Amanda Stanhaus

Tag: ETF

Exchange Traded Fund

ETF. A mutual fund, but trades like a stock. Pluses include the diversification of a mutual fund and the convenience of stock.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Index

A measure of the market overall.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Index Investing

Returns are based on market returns. Watch out, it’s expensive to recreate the index.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

401 (k)

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40-what?

I hadn’t finished my first day and human resources (HR) already brought up how it’s going to end. Not already! But eventually, I’ll be retired and living off my 401(k).

(click on the bold-faced vocab words:))

Once I set it up, my 401 (k) will be automatically filled with a cut of my paycheck and invested in the vehicle of my choice.

Porsche? No…investment vehicle options include bondsstocksmutual funds and etfs.

Each company’s plan is different, but perks can include:

  • $ invested before Uncle Sam takes a bite from my paycheck.
  • $ made from the investments does not have to answer to Uncle Sam until withdrawn.
  • Each contribution can have an identical twin, courtesy of my company.

Never thought I would have a desktop clock counting down the seconds till I turn 65.

Hope I look as fabulous as Iris then!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

ETF? WTF?

Financiers LOVE their acronyms more than $$. The more not obvi(ous) the better!

ETF= Exchange traded fund.

(click on the bold-faced vocab words:))

ETFs are giving Mutual Funds (MFs) a run for their money in the popularity contest that is the stock market.

Why hot?

Best of both worlds: ETFs allow for diversification (like a fund) and frequent trading (like a stock).

Easy access: ETFs don’t have minimum investment requirements like MFs. Good news for newbie investors.

Why not?

Tips: Owners have to pay extra $$ per trade. If dollar cost averaging is your investment strategy, then commissions are your enemy.

Passive Action: Index investing is really the only option for these babies. You have to believe the market is efficient (and be anti-Warren). Do you believe??

When you make the MF/ETF decision…ALWAYS read the prospectus.

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)