Good shout on the ETFs, but they in themselves have some pitfalls than a novice share trader should watch out for:
- ETFs may include exposure to stocks you already own. Thus further increasing the weight of your portfolio on that stock.
- Some ETFs may include exposure to stocks you want to avoid. Eg i stayed clear of L&G battery value chain because a % was in Tesla. Now I have been proven wrong but that’s my choice and it’s one to be mindful of.
- Some ETFs are not diversified at all. With exposure to certain sectors (perhaps intentionally like the battery value chain I mentioned above) or unintentionally - eg the FTSE 100 is heavily weighted toward banking.
Just be careful.