Investing For Canadians All-in-One For Dummies

Chapter 4

Investing in Canadian Exchange-Traded Funds

IN THIS CHAPTER

Seeing similarities and differences in ETFs and mutual funds

Picking a bullish or bearish ETF

Getting the basics of indexes

When it comes to stock investing, there’s more than one way to do it. Buying stocks directly is good; sometimes, buying stocks indirectly is equally good (or even better) — especially if you’re risk averse. Buying a great stock is every stock investor’s dream, but sometimes you face investing environments that make finding a winning stock a hazardous pursuit. Prudent stock investors should consider adding Canadian and U.S. exchange-traded funds (ETFs) to their wealth-building arsenal.

An exchange-traded fund (ETF) is basically a mutual fund that invests in a fixed basket of securities but with a few twists. This chapter shows you how ETFs are similar to (and different from) mutual funds, provides some pointers on picking ETFs, and notes the fundamentals of stock indexes (which are connected to ETFs).

Comparing Exchange-Traded Funds and Mutual Funds

For many folks and for many years, the only choice besides investing directly in stocks was to invest indirectly through mutual funds (the ...