Investing made easy for everyone :
For busy people who don't have the time or knowledge to follow individual stocks, they can invest in securities know as Exchange Traded Funds (ETF's). Those funds are essentially baskets of stocks that tracks specific sectors and geographical areas. Those ETF's are very liquid securities that are traded like stocks on major exchanges. The management fees of ETF's are much lower than active managed funds. They represents a good investment product alternative considering that only a low percentage of mutual funds actually performs better than the major index averages.
An investment in a specific stock can result in a 100% loss if the company declares bankruptcy. It would be quite rare for an investment in an ETF to incur a 100% loss because it would require that all the companies in the fund files for bankrupcy. Therefore, an ETF can be used as a long term investment if you believe in the long term prospects of that index, country or sector. The degree of volatility reflect the representation of the underlying securities of the fund. Still, it is not unusual for ETF's of emerging countries to have big percentage gains or losses on any given year. So it is important to have a well diversified ETF's porfolio.
They are well suited for people who likes to invest a fixed amount of cash into those funds per month or per year in good or bad markets. The flexibility of ETF's allow you to diversify your porfolio by investing in countries like China and India, in indices like the Dow Jones industrials and the S&P 500, and in sectors like energy and financial.
You will find a list of those ETF's on this website.
Note : The information provided here are not intented as investment advice. Please consult your investment adviser before making any investment decision.
Investing made EASY
