Are index funds that trade just like stocks on major stock exchanges. Want to invest in the market quickly and cheaply? ETFs are the most practical vehicle. They help the investor focus on what is most important, choice of asset classes.
All the major stock indexes have ETFs based on them, including:
Dow Jones Industrial Average
Standard & Poor's 500 Index
Nasdaq Composite
Dow Jones Industrial Average
Standard & Poor's 500 Index
Nasdaq Composite
There are ETFs for large US companies, small ones, real estate investment trusts, international stocks, bonds, and even gold. Pick an asset class that is publicly available and there is a good bet that it is represented by an ETF or will be soon.
ETFs differ fundamentally from traditional mutual funds, which do not trade midday. Traditional mutual funds take orders during Wall Street trading hours, but the transactions actually occur at the close of the market. The price they receive is the sum of the closing day prices of all the stocks contained in the fund. Not so for ETFs, which trade instantaneously all day long and allow an investor to lock in a price for the underlying stocks immediately.
Source: Google search (source wasn't recorded at time of reading)
No comments:
Post a Comment