Q: I am interested in trading ETF stocks. Could tell me the best way to go about getting good information and training to do that?
A: Exchange-traded funds (ETFs) are a great to way invest in the stock market, especially for first-time investors. Similar to mutual funds, ETFs are a collection of investments such as stocks, bonds, commodities or real estate. However, ETFs are quickly gaining popularity over mutual funds because they hold a few key advantages such as tax efficiency, low expenses and flexibility.
If you’d like to invest in ETFs I recommend opening a brokerage account that lets you buy and sell ETFs for only a small transaction fee. TD Ameritrade (www.tdameritrade.com) is a great choice because they don’t charge a set up fee or annual maintenance fee. They only charge a small transaction fee of $9.99 per trade (subject to change). Because you will have to pay a transaction fee, you should consider investing in ETFs if you have at least $500 to invest. Otherwise the transactions costs may overshadow the benefits.
Once you’ve opened an account that lets you buy and sell ETFs, you need to decide which fund(s) to invest in. There are a number of different fund families that offer ETFs and I recommend starting your search with iShares. I like iShares because they have a very user-friendly website (www.ishares.com) that provides straightforward information about their funds. Their website also features an education center that includes on-demand presentations. To access these presentations and other educational information visit their website and click on the “Get Started” and “Education Center” tabs at the top of the page. This should provide the extra training you’re looking for.