WTF are ETFs
The two articles below are wonderful.
Exchange Traded Funds, or ETFs, are a financial instrument born out of a 1988 840-page SEC Black Monday postmortem. An…www.bloomberg.com
Some people are happy to simply use a range of devices like wristwatches and computers, and trust that things will work…www.investopedia.com
Let’s say two securities are worth .50$ each in the market. The ETF owns the underlying stock and forms a “Creation Unit” that gets chopped into bits and sold in the market.
In life always invest in things that don’t change with time. For example, Amazon’s Jeff Bezos says, it is impossible for him to imagine a day where customers will not want a large selection, cheaper prices and fast delivery, so investing in them today will pay dividends tomorrow.
What is not going to change in the next 10 years?
The value of the top 500 companies in the stock market will be always be smaller today than in the future. Therefore, invest in Vanguard 500 Index Fund (VOO)
Healthy companies that grow their dividends year over year will be more valuable. Therefore, invest in Vanguard Dividend Appreciation ETF (VIG).