The ETF Market - A Guide For the Beginner
When an investor takes their first dip in the scary pool known as the stock market, it can be a swim or sink experience.
Many first time investors know little other than they are looking for a safe investment for their money.
Where is a first time investor's money safest? Are well established stocks safer than a slow growing mutual fund? Is there another alternative to stocks and mutual funds? Yes, there is another type of investment that is not as well known as stocks and bond.
This is the ETF market.
The etf market can offer a positive experience for the first time investor.
An exchange-trade fund, or ETF for short, is a lot like a mutual fund.
Just like a mutual fund, the ETF contains multiple different stocks that are traded on the stock market.
Unlike a mutual fund the ETF is actually traded on the market such as a single investment piece of stock may be.
The unique aspect of the an ETF is that they are comprised of the same companies as the index is designed to track.
These are usually already established and relatively;y stable indexes.
A huge disadvantage to a mutual fund is that it is not able to be traded on the stock market.
This is not the case with the ETF market.
An exchange-fund index can be bought and sold on the stock market floor.
This leads to a more exciting portfolio for the first time investor.
Since the ETF investor's portfolio is comprised of many different stocks, there is less risk involved than if the investor had all their money invested in the outcome of one specific stock.
This year, 2010, investors will hopefully see the addition of ETF number one thousand.
The ETF market is currently trading at record breaking levels.
If it continues at the pace it is on, it is possible that ETF's will be some of the most lucrative investments in the market.
With more and more global ETFs being added into the stock market, investors of all types should feel safe putting their money into the ETF market.
Many first time investors know little other than they are looking for a safe investment for their money.
Where is a first time investor's money safest? Are well established stocks safer than a slow growing mutual fund? Is there another alternative to stocks and mutual funds? Yes, there is another type of investment that is not as well known as stocks and bond.
This is the ETF market.
The etf market can offer a positive experience for the first time investor.
An exchange-trade fund, or ETF for short, is a lot like a mutual fund.
Just like a mutual fund, the ETF contains multiple different stocks that are traded on the stock market.
Unlike a mutual fund the ETF is actually traded on the market such as a single investment piece of stock may be.
The unique aspect of the an ETF is that they are comprised of the same companies as the index is designed to track.
These are usually already established and relatively;y stable indexes.
A huge disadvantage to a mutual fund is that it is not able to be traded on the stock market.
This is not the case with the ETF market.
An exchange-fund index can be bought and sold on the stock market floor.
This leads to a more exciting portfolio for the first time investor.
Since the ETF investor's portfolio is comprised of many different stocks, there is less risk involved than if the investor had all their money invested in the outcome of one specific stock.
This year, 2010, investors will hopefully see the addition of ETF number one thousand.
The ETF market is currently trading at record breaking levels.
If it continues at the pace it is on, it is possible that ETF's will be some of the most lucrative investments in the market.
With more and more global ETFs being added into the stock market, investors of all types should feel safe putting their money into the ETF market.
