That is a debatable issue.
On the negative side is John Bogle, the founder of the Vanguard Group of Funds. He said in an interview with Barron’s earlier this month that the ETF is “not for the individual investor.” He cited the dangers tied to so much trading and the inappropriate mix of investments.
On the “maybe” side is another Vanguard official who said it is possible to make money, but only for someone with considerable ability to read market signals.
Joel Dickson, a senior investment strategist and a principal in Vanguard’s Investment Strategy Group, said at the indexes panel that it is possible to turn a profit by taking advantage of a short-term fall in the market that sends ETF prices heading down faster than the value of the underlying stocks or bonds.
But Dickson said it is also easy for the individual investor to misread markets.
“Most retail investors,” Dickson said, “are not going to be able to take advantage of ETF market price differences because hedge funds are the ones making those calculations and keeping prices in a band.”