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Exchange Traded Funds ~ Getting Your Feet Wet

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Exchange Traded Funds since their invention back in 1993 have become the most popular items sold in the stock market while similar to a Mutual Fund; ETF's as they are known for short are extremely popular since they can be traded on any given day and generally have very low transaction fees associated with them unlike Mutual Funds.  They usually follow some type of Index like the Dow Jones Industrial Index, The Russell 5000 Index, Mid Cap US Index etc.   As of 2013 they are the most actively traded product as a whole.  Currently there are over 1.800 different types of products investing in everything from Gold, Real Estate (not to be confused with Real Estate Investment Trusts which is explained in an earlier article) household products and aviation.  We are going to focus on one.  We will actually place this in the dividend area of our portfolio but unlike our other investment choices the purchase is for the dividend and not the overall share price; we are looking to purchase this ETF because the share price continues to rise over time like a stock.  Some ETF's are actively managed like a Mutual Fund and others are passively maintained like the one we are going to look at.

WisdomTree U.S. SmallCap Earnings Fund

To large to dramatic?  I figured with a long winded name like that it needed it's own Ta-DA moment.  We will call this by its trading symbol on the New York Stock Exchange (NYSE) which is EES.

This fund follows the Wisdom Tree Small Cap Earnings Index by using a representative sampling (random stocks listed on Index) to create a mixture of companies that actually have shown a profitability in the last 4 quarters.  This EFT therefore doesn't take risks and bets on small companies that have a proven track record of profitablity.  This ETF was created in 2007 and the ETF share price has contnued to rise over time consecutively.  Another thing that makes this ETF attractive at this time is that the companies in the fund will benefit under the new Trump tax reform plan.  Currently it is trading as of today's close at $39.21 and pays a yearly dividend of $0.34 per EFT Share and pays quarterly.

This is a fund I want you to go look at on the website that you use to look up stock prices, I prefer www.CNBC.com and look at the ALL TIME chart, the 3 month chart and then the 1 year chart.  You can see this fund with the exception of the 2008 Financial crisis has continued to grow over time and also pays out a nice dividend for you. 

Time to get your feet wet if you haven't decided to look into any of the stocks we have featured in this blog previously.


Donations: Paypal: williamswallstreet@gmail.com this is meant for entertainment and educational purposes only investments and purchases are your choice and I always recommend speaking with a licensed financial advisor before making any investment decisions.  The author has no affiliation to any of the companies discussed in any article if a position is held in the future it will be disclosed in the given article.

 

 

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