Exchange-Traded Funds (ETFs) are a simple way to gain diversification. Unlike mutual funds, ETFs have flexible pricing.
**How ETFs work**
– ETFs hold baskets of securities.
– Offer instant diversification.
– Most follow indexes.
**Popular ETFs**
– Tracks the S&P 500.
– Technology-heavy exposure.
– Vanguard Total Stock Market ETF (VTI).
– Adds global growth.
**Benefits of ETFs**
– Ideal for long-term growth.
– Covers multiple sectors.
– Easy to buy and sell.
**Risks of ETFs**
– Not immune to downturns.
– Tracking error may occur.
– Over-diversification.
**Conclusion**
ETFs are a cornerstone of passive investing. With SPY, QQQ, VTI, and okta analysis EEM, investors build resilient portfolios.
