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How to start an ETF with Alinea

By 
Eve Halimi

Investing remains to be one of the most surefire ways to achieve long-term financial freedom.

This is because unlike a salary, an investment allows you to grow your money at a compound rate; a crucial factor in realizing financial freedom faster.

This is why investing in areas like the stock market can be beneficial to helping you realize your financial goals. As it stands, one of the best securities in the stock market that investors are investing in is Exchange Traded Funds (ETFs).

So why are ETFs great investment holdings? They offer safe and diversified investing.

Low cost diversification is key

When it comes to investing, one important principle is to never put all your eggs in one basket.

As such, investors are always encouraged to diversify their interests in order to hedge against the risk of losing everything in one investment.

This is exactly why ETFs have become popular and why it is important to learn how to start an ETF. Being a collection of various securities ranging from bonds to stocks and commodities, an ETF allows you to diversify your investment portfolio to minimize risk and optimize benefits.

As compared to traditional investments, ETFs also offer a range of other benefits including low operating costs, trading flexibility, tax effectiveness, investing in a theme or sector and better levels of transparency. Therefore, if you are interested in ETFs, below is a comprehensive guide of how to start an ETF on Alinea Invest:

a)   Setup a brokerage account

The first step of starting to invest in an ETF or investing playlist is to have a brokerage account. Alinea Invest offers brokerage accounts on through its app services. This is because a brokerage account allows you to trade ETFs of your choice in the market. Therefore, take your time to select the best ETF broker that can offer you convenient account minimums, accurate trading insights, and the best customer support.

Due to the rising popularity of ETFs and the stiff competition between ETF brokerage platforms, many ETF brokers don’t charge fees on ETF trades. Therefore, you aren’t likely to experience affordability problems. In case you aren’t a very experienced investor, choose a platform that will provide you with accurate trading insights you can use to make the best ETF decisions.

b)   Choose the best investing playlists for you

Once you have settled on an ETF brokerage platform that you trust, the next step of how to start an ETF is to select the best Exchange-Traded Funds you want to invest in. This is because making an informed decision when selecting investing playlists is a critical determinant of ETF success or failure.

ETFs can either be actively or passively managed. Active ETFs enable investors to optimize their potential returns by executing trades when price fluctuations move in their favor.

On the other hand, passive ETFs do not particularly take advantage of sudden price fluctuations. However, passive ETFs provide investors with a convenient way of purchasing and holding positions until it is the right time to execute a trade.

Therefore, it is up to you to decide whether you want an active or a passive ETF. Once you make a decision, do some research to check out the best ETFs to invest in.

If you are a risk-averse beginner with limited funds to invest, you can consider low-cost ETFs like Vanguard S&P 500 ETF (VOO), Vanguard Russell 2000 ETF (VTWO), iShares Core S&P 500 ETF (IVV), Invesco QQQ Trust, and Schwab U.S Mid-Cap ETF (SCHM) among others.

c)    Monitor the performance of your investing playlists

The next step on how to start investing playlists after selecting the ETFs you are interested in is simple and straight-forward. If you select passive ETFs, you do not have to do much except monitor your ETF portfolio’s growth once in a while.

If you choose active ETFs, you can monitor your portfolio much more frequently as compared to passive ETFs. However, you must refrain from making any anxious, ill-informed trades due to sudden market movements.

Therefore, are you ready to take the next step in your financial freedom journey?

Follow this simple guide to creating investing playlists (mini personalized ETFs) with Alinea that will help you to benefit from the potentially lucrative trading of ETFs in the market.

(i) Disclaimer

The Content is for informational purposes only, you should not consider any such information or other material as investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by Alinea Invest or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction. When investing your capital is at risk. 

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