Beware Your Own Impatience

There's a growing suspicion in the air concerning a variety of risks in exchange-traded funds, especially in niche areas such as bank-loan funds and junk-bond ETFs. There's something about the way investors use ETFs that fritters away so much benefit. Let's start with the most obvious error: Chasing rallies in niche ETFs. Vanguard Group founder John Bogle famously distrusts ETFs, arguing that the ease of trading encourages investors to sabotage their own best interests. The thing is, investors do a fine job of self-sabotage on their own, and triggerhappy investors surely self-select their way into ETFs.