Are ETFs a good cushion for you?

Given the ongoing global banking crisis, stock volatility will prevail in the near future. Markets will try to bounce back on every single good news coming from governments. Yet, no one knows how long it will take to return to the previous form.

ETFs are gaining popularity as a way to cushion the bank-turmoil effect.?

ETF’s (Exchange-Traded Funds) are?a basket of assets designed to track an index with low management fees and higher intraday price visibility.

ETFs are made up of multiple assets so they provide investors instant diversification: when an investor purchases a share of an ETF, his/her money is spread across different investments.?

VettaFi ’s head of research, Todd Rosenbluth, told CNBC this investment trend applies to ETFs holding only a few large companies in particular industries. Such trend is “a complement to a broader S&P 500 strategy.” .

Most ETFs are passively managed investments that typically mimic a market index like the S&P 500 . On the other hand, Mutual funds want to beat the market’s performance, therefore are managed by a fund manager who’s actively looking for the best opportunities but naturally will charge higher fees.

According to Nasdaq , cash and short-dated fixed income might play a greater role in adding stability to a portfolio

Companies that have the willingness and ability to pay and grow their dividend over time are called dividend aristocrats.?These are top-quality dividend-payers—often regarded as ideal picks for novice dividend investors.

Officially, the Dividend Aristocrats are members of the S&P 500 Dividend Aristocrats Index and have an additional requirement of delivering increasing dividends every year, for at least 25 years.?(!!!!)

Investors use the word "quality" to describe good stocks, but generally speaking, a quality stock means "predictability".

As described on the official?index factsheet , S&P 500 companies must meet thresholds for size, profitability and liquidity. Specifically:

• Size:?S&P 500 companies must have an unadjusted market capitalization of $14.6 billion or more.
• Profitability:?S&P 500 companies must have been profitable in the most recent quarter and most four quarters in aggregate.
• Liquidity:?The minimum trading activity for S&P 500 stocks is 250,000 shares monthly in the six months before the evaluation date. (Aristocrats additionally must have an average daily value traded of $5 million or more for three months prior to the index's rebalancing date.)

I don't mean to give you financial advice but I strongly advise you to do your own research and look for available options in the markets. There are numerous reliable sources such as the Nasdaq and you can quite easily find investment alternatives that will provide a steady profitability, without the stress and the risk of a day trading life.