ETFs Can Provide Some Other-Worldly Benefits To Investors
ETFs may sound like aliens from the "Star Wars" movies. But they're actually an increasingly popular investment that offers several potential benefits to investors. The acronym stands for exchange-traded fund. And if you don't already have ETFs in your portfolio, you might want to consider adding some to the mix.
ETFs are securities that normally track an index, such as the well-known Standard & Poor's (S&P) 500. They are traded on a public stock exchange, so prices fluctuate throughout each trading day. Because of this liquidity, and the fact that fees associated with the investment are typically reasonable, more investors are opting for ETFs.
Technically, the ETF owns underlying assets—such as stocks, bonds, commodities, or foreign currencies—and this ownership is divided into shares for investors. Therefore, you own the ETF's investments indirectly and your shares represent their market value.
What's more, ETFs let you diversify across a wide range of underlying investments, while providing investors with other advantages such as being able to buy short or on margin. And taxable gains aren't passed through to shareholders, although you will be taxed on any gains under the usual rules when you sell an ETF.
We can help you determine whether this investment "creature" is suitable for your situation.
© 2019. All Rights Reserved.
- Four Tax Strategies In Retirement
- How Now, Dow Jones Industrials?
- Foreign Intrigue In Estate Planning
- This Tax-Free Rollover Goes Right To Charity
- What Are The 3 R's Of Roth IRAs?
- Avoid This Installment Sale Trap
- If Estate Tax Repeal Is Enacted Soon, Will It Stick?
- "New and Improved" QSBS Tax Break
- Four Smart Tools For College Savings
- Tax Relief For Disaster-Area Losses
- 6 Ways To Close The Retirement Gap
- The myRa Is Cut Short, But Other Options Abound
- Lending Money? Watch Your Tax Step
- Why Aren't More Millennials Moving On Up And Out?
- Are You "Rich" Or Not? New Survey Hits The High Points
Investment Psychology Turns More Positive