What’s ETF?

What’s ETF? Have you ever purchased a basket of apples in a supermarket? Similarly, ETF is a basket of assets such as: stocks, commodities or bonds. Simply put, it can be also traded in an exchange just like a stock. Investors of ETFs get paid from earned interest or dividend. ETF is less volatile than stock because of its diversified portfolio characteristic. As a result, you won’t see any short squeeze like some stocks may have. It’s friendly for investors who are looking for less risky investment. ETF is usually to focus on a particular market index. However, there is a large range of ETFs you can choose from in the market right now. It may be difficult to choose a good one. Personally, I still liking the tech sector. Here are two of the ETFs I’m looking at: PowerShares Dynamic Semiconductors ETF and iShares S&P/TSX 60 Index Fund.

P.S. I don’t have any position in any ETFs at the moment.

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