More Deep Ways to Be a Better ETF Investor in 2015

For the past two weeks I’ve offered you suggestions on how to be a better ETF investor in 2015. This week, I want to elaborate on three more ways to be a better investor. Let’s take a closer look now.

1) Become passionate about ETFs. Knowing about ETFs isn’t a full-time job for most of us, but putting in a little time to really learn about these outstanding investment vehicles is well worth your effort. In fact, I think you need to cultivate a passion for this knowledge if you really want to succeed as an investor.

What this means is that you are engaged with your money and that you spend the appropriate amount of time making sure your investments are right for your goals. For example, going into 2015, you MUST review all of your accounts and all of your positions. Review your asset allocation, cash positions and the performance of your accounts. This must be done quarterly, at a minimum, but preferably it should be done monthly. Also, spend some time learning about the ETF landscape — and the easiest way to do that is to read this publication and listen to my weekly ETFU.com podcast.

2) Spread the word. Nothing is more powerful for achieving success than helping others. Now, I’m not talking about boasting about what a great investor you are. What I’m referring to is talking with your spouse, your friends, your children and your co-workers about their money and about ETFs.

Ask them if they are using ETFs. If they say no, ask them why not. Talk to them about ETFs just like you would if you got a great deal on something like a car or a home. Hey, when you share helpful knowledge, other helpful knowledge tends to come back to you. Another way to think of it is via a sports analogy. Most sports fans have a favorite team (mine is the Los Angeles Lakers), and I tend to promote the team whenever the conversation of basketball comes up. So, when the topic of money comes up, why not promote ETFs?

3) Look before you leap. There will always be stories about the best ETFs, the lowest-cost ETFs, actively managed ETFs, etc. I know we write about all of these issues in this publication. And while this is great information to know, before you buy any fund, you need to know a lot more than the headlines.

So, please don’t buy another ETF until you look at the following: fund objective, asset class, assets under management, expense ratio, volume and top holdings. Also, remember that repeat winners, especially sector specific winners, are rare. The bottom line here is you need to “look before you leap,” as you want to make sure you’re not jumping into either the unknown or the very little known.

Next week, we’ll take a final deeper look at the final four ways you can be a better ETF investor in 2015.