Investment advisor discusses his love of ETFs
Even if you've been in the market for some time, you may still be searching for investments that allow you to achieve your goals. So, how do you find the right investment vehicle? This was the subject of a recent Seeking Alpha article penned by David Fabian, the COO of an investment advisory firm.
While Fabian noted that "there is not a perfect choice for everyone," saying that each investor will have their own comfort level with risk and reward, his "vehicles of choice" are exchange-traded funds (ETFs).
"ETFs are unique in that they offer you instant diversification, daily liquidity, complete transparency, tax efficiency, and most important, low fees," Fabian wrote in a piece published April 23.
This is because unlike stocks, which are often tied to one company, ETFs invest in many entities across entire countries or market sectors. So when this group of firms does well, even despite the individual losses of certain holdings, investors see a return. And with more than 1,200 ETFs and counting, investors can choose ETFs according to their goals.
For example, while emerging market ETFs may offer big potential rewards, those in more historically reliable market sectors may be right for conservative investors. Whether investing directly in stocks or using ETFs to gain diversification, once an investment choice has been made you have to monitor and manage the associated risk. Using SmartStops risk management tools, you can be alerted when the risk profile of your stock or ETF changes indicating defensive action may be warranted. SmartStops help you assess your risks whether, like Fabian, you fall in love with ETFs or opt for another investment vehicle that better meets your needs.
At SmartStops, we know that our customers rely on the algorithms that power our analytics engine to make investment decisions that help them manage their risk and limit losses. However, we understand that there's more at stake than just profits. Whether you use our Position Sizing Calculator to calculate the number of shares of an equity you want to purchase or you look to our education center for tips and strategies, you're seeking to ensure that you can provide for your family's essential needs or for your own necessities during retirement. To that end, managing the ever changing risk exposure represented by equity investments is essential.