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I am put off by ETF performance thanks to my results last year. I had a SEP IRA for my business with $1,000 in it and a traditional IRA with $6,000. I bought a

I am put off by ETF performance thanks to my results last year. I had a SEP IRA for my business with $1,000 in it and a traditional IRA with $6,000. I bought a pharmaceutical ETF with the SEP IRA. After a year it lost about 5%. Meanwhile the trad IRA grew to $10,500 investing in companies I know.

pkd 7y ago
That's because you bought an industry-specific ETF. So any imbalance in that industry would noticeably affect your holdings in the short period. General advice is to buy diversified ETFs (like the S&P 500 as the OP said) and hold them for long periods of time. It's a very different strategy from buying and selling individual stocks over a short term.
astura 7y ago
That's a problem with the specific underlying securities you bought, not a problem with ETFs in general. The "classic" ETFs are for well-known indexes, like the S&P 500.