The development of ETF products in the US stock market is mature, covering index combinations, industry sectors, emerging markets, commodities, bonds, real estate, and even various leveraged and hedging operations can be carried out with small funds during trading hours. Now the ETF combinations in the US stock market are diverse, and can cover most of the market hot money flows. Therefore, even retail investors with less capital can now capture fund trends through ETFs, or lay out individual growth or defensive sectors to keep up with the uptrend or adopt hedging strategies.
What is an ETF?
ETF, the full name is "Exchange-traded Funds", which can be bought and sold by investors on various US stock broker and bank platforms during trading hours by entering relevant stock codes. The handling fees, trading taxes, and other individual stocks are the same, and can also be called "on-exchange funds".
Why do retail investors choose to invest in ETFs?
When individual investors choose between investing in ETFs and individual stocks, they face various considerations. These two investment methods have their own advantages and disadvantages, suitable for different investment strategies and risk tolerances.
ETFs usually track an index or a basket of stocks, so investing in an ETF is equivalent to indirectly investing in multiple companies. This significantly diversifies the risk of individual stocks. If one component stock performs poorly, its impact is offset by the performance of other component stocks. Investing in individual stocks means that investors concentrate all the risk on one company. If that company...