Saturday, October 1, 2016

Exchange Traded Funds (ETFs)

     Are you looking to invest money?

     Smart investments are made via Exchange Traded Funds.

     Your investment account may be large or small.  ETFs aren't biased.  They have been compared, functionally, with mutual funds.

     Compared with a mutual fund, an ETF is a collection of stocks or bonds.

     ETFs are track indexes, for example, NASDAQ-100 Index, S&P 500, Dow Jones, etc. When you buy shares of an ETF, you are purchasing shares of a portfolio.  The portfolio tracks the yield and return of its native index.  ETFs don't try to outperform their corresponding index, but simply replicate its performance. They don't try to beat the market, they try to be the market.

     ETFs have been around since the early 1980s, but they've become popular within the past 10 years.

     How are ETFs priced?


    "An ETF’s underlying net asset value is calculated by taking the current value of the fund’s net assets (the value of all securities inside minus liabilities) divided by the total number of shares outstanding. The net asset value, or NAV, is published every 15 seconds throughout the trading day (http://guides.wsj.com/personal-finance/investing/how-to-choose-an-exchange-traded-fund-etf/)."


     "Unlike mutual funds, ETFs can also be used for speculative trading strategies, such as short selling and trading on margin. In short, the ETF allows investors to trade the entire market as though it were one single stock (http://www.investopedia.com)."


     Etfs are smart investments.