for President. But I got this right: entire stock portfolios now change hands at the click of a mouse. I stand by my assertion that one day most mutual funds will do the same. They'll be priced throughout the day--not merely at the close--and traders will shoot in and out of them as they would an overhyped IPO.

It's all part of the growing importance of individual investors, who...

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