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Are You Making These 3 ETF Mistakes That Cost You 50% in Gains?
Yahoo Financeยท2025-10-13 08:45

Core Insights - The Nasdaq-100 ETF is heavily concentrated, with approximately 60% of its assets in technology stocks and around 50% in its top 10 holdings, indicating a lack of diversification [1] - The Invesco QQQ Trust, which tracks the Nasdaq-100 index, exemplifies that not all ETFs are low-risk investments, as some can be quite aggressive [2] - The YieldMax Bitcoin Option Income Strategy ETF has a high expense ratio of 0.99%, raising concerns about cost versus benefit for investors [3] - The SPDR S&P 500 ETF has an expense ratio of 0.09%, while the Vanguard S&P 500 ETF has a lower expense ratio of 0.03%, highlighting the importance of cost in ETF selection [4] - The Roundhill Meme Stock ETF has been reintroduced, focusing on stocks driven by retail sentiment, which poses significant risks due to their volatility [8][9] Investment Considerations - Long-term investing requires a strategic approach rather than impulsive decisions, emphasizing the need for careful consideration before purchasing ETFs [6] - Diversification is crucial when building a portfolio, as relying solely on ETFs can create a false sense of security regarding diversification [10] - Investors should actively seek to include a variety of ETFs, such as those that provide exposure to international stocks, to enhance overall portfolio diversification [11][12] - Ignoring portfolio-level diversification can lead to owning similar ETFs, which may result in significant losses if those ETFs decline simultaneously [13] - While ETFs simplify investing, understanding their mechanics is essential to avoid overpaying and investing in high-risk assets [14]