ETF
An ETF is a single tradable share that holds a basket of many companies, so buying one gives you a slice of all of them.
Buy one share of an S&P 500 ETF and you own a tiny piece of 500 companies. It trades on the exchange like any stock, with a ticker and a live price.
For most people most of the time, this beats picking individual stocks — not because picking is impossible, but because it is hard enough that the average picker does worse than the basket after fees and mistakes.
In Stoxhatch
ETFs are searchable and tradable alongside stocks, and they are the fastest way to see how a diversified portfolio behaves differently from a concentrated one.
Related
- Diversification — Diversification is spreading your money across different companies and industries so one bad outcome cannot sink you.
- Share — A share is one unit of ownership in a company, so owning a share makes you a part-owner of the business.
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