Terminology: Mortgage Backed Securities

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President Lyndon Johnson created mortgage-backed securities when he authorized the 1968 Charter Act. It also created Fannie Mae. He wanted to give banks the ability to sell off mortgages. That would free up funds to lend to more homeowners. (How Mortgage-Backed Securities Worked Until They Didn’t, KIMBERLY AMADEO Updated January 31, 2019) Mortgage Backed Securities…

Terminology: Exchange Traded Funds

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An ETF is a security that tracks an index, commodity or a basket of assets. Each ETF has a preselected collection of stocks or bonds. ETFs are less costly than purchasing mutual funds or even buying individual stocks. Each time you buy or sell an individual security you pay trading costs, while an ETF is…