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How to Get Started with ETFs

Include ETFs in Your Portfolio


As with any investment, it is important to understand the product you are using in your portfolio. So before you decide to include ETFs in your investment strategm, you should understand the basics about Exchange Traded Funds. A good place to get started is to read the artcle, What is an ETF.

Once you understand the basic concept of an exchange traded fund, then you can read on to find out what you need to do in order to get started trading ETFs.

1. Know the Benefits and Risks of ETFs

Once you have an understanding about ETFs, you can learn how they work to your advantage. Understanding the benefits of ETFs will help you utilize the correct investment strategy when including exchange traded funds in your portfolio.

It is equally important to understand the disadvantages of ETFs. Before you buy or sell any investment product you need to know all the limitations of the asset. You don't want to have any misconceptions about an investment’s performance and you need to understand all the risks involved. Here are some good articles to help you understand the pros and cons of ETFs

  • Nine Reasons ETFs Can Benefit Your Portfolio
  • Five Reasons an ETF May Not Be Right for You
  • 5 Reasons to Consider ETFs instead of Mutual Funds
  • 2. Learn About the Different Types of ETFs

    There is no shortage of selection when it comes to ETFs. There are multiple Exchange Traded Funds for indexes, sectors, styles, and regions. It can be a little overwhelming, but if you have a better understanding of the major types of ETFs, it will help you narrow down which kind of funds will fit your investing strategy. Here are some articles on about the major types of ETFs

  • 11 Types of ETFs (And More)
  • Market ETFs for Beginners
  • Industry ETFs, Perfect for Following Sectors
  • Advantages and Disadvantages of Foreign ETFs
  • Style ETFs, the ETFs with Style
  • Learn the Basics About Commodity ETFs
  • 3. Decide On the Best ETF Investing Strategy

    Are you investing in ETFs to gain exposure to a market sector? Are you using ETFs as a hedge against foreign risk? Do you want to trade ETF derivatives against your positions? Before you add ETFs to your portfolio, you need to decide why you are investing in the funds. Only then can you decide which ETF trading strategy is the best fit for your portfolio. Here are some different articles about ETF investing strategies to help you get started

  • Seven ETF Investing Strategies
  • Four Basic ETF Option Trading Strategies
  • Trading ETF Option Straddles
  • Six Questions to Ask About Inverse ETFs
  • 4. Understand How ETFs will Affect your Tax Return

    One of the major benefits of ETFs is the tax advantage it holds over other investment vehicles, especially mutual funds. Due to the nature of ETFs, capital gains taxes are not realized the same way they are with other investment products. However, that does not hold true in all countries, so it is important to be in synch with local tax laws. For more information about ETF taxes, read these articles

  • ETF Tax Advantages over Mutual Funds
  • Paying Taxes on ETF Dividends
  • 5. Consider a Few More Things Before you Invest in ETFs

    Proper research is essential for any investment, but especially with ETFs. Even if you have a handle on ETF benefits, risks, types, investing strategies, and taxes, there are still some other factors to consider. For more information on these factors, read this article

    Five Things to Consider Before Buying an ETF

    6. Set up a Brokerage Account

    If after due diligence and lots of research you feel you are ready to add ETFs to your investment portfolio, it’s as easy as calling your broker. Or opening an online brokerage account will work just as well. If you are interested in learning more about brokers and brokerage accounts, these articles may help.

  • What is a Brokerage Account?
  • Choosing a Broker
  • Before You Open a Brokerage Account
  • And if your having trouble picking a broker, here are some reviews by ConsumerSearch that may help. Online Broker Reviews

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    2. Money
    3. Exchange Traded Funds
    4. Buying ETFs
    5. Getting Started With ETFs (Exchange Traded Funds)

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