February 18, 2022

Investing in Exchange-Traded Funds (ETF)

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If you’re a casual investor in the stock market, most of the experts agree: diversify your funds.

But what does that mean? It means to not put all your eggs in one basket—or even cherry-pick a few different stocks. Go with indexes or exchange-traded funds (ETFs) that tend to grow over time.

You should always consult a financial analyst before investing, but if you’re interested in learning more about the types of ETFs available, Centers Health Care has details on three of them that are called “no-brainer investments” by many.

  1. S&P 500 ETF

The S&P 500 is an index that includes around 500 stocks from some of the largest companies around the world in many different sectors. This ETF mimics the S&P 500, which holds up well against stock market volatility and may incur short-term losses but has been proven to grow over time.

  1. Total Stock Market ETF

Unlike the S&P 500 ETF, a total stock market ETF will invest across companies regardless of their size. Since the ETF will touch nearly every corner of the overall stock market, it tends to reflect the overall market, which has grown over time even if some individual stocks do not perform well.

  1. Growth ETF

If you’re one to carry more risk, try a growth ETF. These identify stocks that have the potential for rapid growth, but while you can get higher-than-average returns, they also contain more risk, as fast-growing companies can also see their bubble burst. Many who choose a growth ETF will also pair it with an S&P 500 ETF to balance out the risk in their overall portfolio.

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