You’ve got to diversify your stock portfolio, right? The downside is that handling many positions in the stock market is difficult for beginner investors. However, there is another option and it’s a very good one . It’s called exchange traded funds and you will grow to love them once you realize their financial investing potential.
I’d estimate that a low amount of investors actual know what ETFs are , even to this day. I will assume you’ve maybe heard about ETFs here or there but are unsure of how they work and how to take action.
You might be thinking Mutual Funds in your head right now , and exchange traded funds are kind of similar, but much better. The thing is, ETFs trade just like stock. You can buy/sell/trade them at any moment . But they are far better .
When you invest in an exchange traded fund , you invest in a collection of stocks . For instance , you might buy an exchange traded fund that’s for the oil industry . Rather than researching lots of companies and creating many stock positions, you could buy a single ETF you are finished . Again, you can buy and sell them exactly like stock. It’s amazing
I’ve traded exchange traded funds for years and I used them to profit in the gold, oil & gas, etc markets. It’s possible to invest with entire indices, like the S&P 500 , with a single ETF .
What I like most about exchange traded funds is the ability to own a collection of stocks with a single ETF. With one pull of the trigger , I get a plethora of related stocks. Imagine you want to cash in on gold rush . What stock do you select ? What if many companies have lots of potential? Do you buy them all? Confused? Scared? Simply pick a good exchange traded fund that has multiple options in it and you’re ready to profit . It’s simple.
Honestly, I didn’t think about buying exchange traded funds initially . It sounded too much like a mutual fund. But then I discovered what they were and how they operated. Being able to trade them like stocks at my leisure was a gigantic selling point. No load fees, management fees and other nonsense . It’s a standard stock trade.
And what really sold me on them was the ability to quickly control market segments and benefit from it. Gold was heating up so I quickly sunk part of my portfolio into a good gold exchange traded fund and enjoyed watching it go up and up.
After you start investing with exchange traded funds , you might never want to buy individual stocks again. I do both however. If stocks are your passion , exchange traded funds can be used to quickly control a market segment you lack in your portfolio , which can free up your capital for other investment opportunities .
Just in case you missed it, exchange traded funds can be traded just like stocks. You can place market orders, stop-loss orders and limit orders with them. And yes stock enthusiasts , you can short them! I mean, what is not to love here? Before jumping in, I’d encourage to read up a little more and then get ready to expand your investment world.