ETF Investing for Beginners: Todd Sohn’s Food Label Analogy
Todd Sohn, ETF strategist at Strategas Asset Management, has a simple analogy for beginners to understand ETF investing. He suggests comparing an ETF’s contents to a food nutrition label. Just like you read the label to see what’s in your food, you should check an ETF’s holdings to see what it invests in. This gives you a better idea of its focus and where your money is going.
Sohn isn’t against investing in individual stocks, but he does emphasize the value of ETFs as a way to diversify your portfolio. He says that if a particular stock you’ve invested in hits a rough patch, an ETF can help balance things out.
