My last article I wrote about index funds and ETFs. These vehicles make it easier to invest in a broader scope than purchasing individual stocks. I’ve been a long time individual stock investment type of person and I’ll still continue that. After doing some initial research into ETFs and index funds, I decided that I will start investing with my first ETF purchase.

An ETF is like an index fund except that it’s traded throughout the day like an individual stock. It will fluctuate throughout the day. You can purchase at the current price or on limit, exactly the same way as a stock. One of the reasons I decided to go with an ETF is because of diversity. Even though my stock portfolio is diversified with different investments in companies in different sectors, I’m still 100% stock. I want to diversify outside individual stocks which lead me to ETFs.

Index funds and ETFs are managed funds which means you could be paying a management fee. These are funds that someone else is taking care of. This is also called the expense ratio. The higher the expense ratio the higher it costs you to invest in them.

What ETF did I invest in? SCHD. This is an ETF with Schwab and it is a U.S. Dividend Equity ETF. Why did I go with SCHD? First, I like dividends. The current dividend yield is at 3.47% which isn’t bad. In addition, SCHD has had continued growth over the year.  I like the fact that this ETF invests in companies with high dividends such as Home Depot, Chevron, Lockheed Martin, and others. Strong companies with high dividends and a growing ETF value makes it appealing to invest in.

Because it is my first purchase, I only used available funds that I had so only a small quantity. Like I said, I want to diversify my portfolio to include ETFs and index funds so I plan to invest in them more frequently. This is what my first ETF purchase involved. SCHD is the ETF I went with for a few reasons: stable, dividend, and growth. As always, before purchasing anything do your research and do what is right and comfortable for you. If you are interested in following my journey and their journey, follow them on Instagram and email subscribe to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.