The Benefits of Purchasing ETFs to Protect Against a Market Plunge
From the Desk of Jim Eccleston at Eccleston Law LLC:
Market corrections have typically occurred at least once a decade. This is significant because although we have had a bull market for several years now, this trend will likely not last much longer.
In preparation for a market downturn, many advisors are recommending exchange-traded funds (ETFs), designed to rise when the stock market falls, and vice versa.
There are many different categories of ETFs, each of which provides different benefits. For example, the industry has launched 32 dividend-focused ETFs in the past two years. Dividend-focused ETFs are appealing to investors because the dividends are a natural buffer against losses.
In addition, low-volatility funds, market defense bonds, and multifactor funds are popular among investors because you have a higher chance to recover your losses faster than with other types of investment funds.
It is imperative that financial advisors keep their clients apprised of their different options when it comes to investing in ETFs in order to mitigate the risks associated with a market downturn.
The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities Fraud, Compliance Protection, Breach of Fiduciary Duty, FINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.
Related Attorneys: James J. Eccleston
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