What I Didn't Know About the ETF Liquidity Illusion
While you may believe it's possible to convert ETF assets into cash instantaneously, that's not always the case.
What I Didn't Know About the ETF Liquidity Illusion
Overview
When I was first introduced to exchange-traded funds (ETFs), I was smitten. ETFs offer instant portfolio diversification, reduced market volatility risk, instant execution, attractive expense ratios, and tax efficiency. In other words, they're everything I want in an investment that grows while also letting me sleep well at night.
One of the things I remember liking about ETFs is how liquid they're supposed to be. I told myself that I could sell off underlying investments if I ever needed quick cash. As I became more familiar with my holdings, though, I realized that the liquidity I dreamed of was a bit of an illusion. Here's why.
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Originally published at www.fool.com.
