How You Can Benefit From Investing in ETF

Actually, Investing In ETF (Exchange Traded Fund)

Welcome toworldthe of Investment. As you may know, If you are fresh to ETF, it’s probably time you look into this as part of your investment portfolio. So, what is an ETF?

ETF can therefore describe as a Fund tradingMutuallike a stock. An ETF is an Index Fund that is listed on a stock exchange and trades can (you intraday acquire and trade it anytime of the day just like a stock).
Although there are some very vital differences between them, its’ simple to understand ETFs if you think of them like mutual funds.

But unlike mutual funds, which try to beat indexes like the S&P 500 each year, ETFs try to follow them.
In fact, For example, if the S&P 500 trades 10 percentwillhigher, the ETF that follows it also trade 10 percent higher. If the S&P 500 index by 12 percent lower, the ETF that follows it will also decline trades 12 percent.
In case you are not aware of what Mutual Fund is, in modern times let me define it for you as well. In fact from another perspective manyA Mutual Fund (also known as Unit Trust in Asia) is an investment vehicle that pools currency from , individual investors. Indeed, A expert fund manager then invests and manages , funds into a broad diversification of stocksthesebonds and other securities.

The main problem with Mutual Fund or Unit Confidence is that they tend to havehigh management fees and are very restricted in the way you can acquire or market them. Indeed, With the explosion of ETF over the last few years, I have personally decided not to bother with investing in Mutual Funds (Unit Trusts) anymore, except for some investment linked policies that I currently have partly for protection purpose.

Why did I propose that you should look into ETF as part of your investment portfolio in today context? Interestingly, As ETF is relatively new as compared to Mutual Funds, that also means that there is currently few investors with the necessary skill and knowledge investing in it, thus providing a vast opportunity for early investors in this investment arena.

Imagine that you are one of those early investors who have invested and profited from the rise of China or the boom of Mutual funds in their early stage? You as it turns out could be reaping a great return in your investment portfolio right immediately…

This will assist put things in perspective: Go back in the early 1970s, there were approximately 270 mutual funds in existence, with total assets of around $48 billion.
By 2006, the total number of mutual funds was approaching 7,000 … with total invested assets of more than $9.2 TRILLION!

Imagine you knew all the ins and outs of mutual fund trading go back in 1970, and were able to ride that trend for the past 30+ years.

I hope you do… Do you see that in ETF?

Ok, if about have interest you, let us talk I ETF right away…

IssuesWhoETFs?

Do you want to uncover a comprehensive list of ETF’s currently in the field?

A fairly comprehensive list is actually at Yahoo! Interestingly, Finance. If you go there, you’ll locate a section on ETFs under the “Investing” tab. Drill down using the left-hand menu until you get to “View ETFs.” It’s not necessarily 100% current, but again, it’s the finest resource in the internet right now.

For the most detailed information on ETFs you’ll want in modern times to go to the websites of the issuers of those ETFs. It’s worth noting that There ’ll uncover a lotyoumore information that will aid you identify ETFs that you’re comfortable buying.

Some of the major issuers include:

Barclays – iShares
StateInvestorsStreet Global – SPDRs (Spiders) and streetTRACKS
As you may know, Merril – HOLDRSsLynch
– , Rydex FinancialActuallyRydex ETFs
Vanguard Group – Vanguard ETFs (formerly known as VIPERs)
ProFunds – Inverse and leveraged ProShares ETFs
Bank ofonRecent York – BLDRS (based ADRs)

Some of the common ETFs:

Standard & Poors Depository Receipts, Series 1 ( SPDR): ( Ticker Symbol: SPY) A word about Ticker Symbols- Every stock ETF or Mutual Fund of Index has a ticker symbol assigned to it. For instance, the ticker symbol for “Citigroup” is C and the ticker symbol for “S& in modern times P Depository Receipts ( SPDR)” is SPY. Whenever you wish to trade a security, you have to type in the ticker symbol.
The SPDR (also known as SPIDER) is an ETF that tracks the effectiveness of the S&P 500 Index. They are listed on the American Stock Exchange (AMX) and you can acquire and sell them like the shares of any other firm.

The DIAMONDS Faith, Series 1theaims to observe the performance of Dow Jones Industrial Index. They are listed on the American Stock Exchange (AMX) and it can be easily be bought or sold like the shares of any other corporation.

Indeed, Go back in Singapore my country, buy you want to grow your cash at the same rate of the Straits Times Index, which measures the Singapore Stock industry, then you can if the STI ETF. You can purchase a minimum of 100 shares through any local broker. The STI ETFs are priced approximately 1/1000th of the STI Index. So from another perspective if STI is at22100, the STI ETF will be priced at $ .10/share. The wonderful thing about ETFS is that it also pays you cash Dividends of 3%-4% a year on top of the appreciation of the ETF’s post value.

Actually, Some Personal Recommendations:

If you have excess liquidity in cash after option aside 3-6 months emergency cash and have an investment horizon of 3-5 years, you may like to invest some of your spare in the STI ETF. I have been recommending buying of STI ETF since from another perspective it fell to 1600 level. Despite the fact that there may be some pullback of STI Index back to the 2000 level, you may like to accumulate the STI ETF upon any weakness or pullback in this particular STI ETF. With the upcoming 02 Integrated Resorts that would be opened for business by end of this year and proceed year, Singapore with a strong government and political stability is poising for a strong economic recovery in the next 3-5 years.

As you may know, Another ETF you may like to look into is Sector Oil Service the (SYM: OIH). From my previous journal on how US economy is evolving with inflation likely to creep in the near ahead, it can be deduced easily the direction of oil prices in the tomorrow and hence this particular ETF. Do and sum your take advantage of this trend more than ever .

Move forward, you may also like as it turns out to look into the Metals & Mining ETF (SYM: XME). The price is currently around in modern times $35 and this was the price back in 2006! Investment Guru Jim Roger had placed a lot of emphasis in commodities and I believe there must be a reason for him to do that. It’s worth noting that Sometimes, it pays just to follow the afterGuruyou have done your homework.

Summary

Actually, In summary, ETF is a great investment resource that you should not be missing out at this point of time where field is bruised after the credit crunch is in trend for a recovery in the continue fewandyears. The beauty of ETFs is that they let you allocate cash the from another perspective an institution does, that is, on a sector bywaysector basis. Interestingly, This used to be the Big Boy’s Game, but with ETF, small investor like us can afford to join in the game right away. As I always said, this crisis is once in a lifetime for you to make big tremendous gain in your investment portfolio, do not miss the boat this time, remember to any on accumulate weakness and stay invested in the move forward few years.

In my move forwardpost, I will share on how you can utilise OPTIONS to multiply the returns on your ETF investment, and how you can purchase at lower field price! Interestingly, Stay tuned and talk to you soon.