Financial innovation has a checkered past. In 2008, thanks to financial innovation, the global economy nearly imploded.
A new wave of financial products added extreme leverage on top of another financial invention that should have never seen the light of day—the sub-prime mortgage.
The “brilliant” innovation behind sub-prime mortgages was lending money to people who shouldn’t be lent money… so they can buy houses in the middle of nowhere that should have never been built.
The entire banking system was engulfed. A market crash and deep recession followed. Lives were destroyed.
But not all financial innovations are bad.
When innovations make investing easier and cheaper—and use technology to solve real problems that real customers face—they can be great.
Instead of destroying hopes and dreams, financial innovations can help people achieve them.
Exchange Traded Funds (ETFs) have been a huge success… and for good reason.
ETFs trade like stocks but are really diversified funds that own many different stocks and potentially other assets.
Thanks to ETFs, individual investors—even those with maybe just a few thousand dollars to put to work—have access to a very easy and cost effective way to build diversified portfolios.
We just published a two part analysis of opportunities in the ETF market.
In Part I of ETFs to Start HODLING in 2025, we focus on core ETFs. These include some of the original ETFs that came to market back in the early 1990s.
Core ETFs include very low cost, highly diversified strategies that can provide investors with a solid foundation of broad stock market exposure.
Unfortunately, like any good idea, Wall Street will usually take it as far as it reasonably can… and then some.
There are now almost 5,000 ETFs trading in the U.S. with all kinds of convoluted strategies and objectives.
Many of them are gimmicky, expensive and deeply flawed. But some of these products are actually quite compelling.
In Part II, which you can access here, we take a look at a wide range of satellite ETFs.
Satellite ETFs, as the name implies, revolve around the core.
These ETFs give investors more targeted exposure to certain types of companies and investments—including asset classes other than stocks.
After establishing the core, investors have a number of very good options to use satellite ETFs to enhance and diversify their portfolios.
Find out which ones we think are best.
Click here to begin your subscription to the 76report starting at only $1 per month (use promo code DOLLAR) and get immediate access to these two valuable reports on investing in ETFs!
