ETFs, or exchange-traded funds, are popular among everyday investors, but many are still unsure about how they work and the risks involved. Noah Hamman, founder and CEO of AdvisorShares, explains that ETFs are pooled investment vehicles that offer low-cost, diversified access for investors of all income levels. Choosing between index and active ETFs depends on risk tolerance and experience level. While index ETFs track specific market indexes, active ETFs are managed to outperform the market. It’s crucial to understand the risks associated with ETFs and work with a financial advisor to determine the best fit for your investment goals.

Read more at Yahoo Finance: 4 Reasons This ‘Safe Investment’ Isn’t Always a Good Bet, According to an Expert