The Best Way to Invest in the Stock Market




Sanctions that don’t involve a redemption fee are of no serious concern. If a fund blocks you from investing again in the same fund for some time – that’s no problem; you can use another fund.

Categories of mutual funds and ETFs

There are, of course, a great many categories of mutual funds and ETFs. Before going into that, some terminology.



Capitalization

Capitalization refers to the value of a company. Large cap companies are companies that are worth a lot of money, while small cap companies are companies that have a relatively low total value. A mid cap company is somewhere in between.




Growth

A growth company is a companies whose stock price is relatively high compared to its earnings. This reflects the market’s expectation that the earning of this company will grow fast.



Value

A value company is a company whose share price is relatively low, when compared to its earnings. This would reflect the market’s expectation that the earnings of this company will grow at a slow pace or won’t grow.



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