Common ETF mistakes that are hurting your returns
Before I get into it, do I have permission to drag you? Lovingly, of course.
If you’ve been learning about investing, by now you probably know that ETFs are the way to go.
But after reviewing hundreds of portfolios, I’ve seen a lot of investors, even the so-called seasoned ones, make the same mistakes when building their ETF lineup. These mistakes lead to slower growth and sometimes even losses.
If your investment portfolio isn’t returning at least 12%, it definitely needs some tweaking.
Here are some of the mistakes you’re probably making:
Holding too many ETFs:
Unless your name is Vanguard, BMO or Blackrock, you my friend have no business holding more than 6 ETFs in your portfolio.
Holding more than one ETF with the same goal:
This is the most common mistake I see. For example, I often see investors holding multiple ETFs that track the U.S. market, such as VOO, VFV, VUN, VTI, and QQQ. These are all heavily weighted in U.S. large-cap stocks.
Or they hold SPY, IVV, SCHX, XUS, ZSP, and VFV, which all track the S&P 500.
If you have two or more ETFs from either group, you’re doing entirely too much.
Keep one and ditch the rest.
Holding the same ETF from multiple fund managers:
For example, XIC, ZCN, and VCN are the exact same ETF, just offered by different fund managers. Fund managers are the investment firms that package and sell ETFs. You can usually identify them by the first letter of the ticker.
Vanguard starts with V. BMO starts with Z. iShares by BlackRock starts with X
It’s like buying an iphone from Costco, BestBuy and Walmart. Same iphone, just different stores and there’s absolutely no reason to own three iphones…unless you’re doing yahoo yahoo… (IYKYK)
Pairing an asset allocation ETF with another ETF:
The entire point of an asset allocation ETF is to give you a ready-made, diversified portfolio. For example, if you’re holding VGRO or XEQT and adding VFV, it’s unnecessary. These types of ETFs are very well diversified with thousands of companies across different industries and countries, so you literally don’t need anything else.
Which of these mistakes are you currently making? Hit Reply and let me know, I promise, I won't judge.
I know choosing the right investments can feel overwhelming. That’s why I'm bringing back the How to Invest Your First $1,000 Masterclass on July 24th.
I’ll be teaching you exactly which ETFs to hold in your portfolio so your investment is always bulletproof and you never have to repeat these types of mistakes.
And if you show up live and stay until the end, I’ll audit your ETFs and tell you which ones are redundant.
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