If you ever want to invest in ETFs, pls make sure you don’t make this mistake that I am going to explain in the next 30 seconds with an example.

    Let’s say you invest 1 lac rs in an ETF and after 3 years, the NAV has gone up giving you 1.5 lacs, so you are happy to make a profit of 50,000 rs.

    Now you want to sell this ETF but there are not enough buyers in the market and hence you might end up selling this for 1,45,000 losing out 5,000.

    This is called the problem of liquidity.

    So it’s very imp you check the liquidity meaning avg volume being exchanged on a daily basis.

    For maximizing your returns, you can follow me on insta as well as on Youtube, you will find the link in my bio.

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    You ever want to invest in ETFs please make sure you don’t make this mistake that I’m going to explain to you in the next 30 seconds with an example let us say you invest 1 lakh rupees in an ETF and after three years the nav has gone

    Up giving you 1.5 lakh rupees so happy days you have made a profit of 50 000 rupees now you want to sell this ETF in the market but there are not enough buyers in the market therefore you might be forced to sell this for let’s say one

    Lakh 45 000 rupees losing out roughly 5000 rupees in the trade what caused this issue less number of buyers in the market this is called the problem of liquidity so it’s very important you check the liquidity of the ETF meaning the average daily volume being exchanged on a daily basis for maximizing your

    Returns you can follow me on insta or on YouTube the link you will find in my bio

    9 Comments

    1. Index Mutual Funds are much better than ETFs because they DON'T have such liquidity issue. Also Mutual Funds are cost effective as brokerage , STT , DP charge and other government charges DON'T apply on mutual fund investments. Therefore Index funds are always better if compared to ETFs.

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