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Monday, December 28, 2009

What Exactly Is ETF Trend Trading And How Will It Benefit Me?

By Patrick Deaton

There are a lot of people that are beginning to show an immense amount of attention to etf trend trading. However, before you can get involved in this means of training yourself, it is imperative that you have a firm understanding of what etf's are and exactly what you need to do to begin the trading process with them.

ETF is an abbreviation for the funds original name which is exchange traded fund. These funds are openly traded on all the different stock exchanges (so they are not exactly new to the investment game). A lot of people choose to compare these funds to stocks.

These funds hold assets in the same way stocks or bonds and trades do, and can be traded at the same price as the net value of its assets throughout a normal day. Often times these funds are indexed using an s&p 500 or something of the sort.

A lot of people that are looking for an inexpensive means to trade on the stock market are extremely interested in these funds. More and more people are rushing to obtain an etf because of the low amount that you need to put down in order to start your investment.

Etfs offer traders an undivided interest in a pool of different securities. Many people have actually compared these funds to mutual funds because of how they are traded on the market. As many people have a knowledge base that surrounds mutual funds you can probably understand why these funds are becoming so popular.

The funds can be bought and sold anytime throughout the day. This gives you trading diversity, since there is no designated time that you have to trade your funds. In order to understand why an etf is a smart investment, you need to take a look at some of the funds advantages.

You can purchase an etf for a lot lower than you would for a normal stock or a mutual fund. Most mutual funds require that you put down a large amount. In fact, many of the mutual funds that people are opting to open state that you need to at least have $1500 in the fund at all times.

You can easily open an etf for as little as one hundred dollars, if that is all you have to get started with for the investment. As you probably know the more money that you put into the fund the more you can expect the fund to generate. So, try to make it imperative that you keep adding a little more to your etf every single month.

Just think how much etf trading can benefit your investment portfolio. It will show other investors that you have taken a chance and have experience in diversified trading of assets.

Another great attribute about the funds is the fact that you will always be aware of how much money your fund is generating. In fact, you can check on the amount of money that you have in your fund at your own leisure throughout your day. - 23196

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