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ETF Guide – Exchange Traded Funds

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If you’re thinking about investing in ETFs, you are not alone. These funds, which are “exchange traded funds”, are gaining more and more adherents all the time. This is because they offer some key advantages to the average investor.

So this post will be a quick ‘n dirty ETF Guide for you.  Let’s get started.

ETFs are like mutual funds, so the pool of investment risk is shared by many people. However, they are traded just like stocks, and thus certain advantages that stocks have over mutual funds such as allowing investors to collect dividends, do intraday trading, and pay stock broker commissions instead of high management fees. Also, ETFs are used for “passive management” investment strategies, notably the ETF Wrap, where all invested monies are in ETFs, allowing an investor to have an “autopilot” investment strategy that uses indices instead of relying on the fallibility of active trading.
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ETF Trend Trading

ETF Trading – Benefits Of Exchange Traded Funds

ETF Trend Trading
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ETF Trading
Exchange Traded Funds (ETF) have recently become a great and frequently preferred alternative to the mutual fund.
What Is An Exchange Traded Fund?
ETFs are securities that are made up of many different stocks.  In that way, it’s quite similar to a mutual fund.  However, with and ETF, the stocks all have something in common (we’ll get to why that’s such a huge advantage in a bit).   It may be based on an index or an industry sector.  Those are the most common.  Sometimes, a fund may be based on the country the companies are tied to, but this isn’t common.
Like mutual funds, ETFs are diversified investments, so your risk of loss is roughly the same as it would be with mutual funds.  However, they hold several advantages over mutual funds.
Top 4 Benefits Of Exchange Traded Funds
1) Trending – Due to the fact that the stocks all have something in common, they tend to trend more predictably that regular stocks.  That means whether the trend goes up or down, you can make significant returns with very little effort (Learn how to make money from ETF Trend Trading).  This is the biggest advantage and the reason why you should consider adding ETFs to your portfolio.
2) Bought And Sold Like Stocks – And ETF is bought and sold just like a regular stock so stop-loss and limit orders are available.
3) Lower Fees – Another selling point of ETFs is their low fees, some as low as .2%.  Since the companies all have something in common, the amount spent on market analysis is significantly reduced.
4) Transparency – While a mutual fund only reports their holdings twice a year, an ETF can be viewed in real time any time you want.

ETF Trading

Exchange Traded Funds (ETF) have been gaining attention recently and are quickly becoming the  preferred alternative to mutual funds.

What Is An Exchange Traded Fund?

ETFs are securities that are made up of many different stocks.  In that way, it’s quite similar to a mutual fund.  However, with and ETF, the stocks all have something in common (we’ll get to why that’s such a huge advantage in a bit).   It may be based on an index or an industry sector.  Those are the most common.  Sometimes, a fund may be based on the country the companies are tied to, but this isn’t common.

Like mutual funds, ETFs are diversified investments, so your risk of loss is roughly the same as it would be with mutual funds.  However, they hold several advantages over mutual funds.

Top 4 Benefits Of Exchange Traded Funds [Read more...]

Filed Under: ETF Trading Tagged With: , , , , , ,
ETF Trend Trading