A low-cost ETF (Exchange-Traded Fund) strategy involves investing in ETFs with low expense ratios, which can help reduce investment costs and potentially improve long-term returns. Here's are the pros & cons of this strategy:
Pros:
▲Cost savings: Low-cost ETFs can save investors money on fees, which can add up over time.
▲Increased diversification: ETFs offer diversification across various asset classes, sectors, and geographic regions.
▲Flexibility: ETFs can be traded throughout the day, allowing for quick portfolio adjustments.
▲Transparency: ETFs disclose holdings daily, providing investors with clear visibility.
Cons:
▼Limited control: Investors have limited control over the underlying holdings and portfolio composition.
▼Market risk: ETFs are subject to market fluctuations, which can impact returns.
▼Trading costs: While ETFs have low expense ratios, trading costs like commissions and bid-ask spreads can apply.
▼Over-diversification: Investors may end up with too many ETFs, leading to over-diversification and decreased returns.
Application:
▶Long-term investing: Low-cost ETFs are suitable for long-term investors who can ride out market fluctuations.
▶Core portfolio holdings: ETFs can form the core of a portfolio, providing broad diversification.
▶Tax-efficient investing: ETFs can be more tax-efficient than actively managed funds due to lower turnover rates.
Challenges:
▶Selecting the right ETFs: Investors must choose ETFs that align with their investment objectives and risk tolerance.
▶Monitoring and rebalancing: Regular portfolio monitoring and rebalancing are necessary to maintain target allocations.
▶Avoiding over-reliance on indexing: Investors should consider a mix of active and passive investments to avoid over-reliance on indexing.
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Freyr : ETFs lets me switch off my mind as I DCA in
Brianjh : ETF power
JJ_7201 : What is moofolio??
mr_cashcow OP Freyr : Yep DCA into low cost ETFs
mr_cashcow OP JJ_7201 : Moofolio can be access via moo tab→moreit is quite a useful feature as it ranks your moofolio returns too
mr_cashcow OP Brianjh : Thanks for your support as always
Brianjh mr_cashcow OP : Your no.1 fan
JJ_7201 : Is it this "more"??
mr_cashcow OP JJ_7201 : Here u go
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