EFTs track indices and other financial stocks traded on the stock exchanges. Before investing in the adventure index fund, you should ask yourself what goals you are pursuing with your investment and what type of investor you are.
Actively managed funds or trade yourself?
If you don't want to spend too much time on your investment, you can rely on actively managed funds. On the other hand, if you want to be active on the financial market yourself, start EFT trading with the broker of your choice.
What type of investor are you?
Investors can be divided into three groups:
- There are short-term investors who want to invest safely .
- The second group consists of nervous, patient and long-term investors who can withstand price fluctuations even if they move against them for a while.
- The third type of investor is flexible and independent and likes to invest in mixed funds.
Exchange traded ETFs
The advantage of exchange-traded ETFs is that you can keep this investment in your portfolio over the long term because they almost always reflect the market average.
What funds are there?
The funds are also divided into three groups.
- Special funds as presented https://thetradable.com, also called industry funds, track indices of individual industries and are suitable for investors who pursue a dividend strategy.
- Market- wide funds track a large number of indices from well-known companies. There are securities from different companies in the fund. These funds are popular because they represent a cross-section of the market-known industries and companies. They are launched by a large number of investors, including the mixed fund type. The costs of these market-wide funds are also very cheap.
- Managed funds form the third fund group. They are suitable for all investors who do not want to be actively involved in the investment process and therefore trust a fund manager.
Stock exchange tip for beginners: This type of fund is also well advised for investors who want to invest their assets sensibly but do not have sufficient knowledge of the financial market.
What are accumulation and distribution funds?
Investors should pay attention to whether funds are invested or distributed.
- Accumulating ETFs
Accumulating means that the income is not distributed to investors as a profit, but belongs to the fund's assets.
With the distribution of income, profits are distributed to investors. A broad investment strategy makes sense.
The ideal strategy is to invest in different fund classes that complement each other.