The performance of the money markets in 2022 was far from impressive. With inflation on the rise and real estate facing significant speculation, various markets experienced substantial setbacks. This includes the S&P 500, a typically used gauge of economic well-being, which saw a decline of 20%.

Among the fear and uncertainty, it's important to remember that markets ebb and flow and will recover, the only unknown is when this will happen.

While the golden rule is to remain level-headed and not make trades based on emotion (primarily fear), we understand that that's sometimes easier said than done. Remain a successful investor despite the market dip by conquering the emotional aspect of trading and getting a better grip on your investment portfolio.

You've assessed your risk tolerance, researched historical market volatility, and built an investing strategy, now tackle the winds of the bear market head-on with these three valuable tricks to avoid making costly mistakes. 

3 tips on avoiding costly mistakes during market downturn

Investing in the stock market, or any emerging markets is like riding a rollercoaster, when the markets are down the only ones that get hurt are the ones that jump off. It is often more valuable to hold your investment and wait for the markets to recover (and yes, this may take years) than to liquidate a trade and make a permanent loss. 

Consider how long the stock market has been operating and how many bear and bull markets it has experienced. The past performance of market history shows us that it will always correct itself.

1. Don’t abandon your investments

When your retirement account drops in value, it can be tempting to "protect" the remaining funds by selling off high-risk mutual funds or equity securities and moving them into something that is perceived as a "safe option" until the stock market steadies.

However, when investors try to exit the market this way, more often than not they end up losing more money than they would have had they ridden out the rollercoaster. 

Remember, investing is a long-term game and requires a certain level of discipline, consistency, and patience. Financial journeys rarely turn to millionaire status overnight and should be centered around building long-term wealth as opposed to overnight success.

Instead of focusing on day-to-day or month-to-month performances, focus on the bigger picture. When the markets rebound and your balances start to reflect this, you will be grateful you left your diversified portfolio intact.

2. Take advantage of the "discount" prices and keep growing your investment portfolio

According to a study by Allianz Life, 54% of Americans have cut back or altogether stopped savings for retirement due to concerns about inflation. While we know investing involves risk, this can be a very costly mistake in the long run. 

Consider periods of a market downturn as "sales" that offer shares on the stock market at discounted prices. When the markets are down, the same stocks that were previously being traded for high amounts are suddenly going for much less. "Buy the dip" is a popular investment phrase that encourages investors to buy when prices are down. 

If investing when the markets are down makes you nervous, consider the data: historically, stock markets always recover. It might take years or months, but stock prices will return to previous levels, and more than likely exceed these. As will your investment portfolio's balance. 

3. Consider talking to a professional financial advisor

While the main aim is to stick to the straight and narrow of fact-based trading as opposed to emotion-based, there is never a bad time to seek professional help when you think you might need it. A professional financial advisor can advise on questions or ideas you might have for managing your portfolio and might offer some peace of mind during dark times. 

There's never a wrong time to ask for help, and never feel like you need to brave the markets solo. 

Keep your investments on track (stock market and otherwise)

Investing isn't for the faint-hearted, especially when the markets are going through a dip. Consider the 2007 financial crisis for example, it took five years for the markets to recover from rock bottom, and a few more months to reach highs achieved right before the dip.

The markets will always recover, it's how you handle the dips that will determine the success of your investments. If you're ever uncertain, consider talking to a financial advisor who can guide you in the right direction.

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When it comes to investing, yield is a term that gets thrown around a lot. But what exactly is yield, and why does it matter? In its simplest form, yield refers to the income generated by an investment. It's a key metric that investors use to assess the performance of an investment, and it can be influenced by a range of factors.

Understanding yield is essential for anyone looking to build a successful investment portfolio. In this article, we'll explore what yield is, how to calculate yield, and why it's important. We'll also look at different types of yield. Whether you're a seasoned investor or just starting out, this article will provide you with the knowledge to help you make informed investment decisions.

What is yield? Understanding the basics

Simply put, yield refers to the income generated by an investment. It's typically expressed as a percentage of the investment's current value, and it can come in many forms, such as interest payments, dividends, or rental income.

Understanding yield is important for investors because it provides a way to compare different types of investments and assess their potential for generating income. For example, a bond with a higher yield may be more attractive to an investor than a similar bond with a lower yield, all else being equal.

Yield can be influenced by a range of factors, including market conditions, interest rates, and the type of investment being made. Different types of investments may have different types of yield as well, with some providing a fixed yield and others offering a variable yield.

By understanding the basics of yield, investors can make more informed decisions about where to put their money and how to build a successful investment portfolio.

The different types of yield

Yields can vary based on the invested security, the duration of investment, and the return amount. There are different types of yields for different types of investments.

Bond's yield

The yield on bonds that pay annual interest can be calculated using the nominal yield, which is calculated as the annual interest earned divided by the face value of the bond. However, a floating interest rate bond yields will change over the life of the bond depending on the applicable interest rate at different times. Floating interest rate bonds pay a variable interest over its tenure.

Similarly, the interest earned on an index-linked bond, which has its interest payments adjusted for an index, such as the Consumer Price Index (CPI) inflation index, will change as the fluctuations in the value of the index.

Yield on stocks

When investing in stocks, two types of yields are popularly used. The first is yield on cost (YOC), which is calculated based on the purchase price at the initial investment. This yield is calculated as the sum of the price increase and dividends paid divided by the purchase price. The second is the current yield, which is calculated based on the current market price of the stock.

Yield to maturity

Yield to maturity (YTM) is a special measure of the total return expected on a bond each year if the bond is held until maturity. It differs from nominal yield, which is usually calculated on a per-year basis and is subject to change with each passing year.

On the other hand, YTM is the yield expected per year and the value is expected to remain constant throughout the holding period until the maturity of the bond.

Yield to worst

The yield to worst (YTW) is a measure of the lowest potential yield that can be received on a bond without the possibility of the issuer defaulting. YTW indicates the worst-case scenario on the bond by calculating the return that would be received if the issuer uses provisions including prepayments, call back, or sinking funds.

This yield forms an important risk measure and ensures that certain income requirements will still be met even in the worst scenarios.

Yield to call

The yield to call (YTC) is a measure linked to a callable bond—a special category of bonds that can be redeemed by the issuer prior to its maturity—and YTC refers to the bond’s yield at the time of its call date.

Tax-equivalent yield

Municipal bonds, which are bonds issued by a state, municipality, or county to finance its capital expenditures and are mostly non-taxable, also have a tax-equivalent yield (TEY). TEY is the pretax yield that a taxable bond needs to have for its yield to be the same as that of a tax-free municipal bond, and it is determined by the investor's tax bracket.

Mutual fund yield

Mutual fund yield is used to represent the net income return of a mutual fund and is calculated by dividing the annual income distribution payment by the value of a mutual fund’s shares. It includes the income received through dividends and interest that was earned by the fund's portfolio during the given year.

The importance of yield in investing

Yield is a crucial metric for investors to consider when making investment decisions.

For income-seeking investors, yield is particularly important as it directly impacts their cash flow. High-yield investments can provide a steady stream of income to investors, allowing them to meet their financial goals and cover their expenses.

However, it's important to note that high yields can come with higher risks. Investors must carefully evaluate the underlying assets and the sustainability of the yield to ensure that it's not artificially inflated.

Overall, yield should be one of many factors investors consider when making investment decisions, but it's a crucial one for those seeking income.

Yield vs. return on an initial investment: what's the difference?

In investing, yield and return are both important metrics as they measure the performance of an investment, however, they have different meanings.

Return on investment (ROI) is a measure of the overall profitability of an investment over a given period of time, taking into account both capital gains and income rendered by the investment.

Yield, on the other hand, excludes capital gains and is specifically the income generated by an investment as a percentage of the investment's current value. Yield is often used to measure the income generated by fixed-income investments like bonds or dividend-paying stocks.

While yield and return are related, they can differ in certain situations. For example, if the value of an investment increases significantly, the yield may decrease even if the total return remains high. Alternatively, an investment with a low yield may have a high return if its value appreciates significantly.

Ultimately, investors should consider both yield and return when evaluating investments, but the importance of each metric will depend on the individual investor's goals and priorities.

How to calculate average yield

To calculate yield, you need to determine the return on investment for a given security or investment. The method used to calculate yield varies depending on the type of investment.
For stocks, the two most commonly used yields are the yield on cost and the current yield. 

Calculating yield on cost

The yield on cost is calculated based on the purchase price, price increase, and dividends paid. To calculate the yield on cost of an investment, you need to know the current annual income generated by the investment and the original cost of the investment. The formula for yield on cost is:

YOC = (Annual Income / Original Cost) x 100

For example, let's say you purchased a stock for $100 and it pays an annual dividend of $5. After one year, the yield on cost would be:

YOC = ($5 / $100) x 100 = 5%

This means that for every $100 you invested, you are earning a 5% return in annual income.

Yield on cost is particularly useful for investments that increase their dividend payments over time. As the annual income generated by the investment increases, the yield on cost will also increase, which can be a sign of a successful long-term investment.

Calculating current yield

The current yield is calculated based on the current market value, price increase, and dividends paid. 

The current yield is the annual income (interest or dividends) divided by the current market price of the security. It is calculated as follows:

Current Yield = Annual Income / Current Market Price
For example, suppose a bond with a face value of $1,000, a coupon rate of 5%, and a maturity of 10 years is currently trading at $950.

Annual income = $50 (5% coupon rate * $1,000 face value)

Current market price = $950

Current yield = $50 / $950 = 5.26%

The calculated yield value, therefore, is 5.26%.

In conclusion

What is yield? Yield is an essential term in investing that refers to the income generated by an investment, and it provides a way for investors to compare different types of investments and assess their potential for generating income. While a higher yield is generally preferable, investors must look at a range of other factors when determining whether it is a valuable investment or not.

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Ethereum Naming Service is a branch from the original blockchain network which aims to make the crypto space, particularly within the DeFi and Web3 sectors, more user-friendly and accessible. Similar to how Domain Name Service made the internet more accessible, Ethereum Name Service aims to do the same and become a fundamental component of these sectors.

What is Ethereum Name Service (ENS)?

Ethereum Name Service (ENS) is a decentralized naming system that simplifies sending and receiving payments in the Ethereum network. It works like a domain name service (DNS) uses IP addresses, but instead for Ethereum crypto addresses, allowing users to register human-readable names that are mapped to their Ethereum addresses. This makes it easier to remember and share addresses, instead of having to remember long strings of characters.

For example, a user could register the domain name "myname.eth" and associate it with their Ethereum wallet address. Once registered, anyone can send payments to "myname.eth" instead of the complicated Ethereum address.

Users can register a name through various ENS domain registrars or directly through the ENS manager. Once registered, the name is added to the Ethereum Name Service Registry, and the user becomes the owner of that name. ENS uses a hierarchical system of domains similar to the DNS system used for the internet. 

Once registered, the user can then set the resolver, which is a smart contract that provides information about the Ethereum wallet address associated with the ENS name.

The resolver can be thought of as a mapping function between the name and the Ethereum wallet address. When someone sends a payment to an ENS name, the resolver is queried to retrieve the associated Ethereum address. Once the Ethereum wallet address is retrieved, the payment can be sent directly to the address.

ENS also allows users to add additional data to their domain names, such as an IPFS hash or a swarm hash, making it possible to associate decentralized content with a domain name. For example, a user could associate an IPFS hash with their domain name, making it possible to access decentralized content using a human-readable name.

Who created Ethereum Name Service?

Ethereum Name Service (ENS) was initially part of the Ethereum Foundation and proposed by Nick Johnson in 2016 as a way to simplify the process of sending and receiving payments in the Ethereum network. Nick Johnson is a software engineer that previously worked at Google and the Ethereum Foundation. 

The ENS system was launched as a separate entity in May 2017 as a decentralized naming service on the Ethereum blockchain. Since its launch, ENS has been widely adopted by the Ethereum community and has become an essential part of the Ethereum ecosystem.

How does Ethereum Name Service work?

The Ethereum Name Service (ENS) system is similar to the DNS (Domain Name System) used on the internet. Users can register an ENS domain name under the .eth top-level domain and associate them with their Ethereum addresses by using the platform's smart contracts.

This means that instead of sending payments to complicated and hard-to-remember Ethereum crypto addresses, users can simply send payments to easy-to-remember domain names. For example, instead of sending funds to 0x71C7656EC7ab88b098defB751B7401B5f6d89, users can instead send funds to tap.eth. 

The system uses two smart contracts to make this possible: the registry and the resolver. 

ENS Registry

To use ENS, users must first register a name through a registrar. Registrars are entities that facilitate the registration of domain names under the .eth top-level domain and store all the domains. Once a user has registered a name, it is added to the ENS Registry, and the user becomes the owner of that name.

ENS Resolver

The next step is to set the resolver, which is a smart contract that provides information about the Ethereum address associated with the ENS domain. Resolvers can be set by the user or they can use one of the default resolvers provided by ENS. Once the resolver is set, users can associate their Ethereum crypto address with their ENS name. This is done by adding a record to the resolver that maps the ENS name to the wallet address.

ENS allows users to add additional data to their ENS domains, such as an IPFS hash or a swarm hash. ENS also supports subdomains, which are domains that are associated with a parent domain name. This makes it possible to create a hierarchical naming system that is similar to the DNS system used on the internet.

What is the ENS token?

The Ethereum Name Service (ENS) did not have its own token until recently. In 2021, the ENS team announced the launch of a new governance token called ENS, which is separate from the old ERC-20 token with the same name. 

The new ENS token is used for governance and voting purposes and is not used to pay for the registration or renewal of ENS domain names. Instead, users need to pay in ETH to register their “.eth” domains, with an idea of the costs reflected below (subject to change due to market fluctuations, please review the ENS website for accurate costs):

$5 in ETH per year, for a five+ character .eth ENS domain;

$160 in ETH per year, for a four-character .eth ENS domain;

$640 in ETH per year, for a three-character .eth ENS domain.

The higher prices are due to the supply of three- and four-character .eth names being smaller. 

The total supply of the new ENS token is 100 million, and they were distributed through a community airdrop in 2021.

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What is the ENS DAO?

The ENS DAO (Decentralized Autonomous Organization) is a community-governed organization that oversees the development and management of the Ethereum Name Service (ENS) ecosystem. It is responsible for making decisions about the future direction of the ENS system, including upgrades, changes to policies, and new feature development. The organisation is governed by the ENS token holders, who have the right to vote on proposals and decisions related to the ENS ecosystem.

The organization is an important part of the ENS ecosystem, as it ensures that the system is developed and managed in a decentralized and community-driven manner. It allows stakeholders to have a voice in the decision-making process and ensures that the system remains responsive to the needs of the community.

What is the ENS Foundation?

The Ethereum Name Service (ENS) Foundation is a non-profit organization that supports the development and growth of the ENS ecosystem. It oversees the development of the ENS system, promotes its adoption, and provides support to users and developers.

The ENS Foundation is involved in a wide range of activities related to the ENS ecosystem, including organizing community events, providing guidance, and funding the ongoing development of the ENS system. It plays a critical role in supporting the growth and development of the ecosystem alongside the ENS DAO, which is responsible for making decisions about the future direction of the ENS system.

How can I buy ENS tokens?

Tap's mobile app enables users to easily acquire, trade and securely store Ethereum Name Service (ENS) in an integrated wallet. Users can buy and sell the ENS token using a variety of supported crypto or fiat currencies. The app also provides a reliable space to store ENS tokens and other digital assets. By downloading the Tap mobile app, users can unlock the potential of a range of cryptocurrencies and fiat wallets.

Tap, today announced the appointment of Kriyakant "Kriya" Patel as a Chief executive officer.

Kriya possesses a wealth of expertise amassed over a span of 25 years in the field of building technology divisions, with a particular focus on capital markets.

Kriya is a distinguished figure in the realm of payments, e-money, and financial technology, having occupied key leadership roles at renowned organisations including Newcastle Card Solutions, The Payments Association, Gibraltar E-Money Association, and, most notably, as the CEO of Transact Payments Limited for a period of nine years.

Our Chairman, John Taylor, expressed his enthusiasm for Kriya joining the team: "We're absolutely thrilled to welcome Kriya to Tap. Our company is growing at an incredible pace, and having someone with Kriya's track record and expertise is a huge win for us. He's well-respected in the FinTech industry, both in Gibraltar and the UK, and his decision to join TGL speaks volumes about our potential. We're confident that Kriya's extensive experience will be invaluable to our growth."

Kriya shared his excitement about joining Tap: "I've had a close working relationship with Tap for the last four years and have always been incredibly impressed with the platform, the team, and the potential. I'm delighted to join the team and can't wait to lead the strategic growth of the operating company. Tap has shown impressive growth through various challenges in the wider crypto environment, and I believe we're in a unique position to capitalize on significant opportunities in European markets and beyond. Our focus on customer-driven products and maintaining a regulated, security-first approach will help ensure our continued success."

Kriya will be working closely with our Tap Board of Directors, including Group Chief Executive Officer, David Carr, to take our company to new heights.

We are looking forward to seeing the positive impact that Kriya's exceptional leadership will have on Tap Global Limited, and we are excited to share our progress with our community as we continue  to grow and innovate in the realm of cryptocurrency and blockchain technology.

Crypto wallets are a critical tool for anyone looking to use, store, and manage crypto assets. Crypto wallets come in various forms, with different features and security options that cater to the needs of different users. Finding the right crypto wallet is essential if you want to get the most out of your cryptocurrency investments. 

No matter what type of crypto wallet you choose, it’s important to do your research before making a decision since each one comes with its own set of advantages and disadvantages. It’s also important that you keep your private keys safe so no one else can access them, this will ensure that only you have control over your funds and crypto assets. 

What is a crypto wallet?

A crypto wallet is a digital wallet that stores manages and facilitates the use of various cryptocurrencies. In order to store and use crypto assets, one needs a digital wallet. Unlike traditional wallets that simply hold your cash or cards, crypto wallets facilitate transactions as well as store your funds. 

Each crypto wallet has a public and private key which are unique alphanumeric codes that grant the user access to the funds. Public keys are wallet addresses to which other users can send you cryptocurrencies, similar to your bank account number, while private keys are akin to a pin number and should not be shared with anyone. 

In essence, crypto wallets act as secure interfaces for users to access, store and transfer funds across different blockchain networks. In essence, it’s like a bank account for digital currencies. 

The different types of crypto wallets

Crypto wallets can be divided into two main categories: hot wallets and cold wallets. 

Internet connectivity is the defining factor between hot wallets and cold wallets. Hot wallets are connected to the internet, making them less secure but much more user-friendly. On the other hand, cold wallets are stored completely offline and do not require any internet connection. This provides a higher level of security, which makes them ideal for individuals who plan on storing their crypto assets long-term. 

Each of these categories can be further broken down into varying wallets. Under the hot wallets umbrella, there are desktop wallets, mobile wallets, and web wallets, while under the cold wallets umbrella, there are hardware and paper wallets. 

Hot wallets

As a hot wallet is easy to set up and constantly connected to the internet they are ideal for users looking to make daily or frequent transactions. Typically with hot wallets, funds are quickly accessible and they tend to be very straightforward to operate. Below we look at the three main types of hot wallets: desktop wallets, mobile wallets, and web wallets. 

Desktop wallet

A desktop wallet is a cryptocurrency storage solution that allows users to store, send, and receive crypto assets from their personal computers with the crypto wallet stored on the device’s hard drive. 

It is generally considered to be a secure way of managing crypto assets as it does not require the user to store their funds on an exchange, instead giving control over the private keys associated with the hot wallet to the user.

The downside however is that it may be vulnerable to computer viruses should someone gain access to your desktop. 

Mobile wallet

Mobile wallets are digital crypto wallets that allow users to manage their cryptocurrencies directly on their mobile devices. These crypto wallets are very convenient and secure compared to carrying large amounts of money around or keeping it in a traditional bank account.

Mobile wallets provide users instant access with more control over their funds and are particularly useful for quick payments that require a scan of a QR code. When downloading this type of hot wallet ensure that you use a link from the website directly to ensure that you are not falling for a fake wallet. This goes for all hot wallets and cold wallets listed here.

Mobile wallets are typically the best crypto wallets for users actively spending their crypto assets.

Web wallet

Web wallets are hosted by third-party services, which act as custodians for users' private keys. Web wallets provide an easy way to manage digital currencies, allowing users to quickly send and receive payments without having to download or install any software. 

Additionally, web wallets offer enhanced security features such as two-factor authentication and multi-signature transactions. With these features in place, web wallets can provide a secure environment for storing cryptocurrencies regardless of the user's level of technical expertise, an added bonus for hot wallets.

Cold wallets

Cold wallets are hack resistant and therefore are considered the best crypto wallets for hodlers. In order to facilitate trades, cold wallets need to connect to the internet in order to trade directly from their cold storage devices.

Hardware wallet

Hardware wallets store private keys on a physical device like a USB drive or an external hard drive. A common example of this is the Ledger Nano X, while secure it retails for roughly $150.

These crypto wallets provide maximum security but require more effort to set up and use compared to other types of crypto wallets. They typically are also more expensive as one needs to buy a physical device. 

Paper wallet

Finally, paper wallets are simply printed copies of public/private key pairs which allow you to securely store funds offline without having any digital device at all. While these are considered to be the best crypto wallets in terms of security, if the paper gets damaged then the funds are lost.

Finding the right crypto wallet for you

In order to find the right crypto wallet you will need to establish what specifically you wish to do with your funds. If you are looking to hold them long-term, cold wallets are by far the more secure solution, however, if you are making payments and using cryptocurrencies in your day-to-day life, a hot wallet or even a mobile wallet might be better suited to your needs. 

Many crypto users utilize a combination of two or three, using the more secure crypto wallet option to hold their funds long-term while also having a portion of funds in a preferred hot wallet allowing them quick and easy access to their funds when they need them. 

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Whether you’re starting your investment journey or looking to learn something new, in this article we’re breaking down the differences between an exchange-traded fund (ETF) and a mutual fund. 

When trying to decide which investment strategy is right for you, it can be difficult to choose between ETFs and mutual funds. Both have their advantages and disadvantages, so it pays to do your research before making a decision.

Exchange traded funds are baskets of securities that trade on exchanges like stocks. A mutual fund is a professionally managed investment portfolio that pools investors’ money together in order to purchase a variety of assets such as stocks, bonds, and real estate investments.

In this article, we will explore the differences between these two types of investments, including the costs associated with each option and how they may fit into your overall investing strategy. By understanding the similarities and differences between both options you can make an informed decision about which one is right for you.

The basics: ETF vs mutual fund

ETFs, as the name might imply, are funds that are traded on an exchange, a basket of investments like stocks or bonds. These can track a particular sector, index, commodity, or other assets, with the first ETF tracking the entire S&P 500, the SPDR S&P 500 ETF (SPY). By investing in the S&P 500 ETF, one is investing in all 500 stocks that make up that particular index. 

An actively managed mutual fund on the other hand is a pool of funds managed by a team of professionals and might include a mix of stocks, money market accounts, bonds, and other options. Unlike ETFs, these actively managed funds can only be traded once a day after the markets have closed as their prices are set once a day. 

ETFs and mutual funds: the similarities

While they differ in significant ways, these two investment instruments also have some similarities. 

1. Both mutual funds and ETFs are managed by professionals

Both ETFs and mutual funds are managed by professionals that are responsible for which investments go into the funds. The difference here is how they're managed. ETFs are passively managed funds while the latter is an actively managed fund. 

2. Both carry less risk than single stocks

Exchange-traded funds, much like a mutual fund, offer investors the ability to pool their resources and invest in a variety of businesses. Mutual funds and ETFs are inherently less risky than investing in single stocks due to the diversification they provide. However, these two forms of financial investments have distinct goals that set them apart (which we will discuss shortly).

3. Both offer a wide range of investment opportunities

Both mutual funds and ETFs offer a wide variety of options when it comes to investing. From a fund that reflects the stock market to one filled with a combination of stocks and bonds to one that follows a particular industry such as technology, there is more than likely to be an ETF or mutual fund out there covering just what you're looking for. 

ETFs and mutual funds: the differences

An important component of understanding these two instruments and determining which one is right for you is establishing the differences between the two. Below we take a look at the differences between a mutual fund and an ETF.

1. They function differently

While ETFs mimic the market producing returns based on the index they follow, a mutual fund is a collection of investments designed to outperform the market. Mutual funds are created by teams looking to build an attractive investment, while ETFs are more typically a collection of "like-minded" investments. 

2. They're managed differently

As touched on above, ETFs are passively managed while a mutual fund is actively managed. Let's break that down. ETFs simply follow the market index for which they're created, and can typically offer lower fees due to not needing a team of managers to select the investments. 

Mutual funds on the other hand are actively managed by professionals and designed to beat average market returns making them susceptible to higher fees (and higher returns). A mutual fund is the best solution for diversifying risk. 

3. They're bought differently

ETFs are traded on stock exchanges in the same way that stocks are, allowing investors immediate trading access during stock exchange hours. These instruments can be bought and sold for particular prices at particular times of the day. Some might say that ETFs are essentially mutual funds that can be traded like stocks. 

Mutual funds however can only be traded after market trading hours and have their price set once a day. To buy actively managed mutual funds, one will need to use a financial advisor, a broker or purchase directly from the fund itself. One might also be able to buy mutual funds from a mutual fund company directly. This instrument also allows for automatic monthly payments providing an easier solution to consistent investing. 

Which is right for you: ETFs vs mutual funds

While neither mutual funds nor ETFs is perfect, both ETFs and mutual funds are great options for investing. Mutual funds tend to be more highly recommended for retirement and other long-term saving goals while ETFs are almost always more tax efficient due to the nature in which they are traded. Which is the right instrument for you will be determined by your needs and preferences.

Best long-term investment option: mutual funds

To build a secure retirement nest egg, it is essential to make wise investments for the long run. Mutual funds are an ideal option as they provide great returns and stability over time, allowing you to leave them for 10, 15, or even 20 years. 

Best short-term investment option: ETFs

Investors are able to capitalize on ETFs just like stocks, actively trading them during the day in an attempt to realize short-term gains and make quick returns. While mutual funds are known to be more expensive options, ETFs tend not to be entirely fee-free either. It's important to note that these come with costs each time that you invest, incorporating operating costs, transaction costs, or could be in a fee-based account. 

Conclusion

ETFs are designed to mimic market indexes and have been shown to provide 10%-12% growth over longer periods of time.

Mutual funds on the other hand are designed to beat market averages, providing higher returns over the long run. Investors looking for a diversified long-term option are advised to look at these four growth stock mutual funds: growth, growth and income, aggressive growth, and international. Always look to mutual funds that have proven results in terms of long-term growth.

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