ETF's

Class Notes

• custodial account: co-owned stocks for minors
• Exchange traded funds (ETF's): trade on a stock and can be purchased or sold mutiple times on any given day.  There's usually a commission to buy or sell ($9.99).  However with Vanguard ETF's, purchased through a vanguard account there's no commission. 
•  Index funds = no commissions and you can't trade them multiple times within a day
• with these indexes (via vanguard) you need $3,000 for a standard index (for a minimal initial purchase) or $1,000 for a target retirement fund - a combination of US Index, International Index and Bond Index
• vanguard S+P 500 index fund ticker = VFINX
• same thing as ETF form = SPY
• vanguard total stock market index = VTSHX
• ETF equivalent = VTI
• lower the fees= the higher the probability of the fund doing well in the future
• World Stock Index: 
• 45% US stocks
• 45% 1st world international developed markets
• 10% emerging markets

Investopedia explains 'Exchange-Traded Fund - ETF'

Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does. By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order. 
Exchange-traded funds (ETFs) offer investors the ability to diversify over an entire sector or market segment in a single investment.

Exchange traded funds (ETFs) are open-ended investment funds listed and traded on a stock exchange. Your money is pooled with money from other investors and invested according to the ETF’s stated investment objective.

An ETF’s objective is to produce a return that tracks or replicates a specific index such as a stock or commodity index. ETFs are passively managed by ETF managers and do not try to outperform the underlying index. Hence, ETFs have fees and charges that are usually lower than those of actively managed investment funds. 

Types of ETF's:

Home Discussion:

After discussing my future project, my parents are excited and hopeful that I will start my own fund and be able to learn the tricks of the trade on my own.  However they are still unsure on which stock fund I should invest in, as am I.  They have actively managed stocks in Vanguard and my current plan is to invest in passively managed Vanguard stocks.  Now I just need to look into actually starting the investment, and setting up an account.   My finances are also still coming along as planned, but should spike shortly as I input my spring break costs into the formula.