Chapter 1. Exchange-Traded Funds (ETFs): Now Individuals Can Invest Like the Big Players

Exchange-traded funds (ETFs) are one of the fastest-growing investments in the United States. Their rapid growth is all the more remarkable because, unlike mutual funds, ETFs do not pay sales loads to financial intermediaries. Advisors who recommend ETFs rarely have financial incentive to do so.

ETFs are a powerful investment tool. However, before you use them, you should understand how they work and what makes them different from other mutual funds. This chapter introduces you to ETFs but only begins to discuss why you should use them. Chapter 2, “The Multifaceted Stock Market,” completes the presentation of the background necessary for you to fully appreciate ...

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