Investing ain't easy, I'll be the first to admit.  There's lot of information out there, much not very important, and some that's very important.  That's the analytical side.  The emotional side is sometimes the biggest stumbling block.  We are wired to act irrationally at times, and we do.  This can be unhelpful if you're looking to retire early, or retire at all.

So what's a person to do?  For many individuals, sticking to a consistent savings program is at least as important as the return they earn.  This can add a degree of rationality as funds are added regularly when the natural tendency of most investors tends to lean toward adding more in good times and less in bad ones.

But where does one (or should one) make these regular investments?  One investment vehicle that's received a lot of recent media attention, including a Barron's cover story earlier this month, is Exchange-Traded Funds (ETFs).  Like index mutual funds, ETFs offer a low-cost way to invest in both broad market indexes (such as the S&P 500 Index) as well as more specialized areas such as Emerging Markets or Small Cap stocks.  Nothing wrong with the concept.

ETFs offer an additional bonus (or not as we'll see later):  unlike mutual funds that are only traded after the market closes, ETFs trade on exchanges (in other words, all day long).  And, cheaply.  

And here is where, in my experience, our little tale of do-it-yourself investing might go awry for investors.  If something can be done, it will be done.  Over and over. Since ETFs can be traded, they very likely will be traded.  Excessively.  

A little portfolio tweaking here and there.  Or gee, "I don't really think emerging markets are going to be good this year".  Or "technology stocks are soaring, I've got to buy a Tech ETF".  You get the idea.

It's my belief that investor behavior is the primary factor in investment results.  Warren Buffett wrote the following last year about stock investors, but he could have also said the same thing about those considering ETFs: 

"Those people who can sit quietly for decades when they own a farm or apartment house too often become frenetic when they are exposed to a stream of stock quotations and accompanying commentators delivering an implied message of "Don't just sit there, do something." For these investors, liquidity is transformed from the unqualified benefit it should be to a curse."

Remember this: in investing, the more decisions you make, the more chances of making mistakes.  Oh sure, some people will get the game figured out and trade ETFs successfully, but the vast majority won't.  And the extra liquidity of ETFs could actually contribute to their poor results.  An apparent advantage in reality becomes a disadvantage.

Considering costs in investing is important.  I think every investment should be considered after the impact of costs.  However, costs are not the only factor one should consider.   In my view, neglecting to consider the role that emotions and behavior play in investing is a mistake.

Just remember, your emotions can be your biggest enemy, and resolve to protect yourself--from yourself.  Failure is not, or should not, be an option.