7 ways you can profit from ETFs

7 ways you can profit from ETFs

What’s more, if you are not yet trading Jim Lowell’smarket-trouncing ETFs, you are missing out on all these advantages:

1.ETFs are a tax-advantaged investment: you are not tagged with capitalgains distributions when your fellow investors sell shares, because theunderlying stocks in the ETF are traded, not sold. You don’t pay taxesuntil you sell your shares.

2. Annual management fees and expenses are extremely modest compared tomost mutual funds. There are no 12-b-1 fees, sales loads, or exit charges. And no minimum investment required.

3.You can trade ETFs with stop-loss orders, sharply limiting yourdownside risk. To make sure you don’t pay more than you want forshares, you can use limit orders, just as you would for a stock.

4. You can purchase ETFs on margin, enabling you to leverage yourinvestment for huge gains.

5. There are hundreds of ETFs to choose from, enabling you to tradevirtually any index in the world, from the NASDAQ and the Malaysian stock market, to microcap and Chinese stocks.

6. ETFs can be sold short, even during a market rout, to profit fromfalling stocks. Unlike individual stocks, ETFs are exempt from the uptick rule.

7. Unlike mutual funds, which trade at end-of-day prices, ETFs can bebought and sold instantaneously on major stock exchanges all day long, giving you tighter control of your entry and exit prices.