When considering your exchange traded fund (ETF) investments and your portfolio, this time you can’t blame the dog for eating your homework. The latest ETFs require that you research and follow up on your investments because some of the products are narrowly focused or niche products. This should be the normal course of action for any investment you plan to put into your portfolio. Tim Paradis for The Washington Post explains many types of ETFs can take investors where they want to go – into sectors or market areas that were previously unobtainable. However, it’s up to the investor to know what they are comfortable with and recognize which ETF will work for them.
In retrospect, 155 ETFs have been launched this year alone, compared to 159 for 2006. ETFs have perks like intra-day trading, low expenses and tax efficiency, so it is clear why the industry has grown. Some of the smaller players have added some narrowly focused ETFs to fill a niche that hasn’t been covered. This can make it more important to do your homework and understand what you are buying.
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.