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How do ETFs fit into your approach? Can they be next-gen, too?

By Matt McCallApr 21, 2017


ETFs are a favorite tool of mine and fit right into my strategy. One of the hallmarks of next-gen investing is a multifaceted approach to making money, something Wall Street doesn’t offer. If you’re not familiar with ETFs (short for exchange-traded funds), they are great ways to play market trends because they give you exposure to multiple companies that are driving the action but don’t carry the same risk that can come from holding a single name.

Let me use the example of the Global X Social Media ETF (SOCL). In this ETF, social media’s biggest and most successful companies serve as its top 10 holdings, including Facebook (FB), Twitter (TWTR) and China-based Tencent (TCEHY). Not only does this give you instant diversification, it also gives you global exposure to a wide-ranging trend that you would not otherwise be able to get very easily. Tencent, for example, is not traded on U.S. exchanges, and it generated 17.5% gains in the first quarter of the year.

If you really want to get slick, you can buy an ETF and then invest in the strongest stock or two within that ETF as profit boosters. Stay tuned because I’ll talk more about that later on!

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