As i was looking what types of investing i can do and i was told that ETF is a great place to invest. Now i have 0 idea what ETF is and how it works, where should i go to invest is there a platform or through banks? And any other relevant information that may help me understand. Thank you guys in advance!
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Stock: Single company
Index: Collection of stocks fitting a criteria
Fund: Collection of many stocks for purchase as a single entity.
Index fund: A fund tracking an index
Mutual fund: A fund that is bought/sold at the end of the day.
ETF: A fund that is bought/sold throughout the day (well, during market hours).
Most brokers/sites don’t allow auto-investing (purchasing same amount every week/month) for ETFs, only mutual funds. ETFs however sometimes saves you a bit in money by not having to pay as much taxes (though this may be changing soon, and doesn’t matter in a retirement / tax-advantaged account). Some mutual funds also require a minimum investment.
VFIAX is Vangaurd’s mutual fund for the S&P 500, whereas VOO is their ETF version.
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