How is investing different than a savings account?
Saving is putting money away in a safe location, commonly a savings account, for use at a later time. Savings accounts are great ways to put your money away in a safe place for future needs. However, savings accounts have their limits. Most savings accounts pay very low interest rates, which means that the money you put in a savings account isn’t growing much. It might grow a little, but savings accounts are a way to keep your money safe, not a way to make your money grow.
Investing is participating in the market to buy and sell securities (for example: stocks, bonds, ETFs) in order to potentially make returns and earn dividends. There is more risk with investing than with saving, but the potential for rewards is also higher. Investing is more complex than saving (regulations, tax implications, etc), which is why Stash is simplifying the process.
Q. What does ETF stand for?
ETF stands for Exchange-Traded fund. Here is breakdown of that means. Exchange-Traded means you can buy and sell ETFs on public stock exchanges like the Nasdaq or the New York Stock Exchange. In this context, a fund is a bundle of assets, usually stocks, bonds and/or cash. These bundles of stocks, bonds, and cash usually…
Q. Do ETFs pay dividends?
It depends on the ETF! Some ETFs definitely do pay dividends. And just like companies decide when to pay dividends to investors, managers of ETFs decide when or if an ETF will pay dividends. Usually ETFs pay dividends depending on whether the companies within the fund are also paying dividends and if the prospectus (aka…
Q. Are ETFs safe?
Investing involves risk, even when investing with ETFs. Like other investments (stocks, bonds, mutual funds), ETFs are deemed “safer” or riskier depending on what is in the investment. Risk isn’t determined by the type of investment as much as it is determined by what is ‘under the hood’ of each investment. In the finance and…
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Now That’s What I Call an Investment! ETFs Explained
You may have heard that Exchange-Traded Funds are a great first investment. But what's an ETF? We use a helpful analogy to break it down.
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