For the uninitiated, the world of investing can feel a little bit like alphabet soup. One of the many acronyms you’ll need to familiarize yourself with as you dip your toe into things is ETF. Short for exchange-traded funds, ETFs can be a great choice for beginners because they allow you to buy into a portfolio of assets rather than just one stock or bond, offering instant diversification.

But ETFs are not only for beginners. In fact, “demand for exchange-traded funds continues to grow as investors seek lower-cost, tax-friendly options to meet their financial goals,” said CNBC . Here is what to know about them.

What are ETFs, and how do they work?

An ETF is a “basket of investments made up of assets such as stocks or bonds , which allows you to invest in many securities all at o

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