Exchange Traded Funds
ETFs for short, are made up of broad holdings of stocks or bonds. Often, these ETFs replicate an asset class or index like the S&P 500 or Dow Jones Industrial Average.
Asset classes represent certain categories or classes of stocks or bonds. Each ETF represents an asset class in your portfolio ranging from Large Companies to Real Estate.
Diversification is Key
When you invest in several different asset classes, it helps to smooth out any bumps when the market changes.