Pros and Cons of ETFs


We have entered a different age after the industrial revolution in the past century. Right now, as technology advances, our lives are drastically changing. This change also begs the question that we consider and reconsider our investment choices. As in every important decision in your life, where and how to invest your money requires that you pay full attention to it. The ETFS advises all its investors to focus on the leading megatrends, may it be in automation, AI, electric vehicles, robotics, mining, biotech, security or currency.

The investors need to have a belief that their investment choice is the right option by thoroughly studying the trends and then predicting the valuation.

Regardless of the financial product or service you choose, you should study its characteristics thoroughly, as well as advantages and disadvantages depending on the objective you have. The term deposit is the simplest investment instrument that exists in the local market. But like any other financial tool, its convenience will depend on your needs.

Investing is a necessity for a person or company if they want to achieve a significant economic gain in a relatively short time.

Investing your money is a useful tool to ensure better use of the money obtained through the work, inheritance or other legal means. However, this practice also has its advantages and disadvantages, as you could win, you could also lose by investing money, but first, you must understand what money investment is all about.

Why is it necessary to invest money?

Due to the great changes in labor matters, the sudden creation and disappearance of companies due to market dynamics, and many other reasons, it is very rare for an individual to spend his entire life working in a single company and retire to live from his pension. Dismissals in the public sector due to government budget cuts or in the private sector due to low profitability in projects cause people to continuously worry about how they can continue raising money for their pension, without also counting how to pay regular debts in their homes.

Where to invest money?

Due to the complexity of the global economic system, with public and private companies executing projects of all kinds in every imaginable area, there are many different types of investments in which you can put your money to multiply. For example, you can invest in goods and services that, due to their history, rarity, or technological peculiarity, are expected to increase in value as time passes.

Another form of investment is the purchase of a residential or commercial property, which, in addition to gaining value over time, can also give profits from rentals and other uses.

If you invest in shares of a company, you are acquiring security whose value is equivalent to one of the parts in which the company's capital has been divided. If you buy enough shares, you can even become part of its shareholder's meeting and increase the benefits you will receive for the company's profits at the end of a certain fiscal period.

How to invest money?

If you have an amount of money available and you don't want to limit yourself to having it saved in a bank, the best option is to invest it.

You should always research the markets, analyze the valuations, and make your own decisions about where to place your money. If you do not have time for this or do not consider yourself sufficiently skilled in the subject, you can leave this type of decision to intermediaries or investment agents. They are the professionals with experience in the field that in exchange for a commission is dedicated to investing the money from clients or groups of clients, seeking maximum profitability.

There are many investment opportunities when you entrust your money with ETFs. Investing in robotics, gold, mining materials, lithium, silver, and many more options gives you the advantage of having fast or slow returns depending on the investment option.

Pros of ETFs:

The investment in ETFs is like that of the shares. They can be bought and sold throughout the day since the price fluctuates at the same time. They are also negotiated using stop orders and limit orders.

1.     Less expensive

ETFs are less expensive, both in marketing and maintenance.

2.     Lower Taxes

ETFs have much lower annual taxes compared to investment funds.

3.     Diverse

ETFs are more diverse, allowing access to niche markets and other markets that had difficult access, such as currencies.

4.     Security

You can always recover the initial amount. If you are looking for savings only, it is the safest and most stable product of the products offered by banks.     

5.     Low-interest rates

Interest rates are low compared to other investment alternatives such as mutual funds, buying shares in the stock market, or investing in real estate.

6.     Fast

ETFs give you fast returns as the value of the shares change dynamically, and you can make your transaction whenever there is a positive fluctuation in the value of the shares.

7.     Flexible

Due to the dynamics of the investment options, the amount you invest, and the returns you get are flexible. The initial investment amount is not fixed in the industry, and you can invest as much or as little as the firm allows.

8.     Increased returns

The money you invest at the beginning will be multiplied at the end of the investment.

Disadvantages of investing

1.     Decreased Liquidity

The biggest disadvantage of investing is that there is always the risk of losing money if things do not go as expected. Besides, another immediate disadvantage is that when you invest, you immediately lose liquidity and maneuverability due to the lack of availability of your resources.

2.     Higher cost higher risk

Some ETFs may involve a higher cost and, above all, a higher risk. Quoted funds are not intended for new investors, and they may be subject to much volatility.

3.     Dynamic

Not all ETFs are the same. Some are quite difficult to understand, since they may have greater leverage, or be based on future trends. It is best to ask an expert.

4.     Rigidity

While the return is fast, you can't ask for money any day. Only on the date stipulated initially with the investment and financial security firm (whether fixed-term or renewable, can only be returned after the agreed period has ended).

In your analysis, at least you must take into account the amount you have available to invest, the time during which this money will be deposited with the investment firm, and the interest rate offered.


Study the trends thoroughly varying from product to companies and invest your money wisely. It is important to assess the value and condition of the option you choose to put your money in. Investing in the right market will give you the best return for your money.