Are You Letting Money Slip Through Your Fingers? Wise Moves to Make the Most of Your ETFs
ETFs can be great wealth-building tools. However, you may not be making the most of the opportunity.
Overview
If you're using an exchange-traded fund (ETF) to build wealth, you may be among the many who leave value on the table in how you select, trade, and use your ETF. Here, we'll cover a few strategic adjustments to help you gain more diversification, efficiency, and long-term growth from the ETFs already in your portfolio. If you want to make the most of your ETF, consider making the following moves.
It's easy to treat an ETF as an interchangeable index product. However, depending on the ETF, it may track anything from broad markets to narrow sectors -- two very different investments. Before buying, take time to review the underlying index, including its top holdings, sector mix, and risk rating. Be sure it aligns with both your goals and your risk tolerance. Ignoring seemingly minor details can leave you overexposed to a single industry and fail to provide the types of investments your portfolio needs for diversification.
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Originally published at www.fool.com.