ZenPhrase.com | A Trending Content Hub

5 mistakes to avoid when investing in a high dividend ETF

Exchange-traded funds (ETF) have been gaining popularity in the investment sector for some time now. Along with mutual funds, they have been one of the most preferred investment options among investors. With investors having pumped in billions of dollars in ETFs by now, these funds sure seem like a lucrative investment avenue. However, financial experts suggest treading this path carefully so as to avoid unforeseeable losses. Here are a few mistakes that you can avoid while investing in high dividend ETFs:

Overlooking long-term investment
Looking at long-term goals is the golden rule when it comes to any type of investment. However, seasoned investors invest in ETFs on a short-term basis through a type of trading called intraday trade. This type of trading allows the investors to buy and sell stocks and other investments on the same day. However, if not thought out carefully, investing in high dividend ETFs through intraday trading can result in lower returns and higher trading costs.
Buying an ETF simply based on its name
This is one of the most common mistakes people make when investing in high dividend ETFs. Investors may think that an ETF’s name provides an insight into its investment reach, i.e., whether the ETF has local or/and global investors. However, this is a ploy that ETF issuers often use to lure investors. Investing in an ETF based solely on its name can lead to disastrous investments. So understand an ETF’s underlying holdings and market objectives before making an investment.
Investing in the wrong ETF
Like every investment, almost every ETF is vulnerable to market trends and economic slowdowns. However, this does not mean that the particular ETF has failed. When an ETF liquidates, you might still receive some money (termination and other fees might be levied). But this may take a while and you may lose out on the time that could have otherwise been utilized to make other investments. However, it is important to know when an ETF is failing so that you can liquidate your investment before it crashes. Some signs of a failing ETF are a short track record and low share liquidity, among others.
Not researching adequately
Not researching enough on how high dividend ETF funds can diversify your portfolio can result in redundancy or even losses. For example, you might be investing in an ETF and large-cap mutual fund of the same type of stock or even by the same company. It can also result in liquidity risk if you have invested in a specific sector. If you are not armed with enough information, then you might find it difficult to sell the ETF whenever you want.
Small ETF investments
The most sought-after investment strategy is putting aside a set amount for investing every month. This is referred to as the dollar cost strategy. However, putting an amount in only an ETF can be counterproductive if you are investing small. This is because you might have to pay commission on a few ETFs that you buy and sell. So make sure to set aside a dynamic amount when investing in ETFs. You can even turn to ETF issuers and online brokerage platforms that do not charge any commission on trading.

Popular Reads

4 extended vehicle warranties you should consider

When purchasing a vehicle, you are generally provided with the manufacturer’s vehicle warranty. The warranty stays valid on an average of 3 years or 36,000 miles, whichever comes first. However, after that, it is recommended to invest in an extended vehicle warranty to cover the repairs your vehicle may undergo over the coming years. While there are several extended vehicle warranties in the market, you need to choose the one that best suits your requirements. To help you narrow down your choices, here is a list of some of the most popular extended vehicle warranty services you can consider. Endurance Extended vehicle warranty from Endurance is accredited by the Vehicle Protection Association and Better Business Bureau (BBB) with an A+ rating. Endurance provides 24-hour roadside assistance, 24/7 claims processing, and allows you to choose from multiple dealerships and 350,000 certified mechanics in the country and Canada. Since Endurance is a direct provider, it directly pays the repair shop for any damages, making the claim process hassle-free. The extended vehicle warranty covers parts, labor, and tax. Extended vehicle warranty from Endurance ranges from $350 to $700 per year with a $100 deductible, depending on the mileage, year, make, and model of your vehicle.

The 2020 Jeep Grand Cherokee – Specs, features, and price

When it comes to off-roading capability and engine power, probably no other SUV can outstand the Jeep Grand Cherokee. The 2020 Jeep Grand Cherokee is more capable and refined than its predecessors and is available in a wide variety of trim levels. To help you stay informed the next time you are at a Jeep Grand Cherokee sale, here is a list of its specs and features, and where you can find Jeep Grand Cherokee for sale. Performance The Grand Cherokee Limited X, the new trim level to the 2019 model, is powered by a 3.6-liter V6 engine that produces a horsepower of 295 and torque of 260 lb-ft. This robust engine offers a comfortable and effortless ride. One of the most impressive features of this SUV is its towing capacity of up to 6,200 lbs. You can also go for the upper trim levels that are powered by the superior V8 engine. The supercharged 6.2-liter V8 engine in the Grand Cherokee Trackhawk generates 707 horsepower and 645 lb-ft of torque, which delivers a towing capacity of 7200 lbs. The Grand Cherokee has the slick eight-speed automatic transmission and is available in the four-wheel-drive configuration. Features, technology, and safety All Grand Cherokee models are equipped with the ProTech I package.

Here’s what you need to know before looking for tire coupons

Unlike other parts of your vehicles, your tires undergo rigorous wear and tear. Depending on the number of miles you drive and other factors, you need to replace them every few years for the safety and optimum performance of your vehicle. While this may cause a dent in your pocket, one of the best ways to shop for tires is using tires coupons. Many big tire brands such as Goodyear, Firestone, and Bridgestone among others, offer tires coupons and promo codes as part of their marketing or customer retention campaigns. You can easily find tires coupons for brands such as Firestone, Bridgestone, and Goodyear on various coupon websites. However, you need to ensure that these websites are authentic and also check the expiration date on these coupons. Moreover, considering the safety concerns related to tires, you should only opt for the best tires from reputable brands like Goodyear. To help you pick the right tire for your vehicle here is a quick read on the benefits of purchasing tires from Goodyear. To find the right Goodyear tire for your vehicle, use the Tire Finder tool on the Goodyear website. Using any of the following three options, you can find the right tires for your vehicle.