Exchange Traded Funds (ETFs) are simply a fund you can get into that tracks the indexes of the NASDAQ-100 Index, S&P 500, Dow Jones and more. When you buy into an EFT, you are actually buying shares of a portfolio that tracks the yield and the return of its selected (native) index.

Still a little confused? That’s fine; ETFs are a little confusing at first. Think of it this way: An Exchange Traded Fund is something that doesn’t try to outperform the index that it tracks, or beat the index per say, it simply tries to tie itself to the selected index and actually be the index. ETFs don’t want to beat the market like other investments do, they want to perform with and be the market.

Benefits of ETFs

The main benefits of buying ETFs are that they combine the range of a diversified portfolio together with the simplicity of trading a singular stock. Investors are able to purchase ETFs shares a number of ways, including:

• Margin
• Short Sell Shares
• Hold for the Long term

More on ETFs to follow so stay tuned. As for the mean time, look into some ETFs that may be worth your time. Getting invested in the right ones is a great way to build your portfolio.