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Personal finance observation, musing and decisions in a journey toward financial independence by 36 with at least $1 million.

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Principles for Smart ETF Investing





Morningstar's Sonya Morris declared six principles of effective ETF investing. It is probably a bit self-promotional for Morningstar's growing attention on ETF analysis, but overall they are really good tips for ETF investment beginners.

From Morningstar:

ETFs can be great tools to add to your financial toolbox. They're cheap, flexible, and tax-efficient. But to benefit from what they have to offer, you must use them intelligently.

To truly tap into all that ETFs have to offer, I think a successful investor must:

1. Adopt a Contrarian Point of View
2. Be Valuation Conscious
3. Pay Attention to the Fundamentals
4. Be Cheap
5. Understand an Index's Construction Methodology
6. Maintain a Long-Term Mind-Set

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