March 19, 2008 at 1:00 am by Tom Lydon
When the market appear unstable and gloomy investors need to look at protective measures such as exchange traded funds (ETFs).
Do not abandon your reasons for being in the stock market in the first place, advises the Rutland Herald.
Many investors are turning to ETFs because of their major advantages:
- They dodge the high management fees that mutual funds charge. The risk of single stock picking and owing are also at a minimum.
- They’re are traded throughout the day like a stock, so if you want to sell or buy, you can get the price in real time.
- They have a low turnover, making capital gains taxes low. The only time taxes are incurred is if you sell.
- They’re are transparent so you know what you are buying and what the price of every stock is that you own within the basket.
Remember to stick with the tried and true, high trading volume and well-known ETFs that track broad indexes. This way you cannot lose more than the market and volatility will be lower.
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