What is an ETF?
An ETF, or exchange-traded fund, is an investment fund that can hold many assets such as stocks or bonds.
Why ETFs are useful
Instead of buying individual companies one by one, an ETF can give exposure to a broad group of assets through a single investment.
Diversification
Diversification means spreading risk across different assets. ETFs are often used because they can make diversification easier.
Costs matter
Many ETFs have relatively low fees, but costs still matter over long periods because fees can reduce total returns.
Risk still exists
ETFs can lose value. They are not risk-free, especially when they track markets that move up and down.
Long-term mindset
Many investors use ETFs as part of a simple long-term strategy because they are easy to understand, diversified and accessible.
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