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Fundamentals of Exchange Traded Fund

AGORA 2013: What could EU do to fight youth unemployment?
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Elia Elenius, Finland/29/employed: "As Member states have different problems, the national parliaments are best positioned to fight youth unemployment. The EU should channel funds through national institutions and they will know their best."

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The Exchange Traded Fund (ETF) is generally treated as a type of investment fund with is usually traded on Stock Exchanges. The Exchange Traded Fund (ETF) contains monetary assets like stocks and bonds which are traded with its net asset value. Exchange Traded Funds (ETF) are the most sought after form of investment as it is less costly, its tax efficiency qualities etc. An Exchange Traded Fund (ETF) is considered to combine the valuation of a mutual fund that is capable of being sold after the trading day for the net asset value. An Exchange Traded Fund (ETF) acts just like a company that contains several assets and allows shareholders to have a share of the benefits of the assets. The shareholders get a share of the profits from Exchange Traded Fund (ETF) like dividends or interests and also receive a residual value if the fund of the ETF is liquidated. Exchange Traded Fund (ETF) being an index fund provides investor with a large window to view the stock exchange situations not only in a particular country but the stock exchange system worldwide on a real time basis with a lower costing structure unlike other investment options.

Apart from ETF Fundamentals which is also a port folio in itself, there are several guide books available which guides people to avail a long-term financial security at by helping them know of the various methods of investment and the returns each one can get. Books like Fail Safe Investing and several other have these concepts in them which are very simply stated conveying the message to the common people who are interested in investing. These texts advise the common people to diversify their investments of bonds, stocks, gold, cash etc to make sure they are financially safe. The writer also ensures that people owning such a type of diversified portfolio do not have to worry about global financial crisis like recession, inflation or deflation where the financial conditions of people usually deteriorate with major problems like unemployment, bankruptcy etc. Different aspects of the portfolio perform differently throughout the year and therefore equalizing the returns in spite of the variations in the financial market.

Several financial institutions and individual investors have adopted the strategies of this book and are said to have found the strategies very lucrative. During the period of recession in the year 2008, investors and brokers who had adopted this plan found it extremely lucrative as it could give good returns apart from the monetary terms. The book advises people to dividing their finances into four parts. They include 25% in Stocks which provides good returns during prosperity, 25% in bonds that gives returns during prosperity and deflation, 25% in money market funds and 25% in Gold which protects one’s financial condition during Inflation.

In comparison to pure stick portfolio the Permanent fund Portfolio is diversified strategy of investment which is a sometimes a sort of an investment idea for investors as one cannot always afford to invest in the four different parts of the portfolio. It is not always considered the ideal type of invest and cannot be made an Investment blueprint and followed blindly. No matter how you are investing and where you are investing, but you need to know the way of making the safe investing that entail you to have more profit.

This article has been written by Demmy Groves, who is associated with ETF Fundamentals for a long time. She has described here how to avail the long-term security through Fail Safe Investing , the book, which is essential prior to make any investments.

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