Mutual funds & ETFs

You can diversify in multiple ways:

• Assets like stocks, bonds, and real estate

• Sectors like consumer goods, technology, energy, financials, etc

• Markets like domestic, international, emerging markets

If you are properly diversified, a downturn in one sector or market won't sink your whole portfolio.

• True

• False

Tools for diversification:

• Mutual Funds

• ETFs (Exchange Traded Funds)

• 2 to 5 stocks

The modern mutual fund was born in which year?

The first successful ETF was born in which year?

Match the following

• Mutual Funds

• Most ETFs are ___________

• ETFs

• Most mutual funds are _______

• passively managed

• Investors trade their shares directly from the fund provider

• actively managed

• Investors trade their shares from other investors, similar to how stocks trade on the market

Trades can happen at any point during the day-making them even more accessible and liquid to investors

• Mutual funds

• ETFs

Match the following

• Active managed

• Using analytical research, forecasts, and judgement to invest in specific stocks that will outperform the market

• Active managed mutual funds or ETFs

• High expense ratios (management fee)

• Passive managed mutual funds or ETFs

• Tracking the S&P 500 index, automatically giving exposure to all the stocks in the index

Warren Buffett said " The trick is not to pick the right company. The trick is to essentially buy all the big companies through the _________and to do it consistently." (That's why investing pros advise people to use low cost index funds)

Whichever option you choose, make sure you are:

• Minimizing costs

• Well-Diversified

• Investing for the long term