Finance
7 investing mistakes to avoid when buying ETFs
In the picture-perfect world, it is all about making magnificent profits. Charles D. Ellis, the investing luminary, compared investing to amateur tennis, as victory goes only to the player making the fewest mistakes. Victory is rarely in the hands of a player who tries to smash every point only to keep whacking the ball out of the court and into the net. Likewise, there are some ETF investing mistakes investors should avoid. 1. ETF Investment Strategy Not understanding the ETF investment strategy or its composition is one of the top ETF investing mistakes. Ideally, one must understand what’s underlying with the ETF. It can help one know if it caters to one’s objectives. On the contrary, knowing and understanding where one puts money is decisive. So, take time to analyze to what extent the return of the ETF matches the index it replicates and how regular the monitoring is. 2. Trying to overshadow the market We all wish to overturn the market. But sadly, nobody can do it consistently. Moreover, when one tries to outperform the market, it will only condemn one to substandard results. The active investors chop their returns by adding to the excessive fees. Thus, one must employ funds that track indexes, like ETFs.