If you are wondering how much ETFs make you are asking yourself the wrong question or, give me a few minutes to explain it better, you are starting with an incorrect question.
In this article, we will try to clarify the ideas on ETFs for a moment and try to understand what gains we can actually aim for by investing with these tools.
Because we talk about ETFs
If you are here it is likely that you are starting to find out about this category of financial instruments. Without too many words, on My Business you will find a lot of material by consulting the following resources:
Return on ETFs
Let’s come to our initial question and try to understand why it is wrongly posed.
The reason is very simple: the correct answer is IT DEPENDS.
When we talk about ETFs we refer to a category, not to a single instrument: there are thousands of freely purchasable ETFs in the world, it would be like trying to answer the question ” how much do shares return?”.
To try to have clearer ideas, we must start from this premise: ETFs allow the investor to access different markets (equity or bond), different sectors (tech, auto, financial, etc.), or geographical areas (Europe, United States, Asia, China, etc.).
As for the possibilities of obtaining returns, therefore, we must follow the usual basic rules for investing:
Greater returns come in the face of greater risks.
There is no other way and, for this reason, rather than asking ourselves about returns we must ask ourselves what our investment strategy is and how we intend to proceed.
Only after defining the strategy, in the light of our objectives, does the performance of the individual instruments come.
This is what I teach here on My Business, so if you are at this stage read on 😉
How to build an ETF portfolio?
The portfolio must reflect our objectives, the strategy we want to adopt, and above all, our risk profile framed over a well-defined time horizon.
To do all this, I recommend that you consult the following resources:
- Guide to Building an ETF Portfolio;
- Best ETFs to Bet On: Asset List;
- My Method to Invest: Example of Individual Financial Planning.
There are “simplified” solutions
If you don’t want to build your wallet yourself, there are several solutions that allow you to save time and, above all, avoid a whole series of mistakes.
Business Me with its Study Center has developed “Fast Investments Planner” which is designed to do all this.
If the prospect of saving time and having an efficient strategy appeals to you, I suggest you take a look at the review.
Before asking ourselves about the performance of ETFs, we must first understand if and how they can be useful for our investment strategy.
There is no “standard return” or “minimum guaranteed return” because we are talking about a wide and varied category of very different instruments.