Chapter 5

Stock Investing through Canadian Exchange-Traded Funds

In This Chapter

arrow Seeing similarities and differences in ETFs and mutual funds

arrow Picking a bullish or bearish ETF

arrow 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. In this chapter, we show you how ETFs are similar to (and different from) mutual funds, we provide some pointers on picking ETFs, and we note the fundamentals of stock indexes (which are connected to ETFs). If by the end of this chapter you feel you want to know more about ETFs, check out Exchange-Traded Funds For Canadians For Dummies by Russell Wild and Bryan Borzykowski ...

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