With the large financial institutions teetering on the edge of legality is investing
in bank ETFs a wise choice at this time? Whether or not Goldman Sachs and any other financial giant on Wall Street did anything wrong is not what matters to the American people. The fact that they made money in the recession and took a handout from the American tax payers to give themselves large bonuses will always be perceived as pure greed.
There was a time in America when local business men would consolidate their resources and open a community bank. These financial institutions were established to increase business in the local economy. This type of thinking is what made America great. Strengthen your community thru involvement in it.
These local banks do more than just hold and lend money; they are generally the leading investors in company stocks in their region. This involves the trading of stocks, bonds, currency and possible the leveraging of debt in the stock markets. They are not the high risk investors that the New York Brokerage firms have developed into, but the conservative ones.
The bank investments are the leading cause of keeping the economy running and effect the trading of business that relies on it. When looking at Bank ETFs know there are two distinct types, the local bank and the global bank.
The local banks ETFs will invest in the local community which helps generate more income for those doing business locally. The global bank ETFs rely on credit card transactions and the leveraging of debt in a global scale to earn their profits. Good examples of this type are CitiBank and Chase.
For low risk investing in Bank ETFs pick the regional bank ETFs and for higher risk chose the global bank ETFs. The different bank rates are determined by which level of risk you are comfortable with as an investor. Thus choosing a ETF depends upn your risk taking power and your preferences.
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