Is talk about exchange traded funds or ETF but before we dive in, I am not a financial adviser or giving any financial advice or giving any stock advice for the stock market, I just have to put that out there. So lets talk about a exchange traded funds or ETF and what is the easiest way someone can understand what this is.
An exchange traded funds or ETF is a bunch or investments or stocks that trades like a stocks on the stock market. Exchange traded funds can diversify your portfolio depending on the type ETF you pick. So this is how I tell people about exchange traded funds or ETF’s so they can understand very easy.
Lets say you go to Walmart and you go down the aisle where the oatmeal is. So with oatmeal there are different flavors of oatmeal like apple and cinnamon, maple and strawberry. If you buy the apple and cinnamon flavor, that is like buying a stock from one company on the stock market.
Now they also have the variety pack where you buy one box of oatmeal and get all the flavors at one time. So in the box you have apple and cinnamon and maple and strawberry in one box. This is just like an exchange traded funds or ETF. You buy one stock or exchange traded funds and you have a bunch of stocks in that one ETF that you own.
So think ETF or exchange traded funds is a stock with different stocks inside of the stocks which are called holdings. ETF will help with diversification and it’s a bit safer to invest in than a stock. If you own one stocks, if something happens to that company than that stock may go down. With an ETF if one of those holding or stocks go down, then you have other stocks to hold up the ETF is it is safer to me than a stock.
One of my favorite ETF is called global x funds Nasdaq 100 covered call ETF and the ticker symbol is QYLD. The top ten holding for this ETF is apple, Microsoft, amazon, tesla, Facebook, google, PayPal and Nvidia corp which will pretty much know most of these companies and we know how they make money. I don’t think these companies will go out of business no time soon but that is my opinion. Right now I own 52 shares and this ETF and this pays per month .22 cents. So right now I make about 11.70 per month from this ETF per month I have own it for the past 2 years now.
So this the easiest way one can understand exchange traded funds or ETF that can help people. In the video below I will go over the ETF QYLD and why I like it so much.
