Morningstar’s approach to exchange traded fund investing is to be long-term, cost conscious and safe.  Maybe too safe.  Although their advice is sage for textbook long-term investing, you wouldn’t buy sector or global ETFs if you’re following their advice.

In Morningstar’s latest ETF report, "Six Principles for Smart ETF Investing", Sonya Morris outlines the importance of buying value, being a contrarian, sticking with the fundamentals and not paying too much.

We’ve always believed that you should buy an ETF when it enters a new uptrend, not when everyone else is selling.  Also, sometimes you have to pay a little more for global and sector ETFs, but they are still much less expensive than their conventional mutual fund counterparts.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.