How Do You Use Exchange Traded Funds?
Exchange traded funds (ETFs) are investment vehicles that track the performance of some other security, index or commodity. They are traded on an exchange just like a stock, so investors can buy and sell them easily. Exchange traded funds also offer a low-cost alternative to direct investment in some of the securities they track. Invest in an ETF that tracks a commodity. For example, if you want to invest in precious metals, buy ETFs that track silver or gold. This will allow you to profit off of price moves in silver or gold without having to purchase the actual commodity. Also, the price of entry is reduced because typically one share of an ETF costs much less than the minimum investment in a commodity or commodity market. This translates to lower risk for the investor. Invest in an index ETF. Some exchange traded funds track an index of stocks. These are intended to mimic the performance of a certain sector. Sometimes the ETF is based on all the stocks in a sector; sometimes it is b
