2020-06-29 15:42:35, Eric Rosenberg, The Balance
Content Categorization
/Finance/Investing
/Business & Industrial
/News/Business News/Financial Markets News
Word Count:
1447
Words/Sentence:
20
Reading Time:
9.65 min
Reading Quality:
Adept
Readability:
13th to 15th
The ETF combination of instant diversification and quick liquidity is a good reason to consider them as a first investment or part of a veteran portfolio.
ETFs will trade nearly instantly when you enter a trade online with your favorite brokerage.
Prior to that, competitive ETFs from companies like Vanguard, Fidelity, and Schwab led the competition with low fees well under 0.1%. Compare multiple ETFs for fees and other features before you buy them.
That offers you lots of diversity with some degree of a safety net as all investments are focused in the US.
Historically the S&P 500, which in some ways is a proxy for the overall United States economy, returns about 10% per year over a long horizon.
ETFs allow you to buy and sell funds like a stock on a popular stock exchange. This is different from traditional mutual funds, which only allow you to trade at the end of a business day.
The index focuses on the total return of the United States stock market, making it even more diverse than an S&P 500 fund.
The best proxy for comparison of past performance is the Fidelity Total Market Index Fund (FSTMX).
Keywords
investing, investing-for-beginners, investing-in-etfs
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