The only purpose of investing is to gain profit and nothing gets better than investing in exchange traded funds(etfs). I have been investing in etfs for quite sometime now with most of portfolio consisting of Nifty BeES followed closely by Gold BeES, which are the two major etfs in terms of volumes in India.
Here are the 3 major steps one needs to take into account while investing in an ETF.
Step 1: Look out for information – a simple task in an era where there is overload of data anyways.(some really good etf investment advice can be found at https://etfinvestmentadvice.com)
Step 2 – The most critical one and the most pertinent to ETFs – Understanding an investment option and judging our capability towards it. This is an area where there is a huge amount of “noise” by the way of half baked information, vested voices, herd mentality and a host of other factors seeking to condition our minds in a certain way. We must break free from the hypnotic glare of advertisements, media reports, talking heads and look at investment avenues with a calm, unruffled mind.
Step 3: Actual Investing.
ETFs, simply told offer a low cost, transparent, convenient and equitable way of indexing. Indexing stands the test of science. With Indexing one can look forward confidently to beating most active funds. Active fund managers that beat indices demonstrate no consistency and hence should not be looked as champions but merely as lottery winners.
Well there you have it. Invest in ETFs and you’ll never have to be worried about your ROI. Its an investors paradise.