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Why ETFs are a good investment value – Fox Business

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Exchange-traded funds, or ETFs, can be a good way to diversify your portfolio and can be cost-effective.

“ETFs are generally less costly and easier to access for investors,” said Ben Johnson, Morningstar’s director of global exchange-traded fund research. “They offer investors access to a whole host of investment strategies, from total market indexes to actively managed portfolios of stocks linked to the metaverse, with low fees, superior tax efficiency, and often much smaller investment minimums—typically as low as the price of a single share.”

Here’s what industry experts have to say about how to make ETFs sound investment values.

Try to consider limit orders

Johnson notes it’s important to know and respect what the “ET” in ETF stands for. “ETFs trade like stocks, and investors should practice good hygiene when it comes to trading them to avoid running up a big trading cost bill,” he said.

ADVICE FOR THE FIRST-TIME ETF BUYER

Specifically, Johnson explained that investors should consider using limit orders when buying and selling ETFs.

“This will help to ensure that they get the price they ask for (if not better) and prevent them from transacting at a price they might not like,” he said.

Benefit from tax efficiencies

ETFs are fully transparent, said Tom Lydon, vice chairman with VettaFi.

“They frequently update their holdings, so investors know exactly what they are getting themselves into,” he said.

PICKING AN ETF: EXPERTS WEIGH IN

Also, Lydon explained that ETFs are more tax efficient than traditional open-end funds. Due to structural differences, said Lydon, ETFs do not incur a capital gains tax like how mutual funds would, but still come with a capital gains tax upon the sale of the ETF by an investor.

ETFs build on the ease of mutual funds

According to Lydon, ETFs may be seen as an improved version of their mutual fund cousins, providing the benefits of mutual funds and then some.

“Some of the key selling points of ETFs beyond traditional open-end funds may include things like lower expense ratios, flexible intraday trading, transparent nature and improved tax efficiency for taxable accounts,” Lydon said.

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Finally, unlike mutual funds that are bought and sold once per day after the market closes, ETFs trade all day long.

“If you are familiar with trading individual company stocks on a brokerage platform, then picking up an ETF should be a similar experience,” continued Lydon.

Furthermore, he said more knowledgeable investors may also utilize various trade orders for executing ETF trades, including limit orders and stop-limit orders, along with short selling, to better manage their investment experience.

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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