Stocks, ETFs and Mutual Funds - Quick Overview


A stock is a share issued by a public company that trades on the open market and can be bought and sold during trading hours on a typical business day. Owning a stock is owning a piece of that company.


With stock, there are two ways to make money:

1.       Dividends: money paid by the company to every shareholder of that stock.

2.       Selling the stock at a price higher than what you paid.


ETF (Exchange-Traded Funds) are groups of stocks packaged together and given a ticker symbol. An ETF trades on the open market during business hours, like a stock. A great example would be the Qs (ticker symbol QQQ), which trades on the NASDAQ. This ETF includes the top 30 NASDAQ companies packaged into one security.

Our advisors are licensed to buy portfolios that incorporate both stocks and ETFs. However, buying and selling individual stocks and ETFs brings significantly more risk. These particular investments could take a tumble and lose money even while the rest of the market is on the rise. If you decide to invest in an ETF or individual stock, it is important to remember to diversify - in other words: Don’t put all of your eggs in one basket.

A mutual fund is a group of stocks, managed by a professional fund manager. That fund manager chooses the individual investments for the portfolio.  The funds are raised by pooling smaller investments from thousands of investors like you and I, because putting together a diversified portfolio of stocks and ETFs can become expensive. We work with the best choices from over 100 mutual fund families with no obligation to work with any of them.

 At Beacon Financial Group, we have the experience to guide you and help you decide which instruments should be part of your portfolio. We help clients with all three types of investments.


Which instrument will you choose for your financial portfolio?


*The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by NPC. To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. Investment in stocks will fluctuate with changes in market conditions and indices are unmanaged measures of market conditions it is not possible to invest directly into an index.

*Diversification helps you spread risk throughout your portfolio, so investments that do poorly may be balanced by other that do relatively better. Neither diversification nor rebalancing can ensure a profit or protect against a loss.

*Mutual funds are sold by prospectus. Investors should read the prospectus carefully and consider the investment objectives, risks, charges, and expenses of each fund carefully before investing. The prospectus contains this and other information about the investment company. Please contact your representative or the investment company to obtain the prospectus.

*Example used as an illustration only, not indicative of any particular investment.