Whether you are seeking a long-term investment for your retirement years somewhere decades off in your future, or a shorter-term investment strategy that has a potentially high yield over a shorter period of time, you want to know what your options are for 2017. Not all investment strategies are equal as some carry far greater risk than others, even though higher-risk investments tend to carry the potential for equally higher gains.
If you have money to invest, and are unsure how and where to invest it, there are a few strategies you might want to consider but perhaps you should primarily be looking at ETFs. Here’s why.
Political Factors at Play
At the moment, the financial world seems to be in a state of limbo because it is still unclear as to exactly what will happen during the administration of the newly elected Donald J. Trump. He has vowed to end NAFTA which was signed into being by former President Bill Clinton in 1994. Why should this impact your personal investment strategies for 2017? Consider for a moment that 2 of our largest 7 trade partners are Canada and Mexico. As the only other 2 countries in the NAFTA accord along with the United States, ending this free trade agreement could be devastating to all three nations combined, which could theoretically send stock prices plummeting.
Also at play would be what is happening in the UK and Brexit. The UK happens to be another of the largest trade partners of the US and so if their economy fails we are suddenly losing 3 of 7 large trade partners which will definitely impact our economy and our corporations that trade regularly between those three nations. This is one of the reasons why many financial advisors are recommending private (personal) investors look at ETFs, Exchange Traded Funds.
Why ETFs?
You are probably, at this point, asking exactly what are ETFs? If you are familiar with mutual funds, ETFs follow a similar trading style except mutual funds can only be traded once daily whereas an ETF manager can actively trade ETFs throughout the day as market movement suggest would be profitable. Both are managed by a fund manager and both buy into underlying stocks but ETFs have lesser exposure to capital gains taxes so that’s why many advisors suggest these are the ideal personal investment vehicle for 2017.
In other words, if your fund manager had to wait until the end of the day to buy or sell underlying fund assets, your fund could lose a significant amount if the market plunges. That would be the problem with a mutual fund. On the other hand, an astute actively managed ETF manager could see the beginning of movement and act accordingly. ETFs, similar to stocks, can be traded at any time the market is open for business and since you don’t need to really understand the market in the beginning, your manager will make trades as needed to ensure continual gain, in shorter durations, while mitigating losses that would incur if he/she didn’t have the ability to trade in real time. Looking for a good personal investment strategy in 2017? Start your search with ETFs. Chances are you’ll end your search here as well as you begin investing.