What is an ETF? Investing for Beginners Series #10 // What are ETFs? explained david moadel
welcome to looking at the markets with David Modell today we're going to talk
about what is an ETF and just to let you know my email address is right down
there below it is David Modell at gmail.com in case you have questions and
there are no questions that are too beginner ish okay so don't be
embarrassed don't be afraid to ask those beginner questions it's alright and I
can help you with your questions I can help you learn about stocks and
investing and I can help you put together an investing plan because you
really need to have one so again the email address is right there alright so
what is an ETF or exchange-traded fund that's what ETF stands for well instead
of buying just one stock it can be safer to buy many stocks that's because
individual stocks can go up or down very quickly based on news events and
investor sentiment which is how investors collectively feel about the
stock at that moment so if you buy just one stock and then bad news happens
about that company your stock price can go down a lot very quickly but if you
buy many different stocks you're diversifying and your portfolio's value
will probably not go down as quickly when there's bad news about one company
it can take a lot of time money and effort to buy many different stocks to
make it easier you can buy an ETF or exchange-traded fund maybe you've heard
about mutual funds a mutual fund is like a basket of similar stocks that you can
buy or sell all at once an ETF is kind of like a mutual fund but with some nice
advantages let's talk about those advantages with an ETF the fees are
usually easier to understand and often smaller compared to mutual funds also
you can buy or sell an ETF instantly at any time when the stock market is open
much like a stock mutual funds are only priced once per
market day after the market closes so there's less flexibility in terms of
when you can buy or sell a mutual fund owning an etf can also sometimes be
simpler to deal with during tax time it's usually not very different from
owning a stock compared to a mutual fund and yeah I'm not a tax expert you're
gonna want to consult with a tax expert if you want the specifics on that but I
just want to let you know about my experiences when it comes to tax time
and ETFs and mutual funds now an etf can allow you to buy many stocks in the same
sector meaning the same group or type of stocks all at once here are a few
popular ETFs and the sectors that their holdings or the stocks contained in the
ETF are in the the particular sectors they're in I've listed some popular ones
so you've got XLF which is financial companies such as banks QQQ which is
technology companies these are all different
ETFs popular ones XLE that's energy companies such as oil natural gas and
coal xlu which is utilities or electric power companies
spwhy spy which is large companies dia which is very large companies IWM which
is small companies and GDX which is gold miners now there are also ETFs that
represent things other than groups of companies such as GLD is gold SLV is the
ETF for silver TLT is for bonds or bond yields UUP is the US dollar or
represents that sector or that particular currency USO represents oil
ewz represents Brazil the you know the entire country and their economy and
that kind of thing FXI is China and eza as South Africa so you can actually buy
ETFs representing how an entire country and their economy and their markets are
doing so be aware that when you buy an ETF such as GLD you're not actually
owning physical gold or if you buy SLV you're not actually owning physical
silver it's just a representation through an ETF if you buy TLT you're not
owning actual bonds UUP you're not actually owning dollars
USO is not actually barrels of oil or anything like that so just be aware of
that it's just a representation through an ETF these are just a few examples of
the many ETFs that are available as with any investment please be careful do your
research and always be aware of the risks involved all right so that's my
introduction to ETFs and I hope this was helpful to you if you like this video
please give it a thumbs up on YouTube and leave a comment and subscribe to my
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updates on my financial educational videos and once again you can contact me
at that email address down below if you want more help David Modell at gmail.com
thank you so much for watching and listening and I'll talk to you again
soon
you