In the previous two posts, we focused on stocks and how they fit into an investment portfolio. But stocks are only one category of financial assets. There are many other instruments—more formally called securities —that investors use. In this post, we’ll look at three of the most common: ETFs, bonds, and derivatives. What Are ETFs? An ETF, or Exchange‑Traded Fund, is a fund that acts like a basket of stocks and trades on the open market. The key difference between an ETF and

Building a strong investment portfolio is one of the most important steps in long term investing. A portfolio is simply the collection of assets you own, and the way you structure it can have a major impact on your returns and your risk. In this post, we will look at what a portfolio is, why diversification matters, and how investors think about different portfolio structures. What Is a Portfolio? A portfolio is the group of investments you hold, usually a mix of stocks, ETFs

When people talk about investing, it can sound complicated, but the basic idea is simple. You are using your money to buy a small piece of a company. Every company’s stock is divided into a fixed number of shares, which are called outstanding shares. If you somehow bought every single share, you would own the entire company. When you invest, you are buying tiny ownership pieces of a business. That is all a share really represents. Two Ways People Analyze Stocks There are two