Monday, June 21, 2010

ETF?

While most people new to investing have a basic idea what "stock" is I would guess that your average Joe just starting out is not as familiar with the term "ETF". What is an ETF? ETF stands for Exchange Traded Fund and it is exactly what it sounds like. An ETF is essentially a share of a pool of assets that is bought and sold on a stock exchange.

The website Investopedia.com has this to say about ETFs:
What Does Exchange-Traded Fund - ETF Mean?
A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.

I recently found a useful website that has a lot of great articles on the subject of investing, especially about investing with ETFs. I personally found the article on Lazy ETF Portfolios to be helpful and of interest.

If you enjoy investing and want some intelligent yet easy to understand information regarding the subject go check out Mike at the Oblivious Investor.

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