The Motley Fool: Spiders And Zeroes

Investors who own Spiders own bits of all the companies in the index, such as Intel, Hasbro, CVS Caremark, Estee Lauder, Gap, Kellogg, MetLife, Pfizer, Nike, Staples, UnitedHealth and Tractor Supply. Unlike index funds, which work much like traditional mutual funds, Spiders are "exchange-traded funds" (ETFs), structured like shares of stock, with the ticker symbol "SPY." While mutual funds sometimes require minimum investments of thousands of dollars, you can buy and sell as little as one Spider share (recent price: near $200) at a time. With a zero-coupon bond, you collect no interest payments, but the amount you lend is less than the amount you'll receive at maturity. [...] a zero-coupon bond might pay you the equivalent of 5 percent per year by having you lend $6,139 today in order to receive $10,000 in 10 years. If the market plunges before you retire and shrinks your nest egg, your withdrawals will be small.

Topics:  spy.   intel   hasbro   cvs caremark   estee lauder   gap   kellogg   metlife   pfizer   nike   staples   unitedhealth   tractor   supply   etfs   investors   rite aid   foods   spiders   if   to   funds   sell   inflation   index   bond   portfolio   lend   companies   amount   receive   pay   withdrawals   shares   mutual   growth   zero-coupon   
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