As the stock market and exchange traded funds (ETFs) start to pick up steam again, investors are becoming eager to dip their toes back in the water. No matter what investments pique your fancy, it is important to have a strategy in place.
It’s important to keep a few tidbits in mind when picking out a stock, according to InvestingFirstSteps.
Beat the market? A lot of investors are too focused on “hot tips” or phenomenal returns in certain stocks. It should be noted that even professional traders who are paid to track the stock markets rarely provide returns of 11% or more, on average. We follow a 200-day moving average to help guide us. You can read more about this strategy in The ETF Trend Following Playbook.
ETFs. ETFs are popular and easy to use. They’re transparent, meaning you know what’s in them at all times. They trade all day on an exchange, just like a stock. And, on average, they’re cheaper than mutual funds. ETFs seek to reflect returns on the underlying index such as the S&P 500, Dow Jones Industrials Average and NASDAQ Composite. The ETFs listed below are based on a major indexes in the United States – from this point, you can access commodities, currencies, specific sectors and much, much more.
- SPDRs S&P 500 (NYSEArca: SPY)
- Diamonds Trust (NYSEArca: DIA)