Buying an ETF compared to a Mutual Fund

[Tfall]

I have always invested in individual stocks and Mutual funds but never an ETF. I would like to know if an ETF trades the same as a stock or is it like a Mutual fund? I’m looking at a few ETFs and is it like a Mutual Fund were it buys and sells the next day or is a ETF like a stock where it buys and sells instantly?

[NitroZ7]

Unlike mutual funds, etfs are bought and sold like stocks and their price fluctuates during the day just like a stock. A mutual fund is priced according to its net asset value which is the price of all the stocks it own whereas an ETF can trade at a premium or discount to its NAV. Some elf's may also be optionable.

Mutual funds distribute capital gains and losses so they may be less tax efficient. The fees for owning an ETF and the minimum to invest are normally much lower with an ETF. One thing you should look at when buying an ETF is its liquidity. If you are buying a large well known etf like SPY then this shouldn't be an issue.

[Tfall]

Thanks for the info Nitro.