I figured out what I’m going to do with the $3000 interest free loan I got from the CITI bank MasterCard. I’m going to put it into an ETF. Buying ETFs don’t require me to go through all the hoops that the compliance has for buying stocks, so I don’t need to have permission to buy or sell ETFs. That’s good since I don’t want to be locked into a stock if it goes down because our company is trading it.
An ETF is different from a Mutual Fund in two key ways. First, it is traded on the stock exchange, so it is possible to short them, and buy/sell them quickly. Second, they don’t have very much overhead, in a mutual fund there’s usually a team of investors that are picking what they think are the best stocks, ETFs have no input from managers so their costs are low.
Buying an ETF gives me the ability to make a bet on a particular sector, region, or exchange. The ones that I’m currently looking at are a basic materials ETF (ticker symbol XLB), an EAFE (Europe,Australasia, and the Far East) fund (ticker symbol EFA) and a Canada ETF (ticker symbol EWC).