I was told to invest in ETF`s I have 1000 USD to invest, is this a good idea?, Which Etf is the best?
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I am also 21 also and just started. I chose to invest in the symbol VBK. It is a Vanguard Mutual Fund which tracks small businesses in a growth category. It will probably return around 15% a year. What I am planning to do is invest in it about 10% of my salary a year. So lets say I made 50,000 I would put in 5,000. Lets say I do this for 30 years. This is going to give me about 170,000 with about 20 grand of that being in interest. That was just an example as I am going to keep the money in for much longer than that and probably put more into it. My goal is to save enough to buy a house in the mountains or on the beach when I finally retire.
But enough rambling by me. If you invest in ETFs that track an index you are virtually assured of having a low risk investment. Good examples of index ETFs are S&P 500 (SPY), Dow (DIA), Small Business Growth (VBK), Worldwide Markets (not U.S. but emerging markets (VWO) which is another one I am looking at because of the declining value of the U.S. dollar and U.S. savings rate, and even Water (PHO).
I like the fact that ETFs are sort of like IRAs because you only pay taxes on capital gains when you cash out. With a mutual fund, every time there is turnover (the fund manager buys a new asset) they are going to be taxed for capital gains, so this dampens the compund interest you would be getting. Also some mutual funds require a certain amount of money and can be quite a hassle to work with if you want to invest in intervals and not all at once. I use an online broker and its very low comission ($7) for stocks so I end up making out like a bandit.
First off, are you sure you know exactly what an ETF is??
ETF (Exchange Traded Funds) they are a mutual fund that you can trade like a stock.
They can be risky, just like any investment. With it being just like mutual fund, you will be paying a fund manager to make the choices for you. Since they can be traded at anytime the market is open, the price can fluctuate quite quickly.
My career is primarily retirement investing so I generally talk to people are looking for that long-term investment. So, this answer Im giving is based on that you are beginner investor. Took a look at Mutual Funds as a long term investment with the lower risk you are looking for. (Mutual Funds also are not always a boring investment, take a look at some Latin American funds, some have 60% returns in one year) Mutual Funds are easy to invest in, let a fund manager make the company choices for you.
Last note, think about Retirement Date Funds. These RDF's aggressive level are based on your age and your supposed retirement year (at age 65) These funds are for the investor who does not want to keep tabs on their investments too much and let the manager make the changes for you. For example T. Rowe Prices Retirement Date Funds or Fidelity Freedom Funds.
Always read up on any investment you choose. Make sure it is right for you. Never take any "hot tips" from people on the internet. If it is so "hot", why are they just blabbing it out, unless they want you to buy and pump up the price so they can sell out.
An ETF in the wrong industry will still lose you money.
Pick an industry you know will be around in 50 years, will only be bigger and more profitable.
As China and India rise, resources that are limitted will continue to rise in price. I'm really betting on resources being HUGE. 1/3 of the world is represented by China and India. When they all want to start buying things, the prices of our limitted resources are sure to rise.
Another interesting area is the internet, finance, and technology. You have to be careful with it all. An ETF is basically investing in a bunch of companies from a particular industry, so you aren't really investing in a particular company, but the industry.
1) Yes.
2) DIA
3) I don't know if you have $1,000.00 USD to invest.
4) Yes.
I suggest you to open your brokerage account at Zecco
I suggest you to buy at least one share each week.
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Good Luck and Best Wishes!
please don't invest because somebody told you, you must understand about the investment. i think you can do courses and buy investing books first.
remember : if you have the money but don't know where to invest, please invest in education first .
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