Let’s get the basic definitions out of the way first: SPY and VTI are both exchange-traded funds, or ETFs. These are index funds with shares that are traded on the stock market.

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What are Stocks? Stocks represent ownership. A share of stock is simply a share of ownership in a company. When you own a share of stock, you own a share of all the company’s future profits and liabilities. It’s a small claim on a company’s future profits.

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