Now that it’s easier than ever to trade stocks and crypto thanks to apps like Robinhood and Etrade, it’s time to think about other options. People were quick to jump on the crypto bandwagon when Doge went to the moon in early to mid-2021, but the crypto crash later that year reminded everyone what an unsafe investment it really is. For those looking to diversify their investment portfolio, there are options beyond the new-school cryptocurrencies, or the traditional stocks and bonds. Keep reading to learn about exchange-traded funds or ETFs.
To put it as simply as possible, an exchange-traded fund is like taking a specific type of investment, say a commodity like gold, and collecting it together in a single group. Instead of buying gold on your own, you can invest in shares of a gold ETF. But why would you want to do that? Well, gold is expensive. To buy a meaningful amount you’d need to invest thousands of dollars. Not to mention you’d now have giant bars of gold lying around your house. You need far less capital to invest in an ETF. (And you don’t have a hoard of gold in your basement like some kind of dragon.)
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