What is a Mutual Fund? Etf? Portfolio? - Young finances

Welcome back to Finance Fundamentals, where we talk about the building blocks of finance. What is a mutual fund? What is an ETF? What is a portfolio? Okay, three different topics, but really they're all the same, because a mutual fund is an ETF, is a portfolio. Well, a mutual fund is a basket of stocks, or a basket of assets. In some cases it could be bonds. An ETF is a basket of stocks, or in some cases it could be bonds. A portfolio is a basket of assets. It could be stocks. It could be bonds. It could be mutual funds. It could be a basket of ETFs. A portfolio is a way to bucket your investments. So if I have a portfolio that has mutual funds, ETFs, stocks. I could have some cash. I could have some bonds. My portfolio would be made of all of the assets that I have. It's going to be a little bit different than having an ETF, which is a pre-made portfolio. A mutual fund is a pre-made portfolio. So a portfolio is made up of assets, and so is an ETF. An ETF is basically an easier way for you to get access to a bucket, or a portfolio that's well diversified. The same way with a mutual fund. A mutual fund is going to give you a way to have access to a diversified portfolio. Let's talk a little bit about the difference between an ETF and a mutual fund. A mutual fund is traded once per day, usually at the end, or the closing of the market, while an ETF is traded throughout the day. So it trades like a stock. Typically, an ETF is going to have a lower price point threshold, so if you want to purchase one share, or one unit of an ETF, you can usually get in for 20 to 30 bucks, or on some ETFs maybe as high as $70, but you can find ETFs that are a little bit lower because they are similar to stocks. They trade like stocks, so they're going to have a lower price point so that more investors can get in. A mutual fund is usually going to have a minimum investment amount, so typically most mutual funds will have $1000 as their minimum investment amount. So, what do you think? Are you ready for mutual funds? Are you ready for ETFs? Are you still not sure what's going on here? If you want to learn more, you can always head over to YoungAdultFinances.com, and I actually have a really good post called "Mutual Funds Versus ETFs" which will give you a little bit more of the details between both. One place that I do my ETF investing is Betterment. I really like Betterment because they're a great broker for a diversified ETF portfolio. It's very simple, just set and forget. I make my deposits, and they purchase the ETFs for me, and create a diversified portfolio for me. So if you'd like more information on Betterment, if you'd like more information on mutual funds and ETFs, please head over to YoungAdultFinances.com/fund, and that will take you to the mutual fund versus ETF battle royale post. Thanks so much for listening. Take care.