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Why ETFs Beat Individual Stocks
Posted By Ron On July 10, 2012 @ 6:25 AM In Exchange Traded Funds,Investing,Money | Comments Disabled
How would you like to invest [2] your hard-earned money in something that could give you similar returns to stocks while reducing your portfolio’s volatility and risk? An investment that helped you achieve your desired asset allocation AND diversify at the same time? Welcome to Exchange Traded Funds (ETFs).
Even though ETFs trade very similar to individual stocks, they have several advantages that distinguish from their riskier cousins:
Volatility is simply how much your investment’s value changes – up over a certain time period (usually a short time period). It’s what keeps many investors lying awake at night! Investments with big and frequent swings in price have higher volatility than investments with gradual, incremental value changes.