This is the ultimate beginner’s guide on how to invest in ETFs (exchange-traded funds). I go through step-by-step and talk about all the important factors you need to consider when investing in ETFs such as diversification, fund overlap, correlation, dividends and DRIP, and more.
Websites from video:
⮕ ETF Database:
⮕ ETF Research Center (Fund Overlap Tool):
⮕ ETF Correlation Site:
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Investing in ETFs (Exchange-Traded Funds) has gained significant popularity among investors in recent years. These funds offer a diversified and low-cost investment option, making them an attractive choice for both beginners and experienced investors. If you’re looking to invest in ETFs and want to understand the ultimate guide, here are some key points to consider.
1. What are ETFs?
ETFs are investment funds that trade on stock exchanges, just like individual stocks. They are designed to track the performance of a specific index, sector, commodity, or asset class. ETFs are made up of a basket of securities, like stocks, bonds, or other assets, providing instant diversification.
2. Types of ETFs
There are various types of ETFs available, catering to different investment strategies and objectives. Some common types include equity ETFs (tracking stock market indices), bond ETFs (tracking fixed-income securities), sector ETFs (focusing on specific industries), commodity ETFs (tracking commodities like gold or oil), and international ETFs (investing in foreign markets). Choose the ETF type that aligns with your investment goals.
3. How to Invest in ETFs
a. Open a brokerage account: To invest in ETFs, you’ll need a brokerage account. Research and compare different brokerage firms to find one that offers low fees, user-friendly platforms, and a wide selection of ETFs.
b. Determine your investment goals: Define your investment objectives, such as long-term growth, income generation, or asset preservation. This will help you identify the appropriate ETFs for your portfolio.
c. Research and select ETFs: Thoroughly research the available ETF options. Analyze the underlying index or asset class, historical performance, expense ratio, and fund manager’s track record. Look for ETFs with a low expense ratio and sufficient liquidity.
d. Build a diversified portfolio: Diversification is crucial to minimize risk. Invest in a mix of ETFs from different asset classes, sectors, and regions. Consider your risk tolerance and time horizon when allocating assets across various ETFs.
e. Execute the trade: Once you’ve selected your ETFs, place the trade through your brokerage account. Specify the number of shares you want to purchase and the price at which you’re willing to buy. Monitor your investments regularly and make adjustments if needed.
4. Benefits of ETFs
ETFs offer several benefits, including:
a. Diversification: ETFs provide exposure to a wide range of assets, reducing the risk associated with holding individual stocks or bonds.
b. Liquidity: ETFs can be bought or sold on stock exchanges throughout the trading day, offering flexibility and ease of access.
c. Transparency: ETFs disclose their holdings daily, allowing investors to know exactly what assets they hold.
d. Cost-efficiency: ETFs have relatively low expense ratios compared to mutual funds, making them a cost-effective investment option.
e. Tax efficiency: Due to the creation and redemption process, ETFs generally have fewer taxable events than mutual funds.
5. Risks to Consider
While ETFs come with numerous benefits, it’s essential to be aware of the potential risks, such as:
a. Market risk: ETFs are still subject to market fluctuations. If the underlying index or asset class performs poorly, the ETF’s value will decrease.
b. Tracking error: Some ETFs may have a tracking error, which means their performance may deviate from the index they aim to replicate.
c. Liquidity risk: Lower-volume ETFs can have wider spreads between buy and sell prices, potentially leading to higher trading costs.
d. Closure risk: ETF issuers can decide to close down certain ETFs if they are not popular or become economically unviable. This may result in the need to sell the ETF before planned, potentially incurring capital gains or losses.
In conclusion, investing in ETFs provides a convenient and diversified way to grow your portfolio. By understanding the types of ETFs available, conducting thorough research, building a diversified portfolio, and assessing the associated risks, you can make informed investment decisions. Remember to regularly review and rebalance your ETF holdings to ensure they align with your long-term investment goals.
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Great video you gain a follower thanks for that great info.
What up with the camera sway?
Wow fast and furious but very good advice as a beginner in ETFs
Great info. Plus the links ,very helpful, great job!
Wow, that was a very well done video! Crystal clear even for a newbie, and entertaining, too! Thank you, Joshua. I now feel ready to begin my investment journey.
Need mutual fund list
Im not into eft at all
But that website was very helpful thank you
Tsly. , aply , amzy. Gooy. Return of dividends is insane
Given the current economic difficulties that the country is experiencing in 2023, how can we enhance our earnings during this period of adjustment? I cannot let my $680k savings vanish after putting in so much effort to accumulate them.
I began my investment journey at the age of 33, primarily through hard work and dedication. Now at the age of 38, I am thrilled to share that my passive income exceeded $100k in a single month for the first time. This success reinforces the importance of the advice mentioned earlier. It is not about achieving quick wealth, but rather ensuring long-term financial prosperity
I count myself successful in trading with the help of my broker who manage and handle my trading account and get me awesome profits. Her strategies are top notch coupled with the little commission she charge on her trade.
A number of the most eminent market experts have been expressing their views on the severity of the impending economic downturn and the extent to which equities might plummet. This is because the economy is heading towards a recession and inflation is persistently above the Federal Reserve's 2% target. As I'm aiming to create a portfolio worth no less than $850,000 before I turn 65, I would appreciate any advice on potential investments.
It's difficult to take the advice of any channel so loaded with bots in the comments honestly.
Thank you the very few minutes of this video had so much value..
My spouse and I are adding a variety of stocks/ETF to my present holdings for the long term, We've set aside $250k to start following inflation-indexed bonds and stocks of companies with solid cash flows, I believe it is a good time to capitalize on the market for long-term gains, but it wouldn't hurt to know means of actualizing short term profit.
Of all the videos I have watch on YouTube on this subject. They have been good, but wow, not as good as yours. This was so informative. Thank you so much. God bless you.
"Imagine you're in your fifties, nearing retirement…"
Me, living in a country where retirement age is 67: tries to hold back tears
I really appreciate the dedication in each video you post. Despite the dip in crypto, I still thank you for the level-headed financial advice. I started crypto investment with $4,345 and since following you for few weeks now, I’ve gotten $18,539 in my portfolio. Thanks so much Mrs Sarah Williams .
You're a legend ma man. Just started looking onto investment and this is exactly is what I needed.
You got my subscription for this. Amd a big thank you for the tools links. I was gonna ask for it but seen you already put it. Big ❤s for that.
Successful investing/trading is hard work because it means disciplining your mind to do the opposite of human nature. Buying during a panic, selling during euphoria, and holding on when you are bored and just craving a little action. Investing is 5% intellect and 95% temperament.
Thank you so much, very good content!!!
Putting well-earned money into the ETFS can be over emphasized for first-time investors, unlike a bank where interest is sure thing! Well, basically times are uncertain, the market is out of control, and banks are gradually failing. I am working on a ballpark estimate of $5M for retirement, and I have a good 6-figure loaded up for this, could there be any opportunity for a boomer like me? I'm nearly 60.
Dude.
Thank you!!!!
I can't express that enough.
<<I started investing when I was 57, mostly through sweat equity. I just turned 62 and this last month was the first time that my passive income broke €500k for the month. This is solid advice! DO IT!
I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Mrs Katherine Flores.
In the UK, we tend to only call teachers Sir (or Miss), but Sir Joshua, you are an amazing teacher! Not only on this, but your channel is a breath of fresh air in an otherwise saturated and somewhat stagnant YouTube area. Many make bold claims, but you back them up with your own experiences. Thank you for sharing your knowledge!
My portfolio has good companies, however it has been stalling this year. I’ve approximately $700k stagnant in my reserve that needs growth, any suggestions to grow my portfolio will be highly appreciated.
Great video overall about ETFs BUT he did not explain further about the "spend" or "risk" u need to make if u invest in ETFs. S&P everyday is going down now since last year, buy when the stock is really really really cheap. Only invest if u see this as long term to help u build "future" savings, compunded while u sleep. This is a passive income only if u buy stocks that generate high growth so analyze the stocks first before buying. U also need to hv the extra "money" on the side to make this investment because u need to 1) invest money to buy stock, 2) pay for the transaction fee 3) pay commission fee 4)when u buy stock and u make profit and u sell the stock, u also need to pay withdrawal fee (so make ur own calculation for a period of time, look at the average growth of the stock, learn more about the hidden fees as well guys thats my 2cent advise)
Hello, Joshua. While I'm excited about what ETFs can do for your in the long term. I'm really interested in investing in stocks that pay monthly dividends. My goal is to increase my monthly income to where I can retire me and my wife. My question is, can I still do this without putting these earnings into a Roth IRA?
etf databse website is offline now right?
The only video this long in my life I watched to the end. Good job!
Nice insight! Big fan of your channel, I Retired with a seven-figure portfolio and i'm receiving around $169,500 in dividends yearly. I've been investing in stocks for nearly ten years. Passive income is likely one of the most essential and central ways millionaires accumulate wealth. I started putting money into ETFs and other stocks last year, 2k weekly to be precise and my ETF portfolio has risen to 190k since i started january last year, whereas what I have invested is 48k. I'm grateful for my broker James Fletcher Brennan, who handles all of my investments and ensures I stay above the market.
The truth is that everybody wants to be financially independent and live a better life. With savvy investing, an inexpensive lifestyle, and diligent budgeting, this is not difficult to do. I'm glad I realized early on that achieving financial freedom requires hard work.
I think it is more likely for BTC, ETH, to retest the resistance to the upside and then move lower. But as always, things change on a daily basis and all we can do is to trade responsibly and keep track of the markets and re-evaluate our strategies frequently. I want to thank you Mrs Katerina. For being my source of crypto education, As I am comfortably making 29. BTC With just 11.3btc I'm so glad i made the right decision after 5 years of holding.
Best ETF video I have ever watched
Learn how to trade with MACD….and combine with Heiken ashi candles or you will crash and burn
with the next correction or crash …and yes…there will be one where you can lose up to 50% of your money.
Thank you so much for this detailed and informative video. I’m in my early 40’s and feel like I’m super late to this whole ETF game. Your video has given me the confidence to get out there a buy my first ETF, knowing what I need to look at. Thanks again.
With all this scary news making the headlines, is this really a good time to buy stocks? I know everyone says the mrkt is ripe enough for buying but will stocks tank further this year? How long until a full stock recovery? How are other people in this mrkt raking in over $250k gains within months, I'm really just confused at this point.
amazing video ,many thanks!
i keep some uninvested cash in my brokerage and also keep all my dividend yields in there too because of a 4.65% APY is this a good or bad idea ? should i stop paying for the APY and just reinvest the dividends ?
Great video. I went in this with some knowledge about ETFs and trading and I’m just learning and learning
I understand that etf commission is very high so I use the direct debit long term approach to mitigate the trade costs, when I want to sell these etf how do I avoid the high commission currently I have a lifetime ISA and a stocks and shares isa thanks
I have a 3 fund portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and TSM overlap too much to make sense holding both? However I’ve been in the red for a month now. I work hard for my money, so investing is making me a nervous sad wreck. I don’t know if I should sell everything, sit and just wait but watching my portfolio of $450k dwindle away is such an eye -sore.