“The fees investors are paying can easily erode a third to half of their account over time,” Mitch Tuchman, CEO of MarketRiders, said in the article.
Diversification is also an important aspect in managing an investment portfolio as it helps lower risks. Instead of putting all your eggs in one basket, it is important to spread your money around.
Lastly, institutional investors follow through with an investment plan and rebalance allocations whenever their portfolio diverges from the target. This way an investor keeps emotions out of the equation and invests on a predetermined strategy.
“Why do people begin investing without an investment plan? They need to identify their goals and risk tolerance and write up an asset allocation plan and establish what their minimum and maximum targets are for each asset class,” Swedroe added.
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.