Understanding investment types
Explore investment types
Investment options
What is a stock?
What is a bond?
What are cash investments?
Choosing between funds and individual securities
Finding individual stocks and bonds
Deciding on the mutual funds or ETFs you want
ETFs vs. mutual funds: A comparison
Get to know your investment costs
What are hybrid securities?
What are alternative investments?
What are call and put options?
Explore investment types
Understanding investment types
Explore investment types
Investment options What is a stock? What is a bond? What are cash investments? Choosing between funds and individual securities Finding individual stocks and bonds Deciding on the mutual funds or ETFs you want ETFs vs. mutual funds: A comparison Get to know your investment costs What are hybrid securities? What are alternative investments? What are call and put options?
Points to know
- Investing in ETFs or mutual funds can be less risky than investing in individual securities.
- You can complement the ETFs or mutual funds in your portfolio with specific stocks and bonds.
Funds or individual securities: Why does it matter?
Choosing specificstocksandbondscan be the most intimidating part of investing. How do you find the most promising investments? What if you're wrong—will you lose everything?
Fortunately, there's a solution to this problem: BuyETFs (exchange-traded funds)ormutual fundsinstead.
Both kinds of funds:
- Hold hundreds or thousands of stocks, bonds, or both, so you don't have to bet everything on one company.
- Allow you to build adiversifiedportfolioeven if you don't have hundreds of thousands of dollars to invest.
How do ETFs and mutual funds work?
ETFs and mutual funds are very similar, but they trade differently. Both types of funds either buy all the stocks or bonds in a specificindex(or at least a representative sample) or are run by professional managers who actively choose which stocks or bonds to buy based on research.
Learn more about index vs. actively managed funds
Either way, buyingsharesof a fund is a way to indirectly own the stocks or bonds owned by the fund.
For example, if you wanted to own stock in a company like Apple, you could buy Apple stock directly. Or you could buy an ETF or a mutual fund that owns Apple stock along with hundreds of other companies too.
Choosing your ETFs or mutual funds
No matter how involved you want to be in managing your portfolio, what segment of themarketyou want to invest in, or what type of investment strategy you want to follow, there are funds for you. Here's how to decide what to buy.
See how to decide on the mutual funds or ETFs you want
Adding individual securities
While we believe that most investors are best-served by taking advantage of the diversification offered by ETFs and mutual funds, there could be a place for individual stocks and bonds in your portfolio as well.
WATCH AND LEARN
Why invest in bonds through a fund?See how bond funds can offer benefits that go beyond diversification: the ability to get the best prices and better liquidity.
Individual bonds vs. bond fundsStream video and transcript
